Cool Runnings Corp. plans to construct a building after 5 years. The Chief Financial Officer suggested that the company should appropriate retained earnings and set aside cash to prepare the needed funds for the building. It was estimated that they will most likely spend ₱40 Million. How much cash should be invested today if a time deposit will pay 6% annually? (Provide solution/ explanation) a. ₱28,198,422 b. ₱29,848,616 c. ₱29,890,327 d. ₱31,341,047

Cool Runnings Corp. plans to construct a building after 5 years. The Chief Financial Officer suggested that the company should appropriate retained earnings and set aside cash to prepare the needed funds for the building. It was estimated that they will most likely spend ₱40 Million. How much cash should be invested today if a time deposit will pay 6% annually? (Provide solution/ explanation) a. ₱28,198,422 b. ₱29,848,616 c. ₱29,890,327 d. ₱31,341,047

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.21MCE

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Cool Runnings Corp. plans to construct a building after 5 years. The Chief Financial Officer suggested that the company should appropriate retained earnings and set aside cash to prepare the needed funds for the building. It was estimated that they will most likely spend ₱40 Million. How much cash should be invested today if a time deposit will pay 6% annually? (Provide solution/ explanation)
A telemarketing company bought a new office space for Php720,000 downpayment and monthly installment of Php40,000 at the end of each month for 42 months. What is the cash equivalent of the property if money is worth 12% compounded monthly? Group of answer choices Php2,281,250.57 Php2,086,324.33 Php2,523,200.50 Php2,190,844.67
A broadband service company borrowed $2 million for new equipment and repaid the principal ofthe loan plus $275,000 interest after 1 year. Whatwas the interest rate on the loan? A design-build engineering firm completed apipeline project wherein the company realized aprofit of $2.3 million in one year. If the amount ofmoney the company invested was $6 million, whatwas the rate of return on the investment?
Acme Bricks, a masonry products company, wants to have Php 600 000 on hand before it invests in new conveyors, trucks, and other equipment. If the company sets aside Php 80 000 per year in an account that increases in value at a rate of 15 % per year, how many years will it be before Acme can purchase the equipment? A. 3.2 years B. 4.6 years C. 6.3 years D. 5.4 years
A company is allocating $10 million to develop a new product. This money will be spent continuously for a period of 3 years (it is assumed that product sales will cover expenses in this process). If this money is deposited into an account that consistently earns interest at annual rates of (a) 12%, (b)10.75%, how much money can be withdrawn at most for the duration of the 3-year period? Answer: (a) $3 969 256 per year; (b) $3 899 674 per year
A company spends $20 million dollar for an office building. Over what period should the cost be written off? Choose the answer: A) When the $20 million ia expended in cash B) All in the first year C) Over the useful life of the building D) After $20 million in revenue is recognized
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In order to build a new warehouse facility, the regional distributor for Valco Multi-position Valves borrowed $1.6 million at 10% per year interest. If the company repaid the loan in a lump sum amount after two years, what was (a) the amount of the payment, and (b) the amount of interest?
Bank Al Ain Islami provides a financing facility based on the Murabaha principle to Seif Construction to purchase specialized Equipment to be used for their construction project. The amount of financing is $15,000,000 at a constant rate of return of 10% for a period of 5 years. Due to some cash flow problems, Seif Construction paid the final installment in Year 6. Required: i. ii. Present a statement showing the amount of Net Receivable, Unearned Murabaha Income, and Murabaha Income for the whole duration of the contract.Prepare journal entries for Bank Al Ain Islami for the above transactions (YO-Y6).
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A new office building was constructed 8 years ago by a consulting engineering firm. At that time the firm obtained the bank loan or P5,000,000 with 10% interest rate, compounded quarterly. The terms of the loan called for equal quarterly payments for 10-year period with the right of prepayment any time without penalty. Due to internal changes in the firm, it is now proposed to refinance the loan through an insurance company. The new loan is planned for a 20-year term with an interest of 20% compounded quarterly. The insurance company has a one-time service charge of 5% of its balance. This new loan also calls for equal quarterly payments.a. What is the balance due on the original mortgage (principal) if all payments have been made through a full 8 years? b. What will be the difference between the equal quarterly payments in the existing arrangement and the revised proposal?