Question

**7. Present and future value tables of $1 at
3% are presented below:**

N FV $1 PV $1 FVA $1 PVA $1 FVAD $1 PVAD $1

1 1.030000 0.97087 1.0000 0.97087 1.0300 1.00000

2 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087

3 1.09273 0.91514 3.0909 2.82861 3.1836 2.91347

4 1.12551 0.88849 4.1836 3.71710 4.3091 3.82861

5 1.15927 0.86261 5.3091 4.57971 5.4684 4.71710

6 1.19405 0.83748 6.4684 5.41719 6.6625 5.57971

7 1.22987 0.81309 7.6625 6.23028 7.8923 6.41719

8 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028

9 1.30477 0.76642 10.1591 7.78611 10.4639 8.01969

10 1.34392 0.74409 11.4639 8.53020 11.8078 8.78611

11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020

12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262

13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400

14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496

15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607

16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794

Donald wants to invest money in a 6% CD account that compounds semiannually. Donald would like the account to have a balance of $100,000 four years from now. How much must Donald deposit to accomplish his goal?

A. $22,510

B. $88,849

C. $78,941

D. $25,336

**8. On May 1, Rat Race Co. agreed to sell the
assets of its Footwear Division to Mikes Inc. for $80 million. The
sale was completed on December 31, 2015. The following additional
facts pertain to the transaction:**

The Footwear Division qualifies as a component of the entity according to GAAP regarding discontinued operations.

The book value of Footwear's assets totaled $48 million on the date of the sale.

Footwear's operating income was a pretax loss of $10 million in 2015.

Rat Race's income tax rate is 40%.

In the 2015 income statement for Rat Race Co., it would report income from discontinued operations of

A. $9.2 million.

B. $26 million.

C. $22 million.

D. $13.2 million.

**9. Loan C has the same principal amount,
payment amount, and maturity date as Loan D. However, Loan C is
structured as an annuity due, while Loan D is structured as an
ordinary annuity. Loan C's interest rate is**

A. the same as Loan D.

B. less than Loan D.

C. higher than Loan D.

D. indeterminate compared to Loan D.

**10. On May 1, Rat Race Co. agreed to sell
the assets of its Footwear Division to Mike's Inc. for $80 million.
The sale was completed on December 31, 2015. The following
additional facts pertain to the transaction:**

**The Footwear Division qualifies as a component of the
entity according to GAAP regarding discontinued
operations.**

The book value of Footwear's assets totaled $48 million on the date of the sale.

Footwear's operating income was a pretax loss of $10 million in 2015.

Rat Race's income tax rate is 40%.

Suppose that the Footwear Division's assets had not been sold by December 31, 2015, but were considered held for sale. Assume that the fair value of these assets at December 31 was $80 million. In the 2015 income statement for Rat Race Co., under discontinued operations it would report a

A. $10 million loss

B. $13.2 million income

C. $6 million loss

D. 16% gain.

**11. To determine the future value factor for an annuity
due for period n when given tables only for an ordinary
annuity,**

A. obtain the FVA factor for n + 1 and deduct 1.

B. obtain the FVA factor for n and deduct 1.

C. obtain the FVA factor for n + 1 and add 1.

D. obtain the FVA factor for n – 1 and add 1

**12. Sadie is planning on a cruise for her
30th birthday. She wants to know how much she should set aside at
the beginning of each month at 6% interest to accumulate the sum of
$4,800 in five years. She should use a table for the**

A. future value of an ordinary annuity of $1.

B. future value of an annuity due of $1.

C. present value of an annuity due of $1.

D. future value of $1.

**13. Safari Inc. offers a new employee a lump sum signing
bonus at the date of employment. Alternatively, the employee can
take $8,000 at the date of employment plus $20,000 at the end of
each of his first three years of service. Assuming the employee's
time value of money is 10% annually, what lump sum at employment
date would make him indifferent between the two
options?**

A. $23,026

B. $62,711

C. $57,737

D. $8,000

Answer #1

7.

C

Working note:

Effective annual interest rate R = (1+6%/2)^2 -1 = 6.09%

Deposit required = P

Then,

100000 = P*(1+6.09%)^4

P = 100000/1.0609^4

P = $78940.92 or $78941

8.

D

Working note:

Gross income = (80-48) – 10 = $22 Million

Tax rate = 40%

So, income after tax = 22*(1-40%) = $13.2 Million

9.

C.

Interest rate of loan C will be higher than that of loan D.

12.

B

Since the deposit takes place in the beginning of the month on a monthly basis to accumulate the sum in the future, then future value of annuity due table will help.

Pl. repost other unanswered questions for their proper answers!

On May 1, Foxtrot Co. agreed to sell the assets of its Footwear
Division to Albanese Inc. for $80 million. The sale was completed
on December 31, 2016.
The following additional facts pertain to the transaction:
• The Footwear Division qualifies as a component of the entity
according to GAAP regarding discontinued operations.
• The book value of Footwear's assets totaled $48 million on the
date of the sale.
• Footwear's operating income was a pre-tax loss of $10 million...

Present and future value tables of $1 at 3% are presented
below:
N
FV $1
PV $1
FVA $1
PVA $1
FVAD $1
PVAD $1
1
1.03000
0.97087
1.0000
0.97087
1.0300
1.00000
2
1.06090
0.94260
2.0300
1.91347
2.0909
1.97087
3
1.09273
0.91514
3.0909
2.82861
3.1836
2.91347
4
1.12551
0.88849
4.1836
3.71710
4.3091
3.82861
5
1.15927
0.86261
5.3091
4.57971
5.4684
4.71710
6
1.19405
0.83748
6.4684
5.41719
6.6625
5.57971
7
1.22987
0.81309
7.6625
6.23028
7.8923
6.41719
8
1.26677
0.78941
8.8923
7.01969
9.1591...

***PLEASE ANSWER ALL QUESTIONS**
3. On October 28, 2021, a company committed to a plan to sell a
division that qualified as a component of the entity according to
GAAP regarding discontinued operations and was properly classified
as held for sale on December 31, 2021, the end of the company's
fiscal year. The division's loss from operations for 2021 was
$2,000,000.
The division's book value and fair value less cost to sell on
December 31 were $3,000,000 and $2,500,000, respectively....

***PLEASE ANSWER ALL QUESTIONS**
3. On October 28, 2021, a company committed to a plan to
sell a division that qualified as a component of the entity
according to GAAP regarding discontinued operations and was
properly classified as held for sale on December 31, 2021, the end
of the company's fiscal year. The division's loss from operations
for 2021 was $2,000,000.
The division's book value and fair value less cost to
sell on December 31 were $3,000,000 and $2,500,000, respectively....

On October 1, 2017 LeBron Co. agreed to sell the assets of its
Heat Division to Cavalier Inc. for $80 million. The sale was
completed on December 31, 2017. The following additional facts
pertain to the transaction:
The Heat Division qualifies as a component of the entity
according to GAAP regarding discontinued operations.
The book value of Heat's assets totaled $74 million on the date
of the sale.
Heat's operating income was a pre-tax loss of $3.5 million in
2017....

Present and future
value tables of $1 at 3% are presented below:
Micro Brewery borrows
$240,000 to be repaid in equal installments over a period of seven
years. The loan payments are semiannual with the first payment due
in six months, and interest is at 6%. What is the amount of each
payment?
--------------------------------------------------------------------------------------------------------
Present and future
value tables of $1 at 3% are presented below:
N
FV
$1
PV
$1
FVA
$1
PVA
$1
FVAD
$1
PVAD
$1
1...

Present and future value tables of $1 at 9% are presented
below.
PV of $1
FV of $1
PVA of $1
FVAD of
$1
FVA of $1
1
0.91743
1.09000
0.91743
1.0900
1.0000
2
0.84168
1.18810
1.75911
2.2781
2.0900
3
0.77218
1.29503
2.53129
3.5731
3.2781
4
0.70843
1.41158
3.23972
4.9847
4.5731
5
0.64993
1.53862
3.88965
6.5233
5.9847
6
0.59627
1.67710
4.48592
8.2004
7.5233
Mustard's Inc. sold the rights to use one of its patented processes
that will result...

Each of the following situations is independent. (Future Value
of $1, Present Value of $1, Future Value Annuity of $1, Present
Value Annuity of $1) (Use appropriate
factor(s) from the tables provided.)
Case
Present Value
Annuity
Future Value
Annual Interest Rate
Number of Years
A
$105,000
−
(i)
3%
6
B
(ii)
−
$105,000
4%
5
C
(iii)
$2,100
−
2%
10
D
−
$3,100
(iv)
3%
20
Required:
Compute the missing amounts for (i) through (iv). (Round
your answers...

Each of the following situations is independent. (Future Value
of $1, Present Value of $1, Future Value Annuity of $1, Present
Value Annuity of $1) (Use appropriate factor(s) from the tables
provided.)
Case
Present Value
Annuity
Future Value
Annual Interest Rate
Number of Years
A
$190,000
−
(i)
5%
7
B
(ii)
−
$190,000
6%
6
C
(iii)
$3,800
−
4%
10
D
−
$4,800
(iv)
5%
20
Required:
Compute the missing amounts for (i) through (iv). (Round
your answers...

Determine the present value of the following single amounts (FV
of $1, PV of $1, FVA of $1, PVA of $1,FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables provided. Invested
Amount i = n = Future Value 1. $15,500 5% 12 2. $23,000 5% 6 3.
$35,000 11% 18 4. $56,000 6% 14

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