If a nominal interest rate of 10​% is compounded​ continuously, determine the unknown quantity in each of the following​ situations:

a. What uniform EOY amount for 11 years is equivalent to ​$8 comma 0008,000 at EOY 11​?

b. What is the present equivalent value of ​$900 per year for 15 ​years?

c. What is the future equivalent at the end of the fifth year of ​$246 payments made every six months during the five

​years? The first payment occurs six months from the present and the last occurs at the end of the fifth year.

d. Find the equivalent​ lump-sum amount at EOY nine when P0 =​$1,3001.

i=10%

Suncor Energy Inc. (SU) shares are listed on the New York Stock Exchange. At 9:30 a.m. on January 14, 2016, these shares sold for $21.85 per share. The volatility on the returns of Suncor shares is approximately 24%. The following call and put option contracts were available for the months of January, February, and March:

Each option contract involves 100 shares. The risk-free rates for these three expiration dates are 0.6%, 1%, and 1.2%. All three rates are continuously compounded.  

Given the information on Suncor shares and options above, construct a protective put using the 23-put with February expiration. Hold the protective put position until expiration.

a.       Write out the payoff and profit function.                                          

b.       Use a table to show the payoffs and profits when the put option expires in-the-money and out-of-the-money.    

c.       Calculate the potential profits for this protective put, using share prices ranging from 0 to 26. Plot a graph of these potential profits, with share prices on the x-axis, and profits on the y-axis. (Hint: It may be easier to do this in an Excel spreadsheet.)                                                                                                                             

d.       What is the breakeven share price at expiration for this protective put?      (1 mark)

e.       What is the maximum profit and maximum loss on this protective put?     (1 mark)

The table below shows a condensed income statement and balance sheet for Androscoggin Copper’s Rumford smelting plant (figures in $ millions). Assume the cost of capital is 10%.

a. Calculate the plant’s EVA. (Enter your answer in millions rounded to 2 decimal places.)

Answer: 4.78

b. As the table above shows, the plant is carried on Androscoggin’s books at $48.86 million. However, it is a modern design, and could be sold to another copper company for $101 million. How should this fact change your calculation of EVA? (Negative answers should be indicated by a minus sign. Enter your answer in millions rounded to 2 decimal places.)

19. You are considering leasing a car. You notice an ad that says you can lease the car you want for $417.00 per month. The lease term is 60 months with the first payment due at inception of the lease. You must also make an additional down payment of $2,370. The ad also says that the residual value of the vehicle is $18,500. After much research, you have concluded that you could buy the car for a total "driveout"price of $35,800. What is the quoted annual interest rate you will pay with the lease? (please solve in excel and explain which pieces of information are relevant) :) Thank you!

Florida Company (FC) and Minnesota Company (MC) are both service companies. Their historical return for the past three years are: FC: 22%,-36%, -48%; MC: 14%, -20%, -22%. Calculate the sample covariance between the returns of FC and MC.(For these problems don't enter the % into your formula, e.g. treat "10%" as "10", not as "0.10". If you use the =COVAR function in Excel you must multiply the result by {3/2} to adjust for the degrees of freedom.  If you use the =COVARIANCE.S function in Excel, then you won't need to multiply the result by 3/2 as that function automatically adjusts for the degrees of freedom.)

Florida Company (FC) and Minnesota Company (MC) are both service companies. Their historical return for the past three years are: FC: 42%,-4%,18%; MC: -30%, 40%, -21%. What is the standard deviation of the portfolio with 50% of the funds invested in FC and 50% in MC? (For these problems don't enter the % into your formula, e.g. treat "10%" as "10", not as "0.10". You can use the =VAR and =STDEV functions in Excel.)

Florida Company (FC) and Minnesota Company (MC) are both service companies. Their historical return for the past three years are: FC: 14%,-3%,3%; MC: -31%,-26%,-7%. What is the sample variance of the portfolio with 50% of the funds invested in FC and 50% in MC. (For these problems don't enter the % into your formula, e.g. treat "10%" as "10", not as "0.10". You can use the =VAR function in Excel.)

Florida Company (FC) and Minnesota Company (MC) are both service companies. Their historical return for the past three years are: FC: -26%,-28%,-12%; MC: -17%,38%,-49%. Calculate the correlation coefficient between the return of FC and MC. Enter your answer out to the fourth decimal, e.g. )".0901". (For these problems don't enter the % into your formula, e.g. treat "10%" as "10", not as "0.10". You can use the =CORREL function in Excel.)

Florida Company (FC) and Minnesota Company (MC) are both service companies. Their historical return for the past three years are: FC: 40%,-13%,-36% and MC:22%,39%,-28%. If FC and MC are combined in a portfolio with 50% of the funds invested in each, calculate the expected return on the portfolio. (For these problems don't enter the % into your formula, e.g. treat "10%" as "10", not as "0.10". You may want to employ the =AVERAGE function in Excel.)

You purchase 17 call option contracts with a strike price of $95 and a premium of $3.75. Assume the stock price at expiration is $102.46.

a. What is your dollar profit? (Do not round intermediate calculations.)

b. What is your dollar profit if the stock price is $88.41?

You are valuing an investment that will pay you $26,000 per year for the first 14 years, $34,000 per year for the next 10 years, and $47,000 per year the following 11 years (payments are at the end of each year). Another similar risk investment alternative is an account with a quoted annual interest rate of 7.50% with MONTHLY compounding of interest. What is the value in today's dollars of the set of cash flows you have been offered?

(If possible please solve in excel) :)

IRRlMutually

exclusive projects   Bell Manufacturing is attempting to choose the better of two mutually exclusive projects for expanding the​ firm'swarehouse capacity. The relevant cash flows for the projects are shown in the following​ table:

Initial investment        $500,000         $320,000

Year                

1          $130,000         $130,000

2          $120,000         $120,000

3          $130,000         $105,000

4          $200,000         $90,000

5          $250,000         $40,000

The​ firm's cost of capital is 17​%.

a.  Calculate the IRR for each of the projects. Assess the acceptability of each project on the basis of the IRRs.

b.  Which project is​ preferred?

1. You are a shareholder in a C-corporation. The company earns $4.50 per share before taxes. Assume the corporate tax rate is 40%. After paying taxes it will apply its Payout Ratio of 90% and pay dividends accordingly. Assumed the personal income (dividend and non-dividend income) tax rate is 25%.
   1. What is the (per share) corporate tax payment?
   2. What is the dividend?
   3. What is the (per share) personal tax payment?
   4. What is the (per share) after tax income?
   5. Repeat steps a-d assuming the firm is an S-corporation.

Q12. Dormentor Inc. produces, converts, and markets packaging products including boxboard, container board, and numerous other specialty packaging products. In an attempt to increase its organic growth, the company decides to introduce new products. It asks the managers and employees to send in ideas for new products. Before launching products based on any of these ideas, what are the stages that the company has to go through? (1 point, word limit: 100 words)

Mutually

exclusive projects   Hook Industries is considering the replacement of one of its old metal stamping machines. Three alternative replacement machines are under consideration. The relevant cash flows associated with each are shown in the following​ table:

Initial investment        $85,500           $59,900           $129,500

Year                           

1          $17,500           $11,500           $49,900

2          $17,500           $13,600           $29,700

3          $17,500           $16,000           $20,000

4          $17,500           $17,900           $20,100

5          $17,500           $19,500           $20,500

6          $17,500           $25,200           $30,100

7          $17,500           $0                    $39,500

8          $17,500           $0                     $50,000

The​ firm's cost of capital is 14​%

a.  Calculate the net present value (NPV​)of each press.

b.  Using​ NPV, evaluate the acceptability of each press.

c.  Rank the presses from best to worst using NPV.

d.  Calculate the profitability index​ (PI) for each press.

e.  Rank the presses from best to worst using PI.

Suppose you have $42,000 to invest. You’re considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $60 per share. You also notice that a call option with a $60 strike price and six months to maturity is available. The premium is $3. MMEE pays no dividends. What is your annualized return from these two investments if, in six months, MMEE is selling for $67 per share? What about $56 per share?

Lambert Transport is an overland freight service that is operating at full capacity They have sales of $29,000, current assets of $1,600, current liabilities of $1,200, net fixed assets of $27,500, and a 12.8 percent profit margin. The firm has no long-term debt and does not plan on acquiring any. The firm does not pay any dividends. Sales are expected to increase by 11.9 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?

Do Internet research to calculate capital intensity ratio for General Motors company in 2017. Then do the same for Google company in 2017.

Then reflect on capital intensity ratio for both companies, and identify one positive and negative point about capital intensive firms.

In your paper, submit your numbers for both firms in 2017 on (i) Capital Intensity Ratio, (ii) Sales, and (iii) total assets. MAKE SURE TO SHOW YOUR AS TO HOW YOU GOT YOUR FIGURES.

Hint: Capital intensity ratio is the reciprocal of total asset turnover.