Suppose a five-year, $1000 bond with annual coupons has a price of $950 and a yield to maturity of 6%. What is the bond's coupon rate?

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $50,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 4%. He currently has $95,000 saved, and he expects to earn 10% annually on his savings. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below.

Guthrie Enterprises needs someone to supply it with 190,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. It will cost $2,450,000 to install the equipment necessary to start production; you’ll depreciate this cost straight-line to zero over the project’s life. You estimate that in five years this equipment can be salvaged for $200,000. Your fixed production costs will be $685,000 per year, and your variable production costs should be $9.35 per carton. You also need an initial investment in net working capital of $355,000. If your tax rate is 23 percent and you require a 10 percent return on your investment, what bid price per carton should you submit? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Define and discuss the following:

Term Structure of Interest Rates aka the Yield Curve

(be sure to address the current state of the yield curve and current market expectations based on the current state of the yield curve) (also see the Module Notes for links on this topic)

Briefly compare and contrast the NPV, PI and IRR criteria. What are the advantages and disadvantages of using each of these methods?

What are the different forms of payment to providers?

Why do organizations choose to shift costs to other payers?

Broussard Skateboard's sales are expected to increase by 25% from $8.0 million in 2019 to $10.00 million in 2020. Its assets totaled $2 million at the end of 2019. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 3%, and the forecasted payout ratio is 55%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.

4. Break-even analysis To be profitable, a firm has recover its costs. These costs include both its fixed and its variable costs. One way that a firm evaluates at what stage it would recover the invested costs is to calculate how many units or how much in dollar sales is necessary for the firm to earn a profit. Consider the case of Petrox Oil Co.: Petrox Oil Co. is considering a project that will have fixed costs of $15,000,000. The product will be sold for $41.50 per unit, and will incur a variable cost of $11.25 per unit. Given Petrox’s cost structure, it will have to sell units to break even on this project (Q BE ). Petrox Oil Co.’s marketing sales director doesn’t think that the market for the firm’s goods is big enough to sell enough units to make the company’s target operating profit of $25,000,000. In fact, she believes that the firm will be able to sell only about 150,000 units. However, she also thinks the demand for Petrox Oil Co.’s product is relatively inelastic, so the firm can increase the sale price. Assuming that the firm can sell 150,000 units, what price must it set to meet the CFO’s EBIT goal of $25,000,000? $291.82 $277.92 $319.61 $347.40 What affects the firm’s operating break-even point? Several factors affect a firm’s operating break-even point. Based on the scenarios described in the following table, indicate whether these factors would increase, decrease, or leave unchanged a firm’s break-even quantity—assuming that only the listed factor changes and all other relevant factors remain constant. Increase Decrease No Change The firm’s fixed costs increase. The variable cost per unit decreases. The amount of debt increases, causing the firm’s total interest expense to increase. When fixed costs are high, a small decline in sales can lead to a decline in return on equity (ROE).

You are the number one free agent in the National Hackey-Sack League. You get offered three different 5-year contracts, denoted A, B, and C below. Assuming you can earn 12% per year on your investments, which contract should you take?

Contract A: You are offered $100,000 today, $200,000 in one year, and a final payment of $200,000 in five years.

Contract B: You will get $200,000 today, $200,000 in three years, and a final payment of $100,000 in five years.

Contract C: You will get $100,000 each of the next five years.

When Alfred Nobel​ died, he left the majority of his estate to fund five​ prizes, each to be awarded annually in perpetuity starting one year after he died.​ (The sixth​ one, in​ economics, was added​ later.)

a. If he wanted the cash award of each of the five prizes to be

​$35 comma 000

and his estate could earn

88​%

per​ year, how much would he need to fund his​ prizes?

b. If he wanted the value of each prize to grow by

44​%

per year​ (perhaps to keep up with​ inflation), how much would he need to​ leave? Assume that the first amount was still

​$35 comma 000.

c. His heirs were surprised by his will and fought it. If they had been able to keep the amount of money you calculated in b and had invested it at

88​%

per​ year, how much would they have in

20152

119

years after he​ died

Making Decisions

Wexly is a large publicly owned corporation which you are the president. When making decisions, do you make them to maximize stockholders’ wealth or for your personal gains? What actions could stockholders take to make sure the interest of both parties is served? What can influence management’s actions?

QUESTION 22 Given the financial statements below for Dragonfly Enterprises, what would be the sustainable growth rate (SGR) if the company decided to change the dividend payout rate to 51.8%? Enter your answer as the nearest tenth of a percent (e.g., 12.3), but do not include the % sign. Dragonfly Enterprises Income Statement ($ Million) 2011 Sales 370 Cost of Goods Sold 226 Selling, General, & Admin Exp. 62 Depreciation 20 Earnings Before Interest & Taxes 62 Interest Expense 12 Taxable Income 50 Taxes at 40% 20 Net Income 30 Balance Sheets as of 12-31 Assets 2010 2011 Cash 10 10 Account Receivable 46 50 Inventory 43 45 Total Current Assets 99 105 Net Fixed Assets 166 195 Total Assets 265 300 Liabilities and Owners Equity 2010 2011 Accounts Payable 26 30 Notes Payable 0 0 Total Current Liabilities 26 30 Long-Term Debt 140 150 Common Stock 22 22 Retained Earnings 77 98 Total Liab. and Owners Equity 265 300

Q13) The market risk premium for next period is 8.74% and the risk-free rate is 3.79% . Stock Z has a beta of 0.789 and an expected return of 10.03%. Compute the following:

a) Market's reward-to-risk ratio :

b) Stock Z's reward-to-risk ratio :

Decision #1: Which set of Cash Flows is worth more now? Assume that your grandmother wants to give you generous gift. She wants you to choose which one of the following sets of cash flows you would like to receive: Option A: Receive a one-time gift of $ 10,000 today.

Option B: Receive a $1500 gift each year for the next 10 years. The first $1500 would be received 1 year from today.

Option C: Receive a one-time gift of $18,000 10 years from today. Compute the Present Value of each of these options if you expect the interest rate to be 3% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth ______today.

Option B would be worth $__________ today.

Option C would be worth $__________ today.

Financial theory supports choosing Option _______

Compute the Present Value of each of these options if you expect the interest rate to be 6% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $__________ today.

Option B would be worth $__________ today.

Option C would be worth $__________ today.

Financial theory supports choosing Option _______

Compute the Present Value of each of these options if you expect to be able to earn 9% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $__________ today.

Option B would be worth $__________ today.

Option C would be worth $__________ today.

Financial theory supports choosing Option _______

Please show how this is done on Excel if possible, Thanks!

A)You have just taken a 30-year mortgage loan for $260,000. The annual percentage rate on the loan is 4.25%, and payments will be made monthly. Estimate your monthly payments. Assume compounding is monthly. Prepare an amortization table.

B) At age 30, Susan starts investing $18,000 per year with the investments at the end of each year. She does this for 9 years. She never invests any more but she leaves this money in the no-load mutual fund. The fund earns 8% per year. Calculate the value of the fund when Ann is 65. Assume compounding is annually.

C) For question B above, assuming Ann makes equal withdrawals from her retirement account at the end of each year from age 65 to age 85, how much does she withdraw to bring the fund to zero?