Exam 3: Measurement

Raleigh Inc. is considering leasing a piece of equipment with a fair value of $108,000 for three years. The current market interest rate for financing the equipment is 5% compounded semi-annually. Calculate the semi-annual lease payment assuming that the payment is made at the beginning of the period (round to the nearest dollar).

Billow Company has issued a 3% bond that is payable in 5 years and has a face value of $100,000. The risk-adjusted market rate is 4%. Calculate the fair value of the bond.

Use the following data to solve the following questions: -Branson Company deposited $5,800 in an account paying 2.5% annual interest. How much compound interest would Branson earn in 3 years?

Raleigh Inc. is considering leasing a piece of equipment with a fair value of $108,000 for three years. The current market interest rate for financing the equipment is 5% compounded semi-annually. Calculate the semi-annual lease payment assuming that the payment is made at the end of the period (round to the nearest dollar).

Assume that Picnic Paper Co. has several minor lawsuits outstanding. To determine the amount of liability to recognize on the statement of financial position, Picnic decides to use expected cash flow techniques. Based on discussions with their lawyers, Picnic has developed the following cash flow estimates, and related probabilities: Year Cash Flow Estimate Probability Acsearment 30\% \ 4,500 45\% \ 8,200 25\% 2021 \ 3,200 \ 5,400 \ 7,100 20\% 50\% 30\% Instructions Based on these estimates, and assuming a risk-free rate of 5%, what is the present value of expected cash flows that Picnic should record on their statement of financial position for 2020?

Your client, Bench Company, has a few minor lawsuits outstanding. Your main contact, Michael Wood, has heard that, though their amount is unknown, these lawsuits must be recorded on the financial statements. Explain briefly for Mr. Wood, the cash flow approach you would take to determining the amount to record on Bench Company's financial statements.

Helvetica Corporation is interested in leasing a piece of machinery that has a fair value of $150,000. The market rate for financing is 8% and Helvetica plans to lease the machinery for the next five years. Calculate the quarterly lease payments.

Branson Company deposited $5,800 in an account paying 2.5% annual interest. How much interest-on-interest would Branson earn in 3 years?

Inputs to income models include which of the following?

Which of the following is an example of an item that would be measured under the hybrid measurement categorization?

Which of the following is an example of an item that would be measured under the current value measurement categorization?