Questions
Project L costs $30,000, its expected cash inflows are $8,000 per year for 8 years, and...

Project L costs $30,000, its expected cash inflows are $8,000 per year for 8 years, and its WACC is 10%. What is the project's discounted payback? Do not round intermediate calculations. Round your answer to two decimal places.

In: Finance

What's the FCFF of a company with total revenues of $843 million, operating profit margin of...

What's the FCFF of a company with total revenues of $843 million, operating profit margin of 32%, tax rate of 31% and reinvestment rate of 37%? Answer in millions, rounded to one decimal place.

In: Finance

Project L costs $64,749.69, its expected cash inflows are $13,000 per year for 10 years, and...

Project L costs $64,749.69, its expected cash inflows are $13,000 per year for 10 years, and its WACC is 14%. What is the project's IRR? Round your answer to two decimal places.

In: Finance

Ben Bader is considering selling an apartment building that he bought several years ago for $820,000,...

Ben Bader is considering selling an apartment building that he bought several years ago for $820,000, including transaction costs. He has claimed total (cumulative) depreciation (cost recovery allowances) of $255,000. He has made no capital improvements during his holding period.

Bader has been offered $900,000 for this property ($600,000 over the existing $600,000 mortgage note, to which the property will remain subject when sold). Terms of the offer are $90,000 in cash at the closing. Buyer assumes the $600,000 balance on the existing first mortgage note and signs a note and purchase-money mortgage for the remaining $210,000 of the purchase price. The $210,000 note provides for three equal annual payments including principle and interest, with interest at 12%

If Bader accepts this offer and incurs $50,000 of sales costs, what will be the resultant increase in his taxable income in the year of the transaction and in each of the three succeeding years, assuming he uses the installment method of reporting the sale? Bader has no imputed interest problem, and the property generate zero taxable income each year if it is not sold. Bader has no other outstanding debts.

In: Finance

Bonds are a liability (debt) for a company, stock is equity and therefore, a form of...

Bonds are a liability (debt) for a company, stock is equity and therefore, a form of capital. Using the information and terminology in this module and research you complete on your own, determine the pros and cons for a company for issuing bonds and stocks. Assess the following components:

  • Advantages
  • Disadvantages
  • Potential for Earnings
  • Risk
  • Access to funds
  • Tax implications

In: Finance

4. $10,000 is deposited in a savings account earning 1.75% simple interest. What is the future...

4. $10,000 is deposited in a savings account earning 1.75% simple interest.

What is the future value (nearest penny) of the $10,000 after 5 years?

What is the future value after 5 years if the same account earns 1.75% interest compounded annually?  

  1. You borrow $2000 on March 20 at 15% simple interest.  

a. How much interest (to the nearest penny) accrues by September 20 (180 days later). Assume ordinary interest.  

b. What is the total amount that you must repay?

  1. A car has an advertised price of $22,000 cash or $650 per month for 4 years. If you pay the $650 per month for 4 years, what is the total amount you would be paying for the car?

  1. If I = Prt and I = $398.90, r = 9.85% and t = 1 year, how much is P (to the nearest dollar)?  

  1. If a loan is held for 180 days, then t is about: A. 180   B. 1/2   C. 1/4   D. 3  

Please show work. Thank you.

In: Finance

Kolby’s Korndogs is looking at a new sausage system with an installed cost of $685,000. The...

Kolby’s Korndogs is looking at a new sausage system with an installed cost of $685,000. The asset qualifies for 100 percent bonus depreciation and can be scrapped for $91,000 at the end of the project’s 5-year life. The sausage system will save the firm $195,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $47,000. If the tax rate is 21 percent and the discount rate is 10 percent, what is the NPV of this project?

In: Finance

Use the information in the table State Probabilty Ret(US) Ret(UK) Ret(Brazil) 1 .30 .10 .14 .06...

Use the information in the table

State

Probabilty

Ret(US)

Ret(UK)

Ret(Brazil)

1

.30

.10

.14

.06

2

.30

.08

.07

.20

3

.40

.14

.11

.06

  1. What is the expected return of a portfolio with 25% of wealth invested in the US, and 75% invested in the UK?
  2. What is the standard deviation of return of a portfolio with 25% of wealth invested in the US, and 75% invested in the UK?
  3. What is the covariance of return between the US and the UK?
  4. Can an investor obtain diversification gains by investing in both the US and the UK?  Why or why not?  Be sure to provide quantitative justification for your answer.

In: Finance

CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new...

CSM Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $411,000 is estimated to result in $152,000 in annual pretax cost savings. The press is eligible for 100 percent bonus depreciation and it will have a salvage value at the end of the project of $53,000. The press also requires an initial investment in spare parts inventory of $15,800, along with an additional $2,800 in inventory for each succeeding year of the project. The shop’s tax rate is 23 percent and its discount rate is 10 percent. Calculate the project's NPV.

In: Finance

Suppose the average return on Asset A is 6.8 percent and the standard deviation is 8...

Suppose the average return on Asset A is 6.8 percent and the standard deviation is 8 percent, and the average return and standard deviation on Asset B are 3.9 percent and 3.3 percent, respectively. Further assume that the returns are normally distributed. Use the NORMDIST function in Excel® to answer the following questions.
a. What is the probability that in any given year, the return on Asset A will be greater than 10 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is the probability that in any given year, the return on Asset B will be greater than 10 percent? Less than 0 percent? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)
c-1. In a particular year, the return on Asset A was −4.35 percent. How likely is it that such a low return will recur at some point in the future? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
c-2. Asset B had a return of 10.6 percent in this same year. How likely is it that such a high return will recur at some point in the future? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

In: Finance

Major concepts with which you should have some familiarity include: FINANCE Financial instrument types (e.g., stocks,...

Major concepts with which you should have some familiarity include:

FINANCE

  • Financial instrument types (e.g., stocks, bonds) and pricing concepts

  • Financial ratio interpretation

  • Financial criteria for evaluating projects (e.g., cash flows, NPV, payback period,

    etc.)

  • Valuation of stocks and bonds

  • Break-even – term and applicatio

  • Goals of the corporation

  • Market beta and risk analysis

  • Benchmarking

In: Finance

Briefly discuss the advantages and disadvantages of statistical sampling.

Briefly discuss the advantages and disadvantages of statistical sampling.

In: Finance

t year-end 2018, Wallace Landscaping’s total assets were $2.17 million, and its accounts payable were $505,000....

t year-end 2018, Wallace Landscaping’s total assets were $2.17 million, and its accounts payable were $505,000. Sales, which in 2018 were $2.8 million, are expected to increase by 15% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $405,000 in 2018, and retained earnings were $280,000. Wallace has arranged to sell $120,000 of new common stock in 2019 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2019. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 7%, and 60% of earnings will be paid out as dividends.

What was Wallace's total long-term debt in 2018? Do not round intermediate calculations. Round your answer to the nearest dollar. $

What were Wallace's total liabilities in 2018? Do not round intermediate calculations. Round your answer to the nearest dollar. $

How much new long-term debt financing will be needed in 2019? (Hint: AFN - New stock = New long-term debt.) Do not round intermediate calculations. Round your answer to the nearest dollar. $

In: Finance

River community operating metrics form question Profit per inpatient discharge. What metric is used to get...

River community operating metrics form question Profit per inpatient discharge. What metric is used to get the profit for inpatient discharge, profit per outpatient visit and the net revenue per discharge and net revenue per visit.

In: Finance

You have invested a portfolio comprised of Dell, Apple and Microsoft. Calculate the expected return and...

You have invested a portfolio comprised of Dell, Apple and Microsoft. Calculate the expected return and standard deviation of the portfolio given the information below. (SHOW IN EXCEL). Provide step by step solution.

1)Calculate the Expected return of the portfolio. (EXCEL)

2) The variance of the portfolio (EXCEL)

3) The standard deviation of the portfolio ( EXCEL)

Money spent Dell $1680
Money spent Apple $1805
Money spent Microsoft $1584
Expected Return Dell 41%
expected return Apple 23%
expected return Microsoft 20%
standard deviation dell 14%
standard deviation apple 15%
standard deviation Microsoft 11%
correlation coefficient dell and apple 0.22
correlation coefficient dell and Microsoft 0.42
correlation coefficient Apple and Microsoft 0.25

  

In: Finance