PLEASE USE THE TABLES TO SOLVE THE TIME VALUE PROBLEMS
Please show your work.
1. 4 pts.
LUBU, Inc. is investigating the purchase of a clothing loom for use in
LUBU will deposit $25,500 in an account that pays 8% interest,
What amount will be in the account 4 years from today?
Your client, Smarta, will receive a trust payment of $1,600,000 in 10
However, the client needs cash today, and applies for a loan, for which the
trust payment will be used as collateral.
If the proper discount rate is 6% per year,
compounded semiannually, what is the present value of the $1,600,000?
e. None of the above
3. 10 pts. Bard, Inc. has income of $6,392,500 from continuing operations at 12/31/2007
(and before an extraordinary loss of $590,625).
On January 1, 2007, there are
1,075,000 shares of common stock (C/S) outstanding.
425,000 new shares of C/S are
issued on September 30, 2007.
Bard also has outstanding (all year) 100,000 shares of
5%, $50 par P/S.
What is the weighted average number of shares outstanding for Bard for the year?
What is Bard's earnings per share (EPS) for the year (please show the breakdown
between continuing operations and the extraordinary loss)?