305sampexam1f07newlu - PLEASE USE THE TABLES TO SOLVE THE...

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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 its business. LUBU will deposit $25,500 in an account that pays 8% interest, compounded quarterly. What amount will be in the account 4 years from today? 2. 4 pts. Your client, Smarta, will receive a trust payment of $1,600,000 in 10 years. 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? a. $1,600.000 b. $ 886,400 c. $ 892,800 d. $ 881,600 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. Required: a) What is the weighted average number of shares outstanding for Bard for the year? b) What is Bard's earnings per share (EPS) for the year (please show the breakdown between continuing operations and the extraordinary loss)? 1
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Please use the following information for problems 4 – 7. (13 pts total) Financial statements for Dizzone Company are presented below: Dizzone Company Balance Sheet @ December 31, 2007 Assets $ 450,000 Accounts payable $ 75,000 Accounts receivable (net of allowance of $5,000) 95,000 Bond payable (6%) 600,000 Merchandise Inventory 85,000 Investments 510,000 Buildings and Equipment (net of Accum Depreciation) 800,000 Common stock 450,000 Other Assets 180,000 Retained earnings 995,000 $2,120,000 $2,120,000 An audit of Dizzone revealed the following facts ( please show your work for this problem ): a) Cash includes both a savings ($300,000) and a checking account ($150,000; combined
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This note was uploaded on 10/17/2011 for the course ECON 101 taught by Professor Thompson during the Spring '11 term at Michigan State University.

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305sampexam1f07newlu - PLEASE USE THE TABLES TO SOLVE THE...

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