Alpha Enterprises, Inc. has a WACC of 14.50% and is considering a project that requires a cash outlay of $1,950 now with cash inflows of $675 at the end of year 1, $600 at the end of year 2, $725 at the end of year 3, $700 at the end of year 4, and $750 at the end of year 5. What is the project's NPV?
In: Finance
You have been hired as a consultant for Pristine UrbanTech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $1.38 million in anticipation of using it as a toxic waste dump site but has recently hired another company to handle all toxic materials. Based on a recent appraisal, the company believes it could sell the land for $1,480,000 on an aftertax basis. In four years, the land could be sold for $1,580,000 after taxes. The company also hired a marketing firm to analyze the zither market, at a cost of $123,000. An excerpt of the marketing report is as follows: The zither industry will have a rapid expansion in the next four years. With the brand name recognition that PUTZ brings to bear, we feel that the company will be able to sell 3,600, 4,500, 5,100, and 4,000 units each year for the next four years, respectively. Again, capitalizing on the name recognition of PUTZ, we feel that a premium price of $630 can be charged for each zither. Because zithers appear to be a fad, we feel at the end of the fouryear period, sales should be discontinued. PUTZ feels that fixed costs for the project will be $415,000 per year, and variable costs are 15 percent of sales. The equipment necessary for production will cost $3.30 million and will be depreciated according to a threeyear MACRS schedule. At the end of the project, the equipment can be scrapped for $390,000. Net working capital of $123,000 will be required immediately. PUTZ has a 40 percent tax rate, and the required return on the project is 13 percent. Assume the company has other profitable projects. MACRS schedule. What is the NPV of the project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
In: Finance
Problem 1292A
Preparation of Ratios
The financial statements for Burch Industries follow:
Burch
Industries Consolidated Income Statements (in thousands, except per share data) 

Year ended December 31,  
2019  2018  2017  
Revenues  $3,930,984  $3,405,211  $3,003,610  
Costs and expenses:  
Cost of goods sold  $2,386,993  $2,089,089  $1,850,530  
Selling and administrative  922,261  761,498  664,061  
Interest  25,739  30,665  27,316  
Other expenses (income)  1,475  2,141  (43)  
Total costs and expenses  $3,336,468  $2,883,393  $2,541,864  
Income before income taxes  $594,516  $521,818  $461,746  
Income taxes  229,500  192,600  174,700  
Net income  $365,016  $329,218  $287,046 
Burch
Industries Consolidated Balance Sheets (in thousands) 

December 31,  
ASSETS  2019  2018  
Current assets:  
Cash and equivalents  $291,284  $260,050  
Accounts receivable, less allowance for doubtful accounts of $19,447 and $20,046  667,547  596,018  
Inventories  592,986  471,202  
Deferred income taxes  26,378  27,511  
Prepaid expenses  42,452  32,977  
Total current assets  $1,620,647  $1,387,758  
Property, plant, and equipment  $571,032  $497,795  
Less accumulated depreciation  (193,037)  (151,758)  
Net property, plant, and equipment  $377,995  $346,037  
Goodwill  157,894  110,363  
Other assets  30,927  28,703  
Total assets  $2,187,463  $1,872,861  
LIABILITIES AND STOCKHOLDERS’ EQUITY 

Current liabilities:  
Current portion of longterm debt  $52,985  $3,652  
Notes payable  108,165  105,696  
Accounts payable  135,701  134,729  
Accrued liabilities  138,563  134,089  
Income taxes payable  17,150  42,422  
Total current liabilities  $452,564  $420,588  
Longterm debt  15,033  77,022  
Noncurrent deferred income taxes  29,965  27,074  
Other noncurrent liabilities  43,575  23,728  
Commitments and contingencies  0  0  
Redeemable preferred stock  300  300  
Total liabilities  $541,437  $548,712  
Stockholders’ equity:  
Common stock at stated value:  
Class A convertible—26,691 and 26,919 shares outstanding  $159  $161  
Class B—49,161 and 48,591 shares outstanding  2,720  2,716  
Capital in excess of stated value  108,451  93,799  
Treasury stock (common at cost)  (7,790)  (6,860)  
Retained earnings  1,542,486  1,234,333  
Total stockholders’ equity  $1,646,026  $1,324,149  
Total liabilities and stockholders’ equity  $2,187,463  $1,872,861 
Use the following data to respond to the requirements
below.
2019  2018  2017  
Average number of common shares outstanding  77,063  76,602  76,067  
Accounts receivable, net  $667,547  $596,018  $521,588  
Inventories  592,986  471,202  586,594  
Total assets  2,187,463  1,872,861  1,708,430  
Stockholders’ equity  1,646,026  1,324,149  1,032,789  
Stock repurchases  930,111  581,134  288,320  
Cash flows from operating activities  190,000  150,000  137,000  
Common dividends paid  57,797  45,195  39,555  
Dividends per common share  0.75  0.59  0.52  
Market price per share:  
High  90.25  77.45  54.50  
Low  55.00  35.12  26.00  
Close  86.33  71.65  43.22 
Year ended December 31,  
Industry Averages  2019  2018  
Return on equity  25.98%  23.04%  
profit margin  0.05  0.04  
Asset turnover  2.24  2.56  
Leverage  2.32  2.25 
6. Perform a Dupont analysis for 2018 and 2019. Round your intermediate calculations and final answers to two decimal places.
Dupont Analysis  
2019  % 
2018  % 
In: Finance
Problem 655 Amortization with Equal Payments [LO3]
Prepare an amortization schedule for a fiveyear loan of $61,000. The interest rate is 8 percent per year, and the loan calls for equal annual payments. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Leave no cells blank  be certain to enter "0" wherever required.) 
Year  Beginning Balance 
Total Payment 
Interest Payment 
Principal Payment 
Ending Balance 
1  $  $  $  $  $ 
2  
3  
4  
5  
How much interest is paid in the third year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 
Interest paid  $ 
How much total interest is paid over the life of the loan? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 
Total interest paid  $ 
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Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to make your dog look glamorous. Below you will find selected information necessary to compute some valuation estimates for the firm. Assume the values provided are from yearend 2015. Also assume that the firm’s equity beta is 1.40, the riskfree rate is 2.20 percent, and the market risk premium is 6.4 percent.
a. Using these values, estimate the current share price of Beagle Beauties stock according to the constant dividend growth model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. If The required return is 12.82 percent. Use the clean surplus relationship to calculate the share price for Beagle Beauties with the residual income model. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Dividends per share  $  2.64  
Return on equity  10.00  %  
Book value per share  $  17.30  
Earnings  Cash Flow  Sales  
2015 value per share  $  5.50  $  6.85  $  25.90  
Average price multiple  13.60  9.57  2.56  
Forecasted growth rate  13.58  %  11.66  %  7.64 
% 
In: Finance
Compensating balance versus discount loan Weathers Catering Supply, Inc., needs to borrow $ 145,000 for 6 months. State Bank has offered to lend the funds at an annual rate of 9.1 % subject to a 9.9 % compensating balance. (Note: Weathers currently maintains $ 0 on deposit in State Bank.) Frost Finance Co. has offered to lend the funds at an annual rate of 9.1 % with discountloan terms. The principal of both loans would be payable at maturity as a single sum.
a. Calculate the effective annual rate of interest on each loan.
b. What could Weathers do that would reduce the effective annual rate on the State Bank loan?
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You own a lot in Key West, Florida, that is currently unused. Similar lots have recently sold for $1,370,000. Over the past five years, the price of land in the area has increased 5 percent per year, with an annual standard deviation of 28 percent. You have approached a buyer and would like the option to sell the land in 12 months for $1,520,000. The riskfree rate of interest is 3 percent per year, compounded continuously. What is the price of the put option necessary to guarantee your sales price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
In: Finance
a. Calculate the future sum of 8,000, given that it will be held in the bank for 77 years at an APR of 66 percent.
b. Recalculate part (a) using compounding periods that are (1) semiannual and (2) bimonthly (every two months).
c. Recalculate parts (a) and (b) for an APR of 12percent.
d. Recalculate part (a) using a time horizon of 14 years (the APR is still 66 percent).
e. With respect to the effect of changes in the stated interest rate and holding periods on future sums in parts (c) and (d), what conclusions do you draw when you compare these figures with the answers found in parts (a) and (b)?
In: Finance
Using the stock prices in Problem 3, calculate the exponential threemonth moving average for both stocks where twothirds of the average weight is placed on the most recent price.
Amazon  
$169.64  $600.36 
$173.29  $613.40 
$180.13  $586.76 
$195.81  $544.10 
$196.69  $529.02 
$204.49  $506.38 
$222.52  $603.69 
$215.23  $540.96 
$216.23  $515.04 
$213.51  $592.64 
$192.29  $599.39 
$173.10  $645.90 
In: Finance
Suppose you are going to receive $13,600 per year for five years. The appropriate interest rate is 8.5 percent. a1 What is the present value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ a2 What is the present value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ b1 Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value $ b2 Suppose you plan to invest the payments for five years. What is the future value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value $
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Develop a business case for using blockchain for asset and wealth management
In: Finance
In: Finance
A German bond that pays annual coupons of 4.5%, has a par value of €1,000, and a YTM of 3.9%. Assuming there are 19 years until maturity, what is the current price of this bond?
In: Finance
AVZ is a startup company who is using all its cash to growth so it does not plan to pay dividends for the next 5 years. The company then plans to start paying annual cash dividends starting in year 6 of $4.00 for 14years. Thereafter, the company will assume a constant growth dividend policy and the estimated growth rate in dividends forever after that point is 4%. The price of the stock is set to yield a return of 10%. What is the price of this stock today?
The price today is $
MMM Inc. has an annual cash dividend policy that raises the dividend each year by 10.00%. Last year's dividend was $1.70 per share. Investors want a 17% return on this stock. What is the price today of this stock if the company will be in business for five years and not have a liquidating dividend (there is no selling price  stock simply cease to exist with no value then)?
The price of this stock today is?
G2 Inc. expects the following dividend pattern over the next seven years:
Year 1 
Year 2 
Year 3 
Year 4 
Year 5 
Year 6 
Year 7 

$1.50 
$1.56 
$1.62 
$1.68 
$1.75 
$1.82 
$1.90 
The company will then have a constant dividend of $1.97 forever. What is the price of this stock today (year 0) if an investor wants to earn 14% rate of return?
In: Finance
________________ by one party to a contract entitles the other party to sue immediately for damages or other remedies.
a. 
Request for specific performance 

b. 
Denial of a request for restitution 

c. 
Demand of assurance of performance 

d. 
Anticipatory repudiation 
If an employer is charged with violating antidiscrimination laws, the employer could defend itself by claiming its action was based on
a. 
bona fide occupational qualification 

b. 
business necessity 

c. 
all of the choices are possible employer defenses. 

d. 
seniority 
According to the textbook, the term ‘ethics’ refers to _________ .
a. 
those behaviors that result in good publicity for a company 

b. 
a conscious system in place for making decisions with moral dimensions 

c. 
behavior people engage in when others are watching 

d. 
the generally accepted standards of right and wrong in a given society 
According to the textbook, the term ‘ethics’ refers to _________ .
a. 
those behaviors that result in good publicity for a company 

b. 
a conscious system in place for making decisions with moral dimensions 

c. 
behavior people engage in when others are watching 

d. 
the generally accepted standards of right and wrong in a given society 
In: Finance