Concept explainers
The wonderful widget company future.
a. Based on the accumulated debt at the end of 2013, calculate the 2014 interest payment. Assume an interest rate of 8.2%
b. Calculate the total outlays for 2014, the year-end surplus or deficit, and the year-end accumulated debt.
c. Based on the accumulated debt at the end of 2014, calculate the 2015 interest payment, again assuming an interest rate 8.2%
d. Assume that in 2015, the Widget Company has receipts of $1,100,000, holds operating costs and employee benefits to their 2014 levels and spends no money on security. Calculate the total outlays for 2015, the year-end surplus or deficits, and the year-end accumulated debt.
e. Imagine that you are the CFO of the Wonderful Widget Company at the end of 2015. Write a tree-paragraph statement to shareholders about the company’s future prospects.
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