Problem 15-10 The term structure for zero-coupon bonds is currently: Maturity (Years) YTM (%) 1 4.1 % 2 5.1 3 6.1 Next year at this time, you expect it to be: Maturity (Years) YTM (%) 1 5.1 % 2 6.1 3 7.1 a. What do you expect the rate of return to be over the coming year on a 3-year zero-coupon bond? (Round your answer to 1 decimal place.) b-1. Under the expectations theory, what yields to maturity does the market expect to observe on 1- and 2-year zeros at the end of the year? (Round your answers to 2 decimal places.) b-2. Is the market's expectation of the return on the 3-year bond greater or less than yours? Greater Less rev: 09_14_2018_QC_CS-134332

Lo.2, 3, 9 lori, who is single, purchased 5-years class property for $200,00 and 7-years class property for $420,000 on may 20, 2018. lori experts the taxable income derived form the business (without regard to the amount expensed under ⧠179) to be about $550,000. lori has determined that she should elect immediate ⧠179 expensing in the amount of $520,000, but she doesn’t know which asset she should completely expense under ⧠179. she does not claim any available additional first-year depreciation. a. determine lori’s total cost recovery deduction if the ⧠179 expense is first taken with respect to the 5-year class asset. b. determine lori’s total cost recovery deduction if the ⧠179 expense is first taken with respect to the 7-year class asset. c. what is your advice for lori? d. assume that lori is in the 24% marginal tax bracket and that she uses ⧠179 on the 7-year asset. determine the present value of the tax savings from the depreciation deductions for both assets. see appendix g for present value factors, and assume a 6% discount rate. e. assume the same facts as in part (d), except that lori decides not to use ⧠179 on either asset. determine the present value of the tax savings under this choice. in addition, determine which option lori should choose. f. present your solution to parts (d) and (e) of the problem in a spreadsheet using appropriate microsoft excel formulas. e-mail your spreadsheet to your instructor with a two-paragraph summary of your findings.

Why entrepreneurs start businesses. a) monopolistic competition b) perfect competition c) sole proprietorship d) profit motive

Which of the following statements is correct? stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. potential conflicts between stockholders and bondholders are increased if a firm's bonds are convertible into its common stock. takeovers are most likely to be attempted if the target firm’s stock price is above its intrinsic value. one advantage of operating a business as a corporation is that stockholders can deduct their pro rata share of the taxes the firm pays, thereby eliminating the double taxation investors would face in a partnership.