a proposed new investment has projected sales of $825,000. Variable costs are 55 percent of sales and fixed costs are $237,150; depreciation $91,000 per year. Prepare a pro forma income statement assuming a tax rate of 25 percent. What is projected net income? If the project costs $2,000,000, lasts for 6 years and the cost of capital is 15%, compute the NPV and IRR for the project.

How does Amazon CEO Jeff Bezos Achieve Cultural Diversity and what are his best practices and initiatives for achieving cultural diversity in the organization?

For example, does his executive board contain any minorities?

Explain which leadership practices were successful in diversity efforts and which practices needed improvement.

ECO Vietnam is planning to improve the transportation to Gia Bic Village by providing more ecofriendly option. The current fuel powered bus has been used for the past 4 years and was originally planned to be used for 10 years. It costed $1,000,000 to acquire, and was being depreciated straightline over 8 year period. However, it was found that the fuel powered bus began to emit black CO2 gases, and would violate their mission and vision as an ecotourism provider. The company would therefore like to investigate two mutually exclusive projects in order to replace the fuel powered bus. One option is an electric bus and another option is a hybrid electric bus. Both should be able to fit around 40 ecotourists. They have already conducted and paid $20,000 for an assessment of the potential of using electric and hybrid electric buses in ecotourism operations. The board of directors usually would like to gain back the investment amount within 5 years. The current fuel powered bus can be sold to another tourism operator at a salvage value of $170,000 if a new bus is acquired. The current corporate tax rate is 20%.

A new electric bus for use in protect areas cost $6,500,000, while the charging station for the bus costs $5,000 including installation. The firm’s financing costs are $32,000 per year. Administrative and legal fees associated with the capital acquisition are expected to be $9,000 and $4,000, respectively. The economic life of the investment is 7 years and will depreciate straight-line to a zero value over 10 years. Management team expects the electric bus can be sold after 7 years at a price of $2,000,000. ECO Vietnam expects the electronic bus will reduce fuel expenses by $980,000 annually, with additional revenues of $75,000 per year. Hopefully, with the word-of-mouth, more ecotourist will be attracted to visit this village, and should bring in 11% growth in revenues per year. Electricity fees initially are $80,000 and are expected to grow at 3% each year. To support the use of environmentally friendly transportation, the government will subsidize $50,000 annually for the first 5 years to companies not using fuel-powered buses.

The other option, a second hand hybrid electric bus costs $2,800,000, including maintenance fees. Administrative and legal fees associated with this acquisition are expected to be $5,000 and $8,000, respectively. The economic life of the investment is 5 years and will depreciate on a five-year MACRS to a salvage value of $0. Management team expects the hybrid electric bus can be salvaged at the end of it’s economic life at price of $280,000. ECO Vietnam believes fuel expenses will be reduced by $670,000 annually, with a 3% decrease in savings per year as the battery becomes less efficient.

Additional revenues will be the same as the electric bus of $75,000 per year, with a 11% growth in revenues per year. Electricity fees start at $15,000 and are expected to grow at 3% each year. For this kind of hybrid bus, additional spare parts of $5,000 will need to be prepared immediately, and accounts payable will increase about $3,000 annually once the bus is in use.

Currently ECO Vietnam has 20,000 zero coupon bonds with 10 year maturity, selling for 40% of the par value, 1,500,000 share of common stock, selling for $18 per share, with a beta of 1.3. Market risk premium is 6.50%, and the risk-free rate is 1.25%. The bus project is a little bit less risky than the company’s usual projects, so ECO Vietnam determined to apply an adjusted factor of -3% to the cost of capital. Given the above information about the projects and the cost of capital for ECO Vietnam, do all the calculations that are necessary in order to make a value creating decision. The general format is up to you, as long as all the components for making such decision are present. You should focus on using the right methods, rather than on getting the right answer.

Explain your recommendation to the board of directors

List and explain three (3) ways/channels in which countries finance their development using international financial markets. Explain how the choice of these channels can affect the development prospects of a country.

30-year bond has a 7% (once a year) coupon and an 8% yield to maturity. A) What is the modified duration? B) Without using convexity, if the yield changes to 10%, how much will the price of the bond change (in %)?

The CEO of Kingdom Ltd. is considering whether or not to convert the firm’s current all-equity capital structure to one that has 50% debt (by retiring equity and leaving its total value unchanged). Currently, the firm has 1,000 shares outstanding and its share price is $40. The firm’s business is quite mature and it expects to generate stable annual earnings before interest and tax (EBIT) at $2,000 forever. As the firm has no further growth opportunities, it practices a 100% dividend payout policy. The market interest rate on borrowing is 8%. Brian Ng, a major shareholder of the firm, owns 20% of the total shares. Assume there is no tax and all other assumptions in the M&M model are met, and that the share price does not change during the capital structure conversion. a.Compute the annual payout to Brian under BOTH the all-equity and the levered capital structure. Assume that he will keep all his 200 shares under the levered capital structure. b.If the firm decides to change to the new capital structure, show how Brian can use homemade leverage to resemble his payoff under the all-equity capital structure. Explain and comment on the implication of this.

14) B Markets has sales of $848,600, net income of $94,000, dividends paid of $28,200, total assets of $913,600, and current liabilities of $78,900. Assume that all costs, assets, and current liabilities change spontaneously with sales. The tax rate and dividend payout ratios remain constant. If the firm's managers project a firm growth rate of 15 percent for next year, what will be the amount of external financing needed to support this level of growth? Assume the firm is currently operating at full capacity.

A: $49,535

B: $68,211

C: −$10,406

D: $13,909

E; $32,408

ICU Window, INC.is trying to determine its cost of debt. The firm has a debt issue outstanding with 11 years to maturity that is quoted at 111 percent of face value. The issue makes semiannual payments and has an embedded cost of 8.2 percent annually.

a. What is the company's pretax cost of debt?

b. If the tax rate is 24 percent, what is the after tax cost of debt?

a. Pretax cost of debt
   b. After tax cost of debt

Provide actual examples for each factor:
- Interest rate differentials
- Inflation rate differentials
- Country’s incoming level differentials
- Change in government controls such as international barriers
- Change in expectations of future exchange rates

What are some considerations to keep in mind when determining strategies for structuring real estate deals?  

A small company heats its building and spends ​$8,400 per year on natural gas for this purpose. Cost increases of natural gas are expected to be 8​% per year starting one year from now​ (i.e., the first cash flow is ​$9,072 at EOY​ one). Their maintenance on the gas furnace is ​$345per​ year, and this expense is expected to increase by 12​% per year starting one year from now​ (i.e., the first cash flow for this expense is ​$386.4 at the EOY​ one). If the planning horizon is 14 ​years, what is the total annual equivalent expense for operating and maintaining the​ furnace? The interest rate is 15​% per year.

discrete compounding when iequals=8​% per year.

discrete compounding when iequals=12

discrete compounding when iequals=15​% per year.

Buffelhead’s stock price is $220 and could halve or double in each six–month period (equivalent to a standard deviation of 98%). Suppose that you own a one–year American put option on Buffelhead stock with an exercise price of $220. The interest rate is 20% a year.

(a) Calculate the value of the put.
(b) Now compare the value with that of an equivalent European put option.

7.        Calculate the annual purchasing power over the term of a 5-year loan of provided to Shane Kavanagh, a 37-year old bricklayer. The interest-only loan of $80,000 requiring annual repayments in arrears was made by the Beneficial Finance Agency on a variable interest rate basis. The variable interest rate over the loan term was as follows:

            Details             Year 1              Year 2              Year 3              Year 4              Year 5

            Interest rate       7%                    8%                 8.5%               9.2%                  9%

            Other details over this period are shown below:

            Details             Year 1              Year 2              Year 3              Year 4              Year 5

            Inflows:

            Salary              $65,000           $75,000           $82,000           $88,000           $90,000

            Investments     $5,000              $10,000           $12,000           $11,000           $78,000

            Outflows:

            Taxation          $ 8,000           $10,000           $14,000           $16,000           $15,000

A German company expects to pay 5 million Australian Dollars (AUD in 3 months. a. Name 3 principal methods to do so b. How could the German company hedge its currency risk using futures contracts traded on the Chicago Mercantile Exchange (CME)? What contracts could the company enter into? How many would the company enter into? Buy or sell them?