The Robinson Corporation has $43 million of bonds outstanding that were issued at a coupon rate of 12.550 percent seven years ago. Interest rates have fallen to 11.750 percent. Mr. Brooks, the Vice-President of Finance, does not expect rates to fall any further. The bonds have 17 years left to maturity, and Mr. Brooks would like to refund the bonds with a new issue of equal amount also having 17 years to maturity. The Robinson Corporation has a tax rate of 30 percent. The underwriting cost on the old issue was 4.30 percent of the total bond value. The underwriting cost on the new issue will be 2.60 percent of the total bond value. The original bond indenture contained a five-year protection against a call, with a call premium of 6 percent starting in the sixth year and scheduled to decline by one-half percent each year thereafter. (Consider the bond to be seven years old for purposes of computing the premium.) Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. Assume the discount rate is equal to the aftertax cost of new debt rounded up to the nearest whole percent (e.g. 4.06 percent should be rounded up to 5 percent)

SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 4,000 of these meals using 960 direct labor-hours. The company paid its direct labor workers a total of $19,200 for this work, or $20.00 per hour.

According to the standard cost card for this meal, it should require 0.25 direct labor-hours at a cost of $19.75 per hour.

Required:

1. What is the standard labor-hours allowed (SH) to prepare 4,000 meals?

2. What is the standard labor cost allowed (SH × SR) to prepare 4,000 meals?

3. What is the labor spending variance?

4. What is the labor rate variance and the labor efficiency variance?

(For requirements 3 and 4, indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Do no round intermediate calculations.)

Gold Mining, Inc. is using the profitability index (PI) when evaluating projects. Gold Mining’s cost of capital is 5.40 percent. What is the PI of a project if the initial costs are $1,449,850 and the project life is estimated as 10 years? The project will produce the same after-tax cash inflows of $634,623 per year at the end of the year.

Round the answer to two decimal places.

On Monday morning, your buy one CME British Pound futures contract (i.e., you buy BP) containing BP 62,500 at a price of $1.4118.  Suppose the broker requires an initial margin of $1,925 and a maintenance margin of $1,750.  The settlement prices for Monday through Friday are $1.4108, $1.4118, $1.4085, $1.4076, and $1.4072, respectively.   Assume that you begin with an initial balance of $2,000 (not $1,925).  Fill out the following tables.  Make sure you show your calculation. (To get exact answers, show 4 digits after the decimal point.  If your calculation can’t show 4 digits after the decimal point, use excel spread sheet for the calculation) (9 points)

INPUT DATA: KEY OUTPUT: Amount needed by the firm: $170,000 Issue amount ($): $200,000 Flotation costs (in decimal form): 10.00% # of shares: 8,000 Other issuing expenses: $10,000 Stock price per share: $25.00 Underwriting fees $20,000 Other expenses $10,000 Total issuing costs $30,000 Amt of usable funds $170,000

Diction Publishing estimates that it needs $500,000 to support its expected growth. The underwriting fees charged by the investment banking firm for which you work are 6.5% for such issue sizes. In addition, it is estimated that Diction will incur $4,900 in other expenses related to the IPO. c. Suppose that Diction’s investment banker charges 8.2% rather than 6.5%. Assuming that all other information given earlier is the same, how many shares must Diction issue in this situation to net the company the $500,000 it needs? d. Suppose everything is the same as originally presented, except Diction will incur $5,835 in other expenses rather than $4,900. In this situation, how many shares must Diction issue to net the company the $500,000 it needs?

Elixir Corporation has just filed for bankruptcy. Elixir is a holding company whose assets consist of real estate worth $240 million and 100% of the equity of its two operating subsidiaries. It is financed partly by equity and partly by an issue of $560 million of senior collateral trust bonds that are just about to mature. Subsidiary A has issued directly $480 million of debentures and $31 million of preferred stock. Subsidiary B has issued $260 million of senior debentures and $140 million of subordinated debentures. A’s assets have a market value of $580 million and B’s have a value of $316 million. How much will each security holder receive if the assets are sold and distributed strictly according to precedence?

Payoff: (I can't seem to figure out the correct amount for the trust bond)

a. Debenture = 480 million

b. Senior debenture = 260 million

c. Subordinated debenture = 56 millio

d. Trust bond= ?

e. Preferred stock = 31 million

For the last 7 years, Joseph has made deposits of ​$150.00 at the end of every year earning interest at 6 % compounded annually. If he leaves the accumulated balance for another 8 years at 5 % compounded semi dash annually comma what will the balance be in the​ account?

The balance will be $________.

Filer Manufacturing has 7 million shares of common stock outstanding. The current share price is $73, and the book value per share is $8. Filer Manufacturing also has two bond issues outstanding. The first bond issue has a face value of $75 million, has a 8 percent coupon, and sells for 98 percent of par. The second issue has a face value of $55 million, has a 9 percent coupon, and sells for 107 percent of par. The first issue matures in 23 years, the second in 7 years.

The most recent dividend was $4.5 and the dividend growth rate is 8 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 30 percent.

Required: What is the company's WACC? (Do not round your intermediate calculations.)

A 12.79%

B 8.19%

C 7.69%

D 15.88%

E 7.94%

Please show work

A forklift will last for only 4 more years. It costs $6,100 a year to maintain. For $16,000 you can buy a new lift that can last for 9 years and should require maintenance costs of only $3,100 a year. a-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 6% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) a-2. Should you replace the forklift? b-1. Calculate the equivalent cost of owning and operating the forklift if the discount rate is 14% per year. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b-2. Should you replace the forklift?

A firm has total assets of $370,000, long-term debt of $140,000, stockholders' equity of $160,000, and current liabilities of $70,000. The dividend payout ratio is 30 percent and the profit margin is 8 percent. Assume all assets and current liabilities change spontaneously with sales and the firm is currently operating at full capacity. What is the external financing need if the current sales of $500,000 are projected to increase by 15 percent?

Jones Company is a U.S. firm preparing its financial plan for the upcoming year. It has no foreign subsidiaries, but the majority of its sales are from exports to Australia, Canada, Argentina and Taiwan. Estimated foreign cash inflows to be received from exports and foreign cash outflows to be paid for imports over the next year are shown below: Currency Total Inflow Total Outflow Australia dollars (A$) A$33,000,000 A$3,000,000 Canada dollars (C$) C$6,000,000 C$2,000,000 Argentina pesos (AP) AP12,000,000 AP11,000,000 Taiwan dollars (T$) T$5,000,000 T$9,000,000 Today’s spot rates and one-year forward rates in US$ are as follows: Currency Spot Rate One-Year Forward Rate A$ $ .91 $ .94 C$ .61 .60 AP .19 .16 T$ .66 .65 2. The current spot rate is used by Jones as a forecast of the future spot rate one year from now. The C$, AP, and T$ are expected to move in tandem with the U.S. dollar during the upcoming year. The A$’s movements are expected to be independent of the movements of the other currencies. As exchange rate movements are difficult to predict, the estimated net dollar cash flows per currency may differ from the estimates. Could the exchange rate movements from whatever exchange rate movements do occur offset each other? Explain. Be specific.

Quad Enterprises is considering a new 3-year expansion project that requires an initial fixed asset investment of $1.836 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $142,800. The project requires an initial investment in net working capital of $204,000. The project is estimated to generate $1,632,000 in annual sales, with costs of $652,800.

The tax rate is 21 percent and the required return on the project is 11 percent.

What is the project's Year 0 net cash flow? What is the project's Year 1 net cash flow? What is the project's Year 2 net cash flow?

What is the project's Year 3 net cash flow? What is the NPV?

You want to buy a $255,000 home. You plan to pay 15% as a down payment, and take out a 30 year loan for the rest.

a) How much is the loan amount going to be? $

b) What will your monthly payments be if the interest rate is 5%? $

c) What will your monthly payments be if the interest rate is 6%? $

2. Davis Inc.'s bonds currently sell for $800 and have a par value of $1,000. They pay a $100 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,200. What is their Capital Gain Yield (CGY)?

3. A 10-year, 5% semiannual coupon bond selling for $1,135.90 can be called in 4 years for $1,200 (hint: par value is $1,000). What is its yield to maturity (YTM)?

4. A 10-year, 5% semiannual coupon bond selling for $1,135.90 can be called in 4 years for $1,200 (hint: par value is $1,000). What s its current yield (CY)?

5. A 10-year, 10% semiannual coupon bond selling for $1,135.90 can be called in 4 years for $1,200 (hint: par value is $1,000). What is its yield to call (YTC)?

6. Davis Inc.'s bonds currently sell for $800 and have a par value of $1,000. They pay a $100 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,200. What is their yield to maturity (YTM)?

7. Davis Inc.'s bonds currently sell for $800 and have a par value of $1,000. They pay a $60 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,200. What is their Expected Current Yield (CY)?

8. Davis Inc.'s bonds currently sell for $800 and have a par value of $1,000. They pay a $60 annual coupon and have a 20-year maturity, but they can be called in 5 years at $1,200. What is their yield to Call (YTC)?

9. Kimberly’ Motors has a beta of 1.40, the T-bill rate is 3.00%, and the Tbond rate is 7.0%. The annual return on the stock market during the past 3 years was 15.00%, but investors expect the annual future stock market return to be 10.00%. Based on the SML, what is the firm's required return?

10. Suppose the interest rate (return rate) on a 1-year T-bond is 3.0% and that on a 2-year T-bond is 6.0%. Assuming the pure expectations theory is correct, what is the market's forecast for 1-year rates 1 year from now?

11. Stacker’s Corporation's bonds have a 10-year maturity, a 10.00% semiannual coupon, and a par value of $1,000. The going interest rate (rd) is 2.00%, based on semiannual compounding. What is the bond’s price?

12. If the pure expectations theory holds, what does the market expect will be the interest rate (expected return rate) on one-year securities, three years from now? (1year maturity yield is 6.0%; 2year maturity yield is 6.1%; 3year maturity yield is 6.3%; 4year maturity yield is 6.3 %; 5year maturity yield is 6.3%)? (Hints: Draw the timeline and then calculate the interest rate (expected return rate) on two-year securities, two years from now.)