Questions On Lucy's Balanceet Under Generally Accepted Accounting Principles

b. What would be the value of each bond if they had annual coupon payments?

3. Was cash flow from operations greater than or less than net income? Explain in detail the major reasons for the difference between these two figures.

11. Investors and creditors are particularly interested in this financial statement because it tells them what is happening to the company’s most important resource?

a) Assuming the opportunity interest rate is 6%, what is the present value of the second alternative?

B. The present value of an annuity is unaffected by the number of the annuity payments.

a) In the first set of calculations, the staff used a discount rate of 20%, a five-year time horizon, and ignored taxes and terminal value. What is the relative attractiveness of these three alternatives?

b. If you inherited $100,000 today and invested all of it in a security that paid an 8% rate of return, how much would you have in 15 years?

b. What is the present value of this annuity if the opportunity cost rate is 10% annually? 10% compounded semiannually?

b) What is the relationship between net income on the income statement and the equity section on a balance sheet?

Other things held constant, which of the following actions would increase the amount of cash on a company's balance sheet?

f) To evaluate the material misstatement in the accounts, I think both of the consolidated income statement and the three financial statements are useful. We need to use the information properly from all the financial statements. However the consolidated income statement is the most useful one. If there is a significant change in an account balance comparing with preceding two years, the auditor will examine whether there a material misstatement exists. For instance, the bad debt expense as a percent of net sales in 2011, 2010 and 2009 are 0.56%, 0.70% and 0.69%, respectively. There should

c. Determine the firm’s EPS at the above debt levels. If EPS goes up with the higher debt level,

"a. If each project's cost of capital is 12%, which project should be selected? If the cost of capital is 18%, what

7. Which of the following must be true if a firm is experiencing economies of scale?

Assessing the likelihood of each option and assigning weight to each possibility is an inexact science, but I believe it in unlikely that in the current political climate we will not see both a reduction in the tax rate and an increase in the length of time over which we are required to depreciate capital assets. I have assigned weights to each option with this in mind, and have come up with an average weighted estimate of the net present value of the investment of: $1.7 million.