1. you are appointed secretary of the treasury of a recently independent country called rugaria. the currency of rugaria is the lav. the new nation began fiscal operations this year and the budget situation is that the government will spend 10 million lavs and taxes will be 9 million lavs. the 1-million-lav difference will be borrowed from the public by selling 10 year government bonds paying 5 percent interest. the interest on the outstanding bonds must be added to spending each year, and we assume that additional taxes are raised to cover that interest. assuming that the budget stays the same except for the interest on the debt for 10 years, what will be the accumulated debt? what will size of the budget be after 10 years?

Selected transactions of the carolina company are listed below. classify each transaction as either an operating activity, an investing activity, a financing activity, or a noncash activity. 1. common stock is sold for cash above par value. 2. bonds payable are issued for cash at a discount

The common stock and debt of northern sludge are valued at $65 million and $35 million, respectively. investors currently require a return of 15.9% on the common stock and a return of 7.8% on the debt. if northern sludge issues an additional $14 million of common stock and uses this money to retire debt, what happens to the expected return on the stock? assume that the change in capital structure does not affect the interest rate on northern’s debt and that there are no taxes.

Haley photocopying purchases a paper from an out-of-state vendor. average weekly demand for paper is 150 cartons per week for which haley pays $15 per carton. in bound shipments from the vendor average 1000 cartoons with an average lead time of 3 weeks. haley operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. the vendor has recently announced that they will be building a faculty near haley photocopying that will reduce lead time to one week. further, they will be able to reduce shipments to 200 cartons. haley believes that they will be able to reduce safety stock to a 1-week supply. what impact will these changes make to haley’s average inventory level and its average aggregated inventory value?