Time Value of Money ScenarioTesla is evaluating three invest…
Time Value of Money ScenarioTesla is evaluating three investment options to improve liquidity:Option A: Receive $100,000 in 5 years (interest rate: 8%, compounded annually)Option B: Receive $20,000 annually for 5 years (interest rate: 8%, compounded annually)Option C: Receive $50,000 now and $60,000 in 5 years (same interest rate) a. Compute the present value of each option. b. Which option has the highest present value? c. Beyond numerical value, what strategic and financial considerations should Tesla evaluate before making a final decision?
Read DetailsStock Transactions Intel Corporation issued 50,000 shares of…
Stock Transactions Intel Corporation issued 50,000 shares of $1 par common stock at $30 per share. Later in the year, the company repurchased 10,000 of those shares at $35 each. a. Prepare the journal entries for both the issuance and repurchase of the stock. b. How do these transactions affect the company’s equity accounts? c. Explain a financial reason a company might repurchase its stock.
Read DetailsLeases Delta Airlines signs a finance lease for new aircraft…
Leases Delta Airlines signs a finance lease for new aircraft valued at $120 million. The lease requires equal annual payments for 10 years, with the first payment due at year-end. The interest rate is 6%. a. Explain how Delta should initially record the lease under current accounting standards. b. Why might a company prefer a finance lease instead of purchasing the asset outright? c. Identify and explain how Delta’s first year of lease activity would impact both the income statement (specific expenses) and balance sheet (assets and liabilities).
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