Exercise 22-14 Danner Company expects to have a cash balance of $51,750 on January 1, 2020. Relevant monthly budget data for the first 2 months of 2020 are as follows. Collections from customers: January $97,750, February $172,500. Payments for direct materials: January $57,500, February $86,250. Direct labor: January $34,500, February $51,750. Wages are paid in the month they are incurred. Manufacturing overhead: January $24,150, February $28,750. These costs include depreciation of $1,725 per month. All other overhead costs are paid as incurred. Selling and administrative expenses: January $17,250, February $23,000. These costs are exclusive of depreciation. They are paid as incurred. Sales of marketable securities in January are expected to realize $13,800 in cash. Danner Company has a line of credit at a local bank that enables it to borrow up to $28,750. The company wants to maintain a minimum monthly cash balance of $23,000. Prepare a cash budget for January and February.

How can a poor housing market put home buyers in a financially unstable position? a. changing property values means it’s easier to find homes with low rental costs. b. when the home value decreases, property taxes and insurance costs increase. c. houses are valued lower than their purchase prices, so the home equity decreases. d. home buyers lose all tax benefits and tax incentives when the housing market goes down. e. mortgage payments can increase even though the home value decreases.

Afirm's before-tax cost of debt, rd, is the interest rate that the firm must pay on debt. because interest is tax deductible, the relevant cost of debt used to calculate a firm's wacc is the cost of debt, rd (1 – t). the cost of debt is used in calculating the wacc because we are interested in maximizing the value of the firm's stock, and the stock price depends on cash flows. it is important to emphasize that the cost of debt is the interest rate on debt, not debt because our primary concern with the cost of capital is its use in capital budgeting decisions. the rate at which the firm has borrowed in the past is because we need to know the cost of capital. for these reasons, the on outstanding debt (which reflects current market conditions) is a better measure of the cost of debt than the . the on the company's -term debt is generally used to calculate the cost of debt because more often than not, the capital is being raised to fund -term projects. quantitative problem: 5 years ago, barton industries issued 25-year noncallable, semiannual bonds with a $1,600 face value and a 8% coupon, semiannual payment ($64 payment every 6 months). the bonds currently sell for $845.87. if the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? round your answer to 2 decimal places. do not round intermediate calcu

Selected transactions of the carolina company are listed below. classify each transaction as either an operating activity, an investing activity, a financing activity, or a noncash activity. 1. common stock is sold for cash above par value. 2. bonds payable are issued for cash at a discount