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Assignment Exercise 20–1: Financial Statement Capital Structures
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Find three different financial statements that have varying capital structures. Write a paragraph about each that explains the debt-equity relationship and that computes the percentage of debt and the percentage of equity represented.
Also note whether the percentage of annual interest on debt is revealed in the notes to the financial statements. If so, do you believe the interest rate is fair and equitable? Why
Assignment Exercise 21–1: Cost of Owning and Cost of Leasing
Using the appropriate table from the Chapter 12 Appendices, record the present-value factor at 10% for each year and compute the present-value cost of owning and the present value of leasing. Which alternative is more desirable at this interest rate?
Assignment Exercise 21–2
Summarize the costs to the practice of owning a system (per Doctor Smith) versus leasing (per Doctor Brown). Include a computation of comparative present value. (Refer to Assignment 21-1 for setting up a comparative present-value table.)
Cost of Owning: Per Dr. Smith at $35,000 with average maintenance of $4500 (4,000 + 5,000)/2 — Comparative Present Value
Assignment Exercise 21–3
How much more information should Rob have before he begins to make any calculations? Make a list. Which alternative do you believe would be best? Give your reasons.
