Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Intercorporate investments:
DI has a 25% interest in a gold mine in the Yukon. They have held this investment for eighteen
months. During this time it has not made any money or discovered any gold. It was purchased as a long term investment by DI. This is especially frustrating to Dwight since he is unable to influence any of the decisions made by the mining company. The initial investment of 15 million dollars remains on the books unchanged. The company is still hoping for a major discovery, but regardless of that possibility, Dwight has made the decision to sell within one year. He is hoping that this potential discovery will increase the market value up from its present estimate of 9 million dollars.DI also owns 30 % of a hotel chain. The chain is modest, with three hotels across Ontario--but it has been profitable. The investment is carried by DI using the equity method--owing to the fact that Dwight sits on the Board. The carrying value of the investments is 4.5 million dollars, effective July/09, the last fiscal year end of DI. The hotel chain has a fiscal year end of December 31. In June of this year a major lawsuit was launched against the hotel chain. It is alleged that they were serving "mad cow" meat to the customers. Right now the suit is small; however, there is a major possibility of a class action suit. This could be as high as 15 million dollars. It is not known whether the chain is responsible. It is known that hundreds of its guests over the past six months did end up in the hospital. They have 2 million in liability insurance. They intend to fight this lawsuit--however, legal fees may also be in the millions. Further, they will have to undergo a major promotional campaign to offset the negative publicity surrounding this tragic event. DI has advanced 2 million dollars and has committed to another 2 million by December if needed. The initial 2 million was set up as a long term receivable by DI. Finally, in December of this past year DI purchased a 40% interest in a nearby amusement park called Crystal Lake. The amusement park was going through a restructuring and Dwight saw this as an opportunity to make some quick cash. It was his intent to hold the investment for less than one year. In fact his plan was to sell in early July/10--right at the peak of busy season. Unfortunately, the Company did not increase in value. Actually, DI's initial investment of 5 million was now worth half of that. Therefore, Dwight decided not to realize this loss. That is, he decided to make this a long term investment. Dwight was hoping that this loss was temporary and that by next year at this time it will have recovered and made a tidy profit.
why is research important in the feild of finance
Question What is the standard deviation of a portfolio which is comprised of $4,500 invested in stock S and $3,000 in stock T?
What is the relationship between the arithmetic average and the geometric average return for each stock and the S&P 500? Explain. Compare the standard deviations for each of the
Question : A proprietary life company issues only non-profit guaranteed growth bonds. The company invests only in equities with an expected return of 10% p.a, the risk free rat
Adding a Riskless Cash Fund: Assume now that a riskless cash fund P0 is also available to invest in. The risk free rate is 0.05 for both lending & borrowing. Obtain Pythagoras's ne
Gujistan charges foreign companies corporation tax at a preferential tax rate of 15 percent for the first five years, rather than the normal rate of 35 percent. PASE plc currently
You decide to max-out your annual investment into your Individual Retirement Account and invest $6,000 at the end of each year for the next 17 years. At the end of this investment
How can economies of scale be a characteristics that makes for a good industry (please be specific) and what industry (besides automobiles) do you consider to be a "good industry"
An entity's working capital financing policy is to finance working capital using short-termfinancing to fund all the fluctuating current assets as well as some of the permanent par
Differences in working capital for different industries Manufacturing Retail Service Inventories Hig
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd