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Call premium

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Problem 16-19 Call premium [LO3]The Sunbelt Corporation has $49 million of bonds outstanding that were issued at a coupon rate of 12.675 percent seven years ago. Interest rates have fallen to 11.80 percent. Mr. Heath, the Vice-President of Finance, does not expect rates to fall any further. The bonds have 18 years left to maturity, and Mr. Heath would like to refund the bonds with a new issue of equal amount also having 18 years to maturity. The Sunbelt Corporation has a tax rate of 36 percent. The underwriting cost on the old issue was 3.8 percent of the total bond value. The underwriting cost on the new issue will be 1.7 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with a call premium of 8 percent starting in the sixth year and scheduled to decline by one-half percent each year thereafter (consider the bond to be seven years old for purposes of computing the premium). Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Assume the discount rate is equal to the aftertax cost of new debt rounded up to the nearest whole percent (e.g. 4.06 percent should be rounded up to 5 percent).  a.Compute the discount rate. (Do not round intermediate calculations. Input your answer as a percent rounded up to the nearest whole percent.)    Discount rate %    b.Calculate the present value of total outflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)    PV of total outflows$     c.Calculate the present value of total inflows. (Do not round intermediate calculations and round your answer to 2 decimal places.)    PV of total inflows$     d.Calculate the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)    Net present value$   
 e.Should the Sunbelt Corporation refund the old issue?   YesNo

 
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Company X sells on a 1/15, net 60, basis

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Company X sells on a 1/15, net 60, basis. Customer Y buys goods with an invoice of $1,500.

a.How much can company Y deduct from the bill if it pays on day 15?
  Discount$   
b.How many extra days of credit can company Y receive if it passes up the cash discount?
  Number of days days  
c.What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
  Effective annual rate %
 
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Organizational Theory in Human Resources

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Hi I am writing a literature review on Organizational Theory in Human Resources , and it of course is due today. I

have an annotated bibliography, is it like that or is there a good example of one out there I can use.

 
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firm

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Harry’s Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank

loan to do this. Mr. Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecasted sales figures:

Actual Forecast Additional Information
  November$ 250,000 January$ 380,000 April forecast$ 390,000  
  December320,000 February420,000   
   March400,000   
Of the firm’s sales, 50 percent are for cash and the remaining 50 percent are on credit. Of credit sales, 35 percent are paid in the month after sale and 65 percent are paid in the second month after the sale. Materials cost 30 percent of sales and are purchased and received each month in an amount sufficient to cover the following month’s expected sales. Materials are paid for in the month after they are received. Labor expense is 40 percent of sales and is paid for in the month of sales. Selling and administrative expense is 10 percent of sales and is also paid in the month of sales. Overhead expense is $30,500 in cash per month.
     Depreciation expense is $10,500 per month. Taxes of $8,500 will be paid in January, and dividends of $4,500 will be paid in March. Cash at the beginning of January is $90,000, and the minimum desired cash balance is $78,000.
a.Prepare a schedule of monthly cash receipts for January, February, and March.
Harry’s Carryout Stores
Cash Receipts Schedule
 NovemberDecemberJanuaryFebruaryMarch
  Sales$  $  $  $  $  
  Credit sales     
  Collections:     
     Cash sales  $  $  $  
     One month after sale    
     Two months after sale    
   
  Total cash receipts  $  $  $  
   
b.Prepare a schedule of  monthly cash payments for January, February, and March.
Harry’s Carryout Stores
Cash Payments Schedule
 JanuaryFebruaryMarch
  Payments for purchases$  $  $  
  Labor expense   
  Selling and administrative   
  Overhead   
  Taxes   
  Dividends   
 
  Total cash payments$  $  $  
 
c.Prepare a monthly cash budget with borrowings and repayments for January, February, and March.(Leave no cells blank – be certain to enter “0” wherever required. Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0.)
Harry’s Carryout StoresCash Budget
 DecemberJanuaryFebruaryMarch
  Total cash receipts $  $  $  
  Total cash payments    
  
  Net cash flow $  $  $  
  Beginning cash balance    
  
  Cumulative cash balance $  $  $  
  Monthly loan (repayment)    
  
  Ending cash balance $  $  $  
  
  Cumulative loan balance$  $  $  $  
 
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