The main objective of a supply chain is to maximize the overall value created. Briefly describe the importance to

implement such objective across the supply chain rather than to individual member of the supply chain.

Kahn Inc. has a target capital structure of 40% common equity and 60% debt to fund its $10 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 12%, a before-tax cost of debt of 8%, and a tax rate of 25%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D1) is $2, and the current stock price is $35.

What is the company's expected growth rate? Do not round intermediate calculations. Round your answer to two decimal places. %

If the firm's net income is expected to be $1.4 billion, what portion of its net income is the firm expected to pay out as dividends? Do not round intermediate calculations. Round your answer to two decimal places. (Hint: Refer to Equation below.) Growth rate = (1 - Payout ratio)ROE

As a manager of UAA Company your task is to evaluate the investment potential of two mutually exclusive projects using the data below.

Market return (Rm): 10%

Risk-free rate of return (Rf): 2.5%

UAA stock beta: 1.60

1. Assume that UAA is an all equity firm. Use the Capital Asset Pricing Model (CAPM) to determine the Required Rate of Return for this firm?
2. Calculate the IRR for each project using the IRR function in Excel?
3. Calculate the NPV for each project using the NPV function in Excel?
4. Which, if either, of the projects should the company accept? Explain why?

Question 6:
XYZ Construction is considering two projects to develop. The expected cash inflows are
as follows :
Project M Project N
Year 1 10,000 25,000
Year 2 15,000 25,000
Year 3 20,000 25,000
Year 4 25,000 25,000
Year 5 30,000 25,000
Each Project requires an investment of $100,000. A rate of 10% has been selected for the NPV
Analysis.
Required:
a) Calculate the NPV and the Profitability Index and suggest which project should be
recommended based on each method.
b) Explain what the key decisions are a Finance Manager has to take in an
Organization with suitable examples.

Professor,

In trying to apply my knowledge in the real world, I am trying to create a realistic retirement schedule. However, I am running into difficulties using both a financial calculator as well as our equations from class in doing this.

I am trying to do the following: plan a retirement schedule between the ages of 22 and 68, in which I would deposit 25% of my income each year. The income starts at 80,000 with an annual growth rate of 5% and, to be realistic, assuming an interest rate of 2.5%. I will assume for simplicity that I receive my first salary ($80,000) when I turn 22, and my last salary when I turn 68. As soon as I receive a salary, I will save 25% of it.

I would like to know (1) how much I will have in my retirement account when I turn 68, immediately after the last deposit, and (2) what single deposit made on my 22^nd birthday would give the same account balance when I turn 68.

However, this raises issues, as if I try to use the equation for the present value of a growing annuity with a 5% growth rate and 2.5% discount rate, r-g will yield a negative number. Also, I could not find online how to do this on my HP 10bII+ financial calculator and I don't want to manually enter 47 payments.

Do you know how I could overcome this obstacle?

All the best,

Jimmy

Unfortunately, I forgot to reply Jimmy’s email and I would like to get back to him as soon as possible. I want to answer Jimmy’s questions using the formulas we learned in class (not the calculator or Excel). Can you help me draft a response? You may use the calculator or Excel for calculations, but I want to send Jimmy the formula solution.

What is the future value of an annuity due that pays $1000 for 5 years if the appropriate discount rate is five percent? What’s the present value of this annuity due?

please show all work and steps not with excel

Faleye Consulting is deciding which of two computer systems to purchase. It can purchase state-of-the-art equipment (System A) for $25,000, which will generate cash flows of $10,000 at the end of each of the next 6 years. Alternatively, the company can spend $14,000 for equipment that can be used for 3 years and will generate cash flows of $10,000 at the end of each year (System B). If the company’s WACC is 5% and both “projects” can be repeated indefinitely, which system should be chosen, and what is its EAA? Do not round intermediate calculations. Round your answer to the nearest cent.

Choose Project ___ , whose EAA = $____

Carlsbad Corporation's sales are expected to increase from $5 million in 2019 to $6 million in 2020, or by 20%. Its assets totaled $4 million at the end of 2019. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2019, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 5%.

1. Assume that the company pays no dividends. Use the AFN equation to forecast the additional funds Carlsbad will need for the coming year. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.
   $  
2. 
   
3. Why is this AFN different from the one when the company pays dividends?
   
   1. Under this scenario the company would have a lower level of retained earnings, which would decrease the amount of additional funds needed.
   2. Under this scenario the company would have a higher level of retained earnings, which would reduce the amount of additional funds needed.
   3. Under this scenario the company would have a higher level of retained earnings, which would reduce the amount of assets needed.
   4. Under this scenario the company would have a higher level of spontaneous liabilities, which would reduce the amount of additional funds needed.
   5. Under this scenario the company would have a lower level of retained earnings, which would increase the amount of additional funds needed.
   
   

Calculate the Macaulay duration of an 8%, $1,000 par bond that matures in three years if the bond's YTM is 10% and interest is paid semiannually. You may use Appendix C to answer the questions.

Calculate this bond's modified duration. Do not round intermediate calculations. Round your answer to two decimal places.

  years

Assuming the bond's YTM goes from 10% to 8.5%, calculate an estimate of the price change. Do not round intermediate calculations. Round your answer to three decimal places. Use a minus sign to enter negative value, if any.

  %

Question 5:
The Kay Company has the following Capital structure as at 31st March 2019.
Based on Book Value Based on Market Value % Costs
Debentures 300,000 330,000 7
Preference 100,000 110,000 9
Equity 1,500,000 1,700,000 15
Debt 200,000 180,000 10
Required:
Determine the Weighted Average cost of capital using:
a) Book Value weights
b) Market Value weights
c) What are the factors affecting Cost of Capital?

You have a​ $10,000 balance on your credit​ card, and you want to pay it off in equal semiannual​ (every 6​ months) payments for 5 years. If the card has an​ 11% APR and compounds​ monthly, answer the following​ questions:

​a) What is the effective semiannual interest​ rate?

​b) How much do you pay every six​ months?

​c) How much total interest will you pay by the time​ you've paid off the​ card?

Given that the risk-free rate is 5%, the expected return on the market portfolio is 20%, and the standard deviation of returns to the market portfolio is 20%, answer the following questions:

a. You have $100,000 to invest. How should you allocate your wealth between the risk free asset and the market portfolio in order to have a 15% expected return?

b. What is the standard deviation of your portfolio in (a)?

c. Now suppose that you want to have a portfolio, which pays 25% expected return. What is the weight in the risk free asset and in the market portfolio?

d. What do these weights mean: What are you doing with the risk free asset and what are you doing with the market portfolio?

e. What is the standard deviation of the portfolio in c?

f. What is your conclusion about the effect of leverage on the risk of the portfolio?

PLEASE SHOW ALL WORK