Station WJXT is considering the replacement of its old fully depreciated sound mixer. Two new models are available. Mixer X has a cost of $345,000, a 15-year life, and after-tax cash flows (including the tax shield from depreciation) of $70,000 per year. Mixer Y has a cost of $130,000, a 5-year expected life, and after-tax cash flows (including the tax shield from depreciation) of $60,000 per year. No new technological developments are expected. The discount rate is 12 percent. Should WJXT replace the old mixer, and, if so, with X or Y? (Hint: If WJXT chooses mixer Y, it can always buy a one when the old one is out of use after its economic life. Since there are no technological developments, the new mixer Y will generate the same cashflow)

What are the costs of mutual funds?

How are these costs summarized?

How do mutual funds differ from ETFs?

Dorothy Koehl recently leased space in the Southside Mall and opened a new business, Koehl's Doll Shop. Business has been good, but Koehl frequently run out of cash. This has necessitated late payment on certain orders, which is beginning to cause a problem with suppliers. Koehl plans to borrow from the bank to have cash ready as needed, but first she needs a forecast of how much she should borrow. Accordingly, she has asked you to prepare a cash budget for the critical period around Christmas, when needs will be especially high.

Sales are made on a cash basis only. Koehl's purchases must be paid for during the following month. Koehl pays herself a salary of $4,100 per month, and the rent is $1,500 per month. In addition, she must make a tax payment of $14,000 in December. The current cash on hand (on December 1) is $850, but Koehl has agreed to maintain an average bank balance of $4,500 - this is her target cash balance. (Disregard the amount in the cash register, which is insignificant because Koehl keeps only a small amount on hand in order to lessen the chances of robbery.)

The estimated sales and purchases for December, January, and February are shown below. Purchases during November amounted to $130,000.

1. Prepare a cash budget for December, January, and February.

   I. Collections and Purchases:
   	December	January	February
   Sales	$	$	$
   Purchases	$	$	$
   Payments for purchases	$	$	$
   Salaries	$	$	$
   Rent	$	$	$
   Taxes	$	---	---
   Total payments	$	$	$
   Cash at start of forecast	$	---	---
   Net cash flow	$	$	$
   Cumulative NCF	$	$	$
   Target cash balance	$	$	$
   Surplus cash or loans needed	$	$	$

   
   
2. Suppose Koehl starts selling on a credit basis on December 1, giving customers 30 days to pay. All customers accept these terms, and all other facts in the problem are unchanged. What would the company's loan requirements be at the end of December in this case? (Hint: The calculations required to answer this part are minimal.)
   $

uYour company is looking at a new project in Mexico. The project will cost 9 million pesos. The cash flows are expected to be 2.25 million pesos per year for 5 years. The current spot exchange rate is 9.08 pesos per Canadian dollar. The risk-free rate in the Canada is 4% and the risk-free rate in Mexico 8%. The dollar required return is 15%.

uShould the company make the investment?

6. A stock has a required return of 14%, a constant growth rate of 9%, and a retention rate of

50%. The stock’s price -earnings multiple (P/E) is most likely to be? Show your calculation.

PT. ABC predicts its future dividend profile as follows:
Year Dividend (Rp)
2017 30
2018 10
2019 20
2020 30
2021 35
2022 40
After 2022, ABC assumes constant dividend growth based on 8 percent return on equity (ROE), and 1
0 percent dividend payout ratio. Currently, ABC’s market beta is 1.2 and its market risk premium is 1
0 percent. Meanwhile, the spot price of LQ45 is Rp88, the 6-month LQ45 futures theoretical price is
Rp90.6155, and LQ45 yields 2 percent dividend. Estimate:
(a) Risk free rate (5);
(b) ABC discount rate (5);
(c) ABC intrinsic value in 2018 (10)
Please pick only one correct answer to each sub questions.

What is the difference between an Actively managed mutual fund and a Passively managed mutual fund?

Which has offered better returns to investors historically?

Are there any settings where the other type has tended to offer better returns to investors?

What are index funds?

What does it mean to say that these are benchmarks?

How are they used as benchmarks?

Assume that you are a vending machine dealer. You plan to purchase a vending machine for $200,000. One year later, you are expected to sell it back and receive $224,000 as cash. What is the IRR (internal rate of return) on this investment? Be sure to apply the definition of IRR and show your work.

3 points>

In order to buy the vending machine, you plan on borrowing $80,000 from Bank at 5% of interest rate and raise $120,000 from investors at 10% of cost of equity, are you going to accept this project? Why? (Tax rate is 30%). Show your work.

A tax return preparer has complied with the due diligence requirements set forth in Treasury Regulations for the head of household (HOH) filing status if he or she keeps which of the following records for three years from the latest of the required dates?

A. A copy of Form 8867

B. Copies of any documents provided by the taxpayer on which he or she relied to determine eligibility for, and the amount of, the credit(s)

C. A record of any additional questions he or she may have asked to determine eligibility for, and amount of, the credits, and the taxpayer’s answers

D. All of the above

Draw a profit or loss graph for a call option contract with an exercise price of $50 for
which a $5 premium is paid. You may assume the underlying asset’s price is as low as
$10 and as high as $80 (in even multiples of $10) and that the option is being evaluated
on its expiration date. Calculate and identify the breakeven point, maximum profits and
maximum losses.

Operating Budget, Comprehensive Analysis

Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow:

The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing:

1. Finished goods inventory on January 1 is 32,000 units, each costing $166.06. The desired ending inventory for each month is 80% of the next month's sales.
2. The data on materials used are as follows:

   Direct Material	Per-Unit Usage		DM Unit Cost ($)
   Metal	10 lbs.		8
   Components	6		5

   Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next month's production needs. This is exactly the amount of material on hand on December 31 of the prior year.
3. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is $14.25.
4. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.)

   	Fixed-Cost   Component ($)		Variable-Cost Component ($)
   Supplies	—		1.00
   Power	—		0.50
   Maintenance	30,000		0.40
   Supervision	16,000		—
   Depreciation	200,000		—
   Taxes	12,000		—
   Other	80,000		0.50

5. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.)

   	Fixed    Costs ($)		Variable Costs ($)
   Salaries	50,000		—
   Commissions	—		2.00
   Depreciation	40,000		—
   Shipping	—		1.00
   Other	20,000		0.60

6. The unit selling price of the subassembly is $205.
7. All sales and purchases are for cash. The cash balance on January 1 equals $400,000. The firm requires a minimum ending balance of $50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January.

Required:

1. Prepare a monthly operating budget for the first quarter with the following schedules. (Note: Assume that there is no change in work-in-process inventories.)

a. Schedule 1: Sales Budget. Do not include a multiplication symbol as part of your answer.

b. Schedule 2: Production Budget.

c. Schedule 3: Direct Materials Purchases Budget. Do not include a multiplication symbol as part of your answer.

d. Schedule 4: Direct Labor Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer.

e. Schedule 5: Overhead Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer.

f. Schedule 6: Selling and Administrative Expenses Budget. If required, round amounts to the nearest cent. Do not include a multiplication symbol as part of your answer.

g. Schedule 7: Ending Finished Goods Inventory Budget. If required, round amounts to the nearest cent.

h. Schedule 8: Cost of Goods Sold Budget.

i. Schedule 9: Budgeted Income Statement. Use a minus sign to indicate a negative amount.

j. Schedule 10: Cash Budget. If an amount is zero, enter "0". Use a minus sign to enter a negative amount.

1）

2）

Jane Smith, age 40, is single and has no dependents. She is employed as a legal secretary by Legal Services, Inc. She owns and operates Typing Services located near the campus of Florida Atlantic University at 1986 Campus Drive. Jane is a material participant in the business. She is a cash basis taxpayer. Jane lives at 2021 Oakcrest Road, Boca Raton, FL 33431. Jane's Social Security number is 123-45-6789. Jane indicates that she wants to designate $3 to the Presidential Election Campaign Fund. Jane had health insurance for all months of 2016. During 2016, Jane had the following income and expense items:

Required:

Compute Jane Smith's 2016 Federal income tax payable (or refund due). Use Form 1040, Schedule A, Schedule C, Schedule D and Form 4684. (Note: There is a separate Form 4684 for each casualty or theft.)

Make realistic assumptions about any missing data.

If an amount box does not require an entry or the answer is zero, enter "0".

Enter all amounts as positive numbers. However, unless instructed otherwise, use the minus sign to indicate a loss.

It may be necessary to complete the tax schedules before completing Form 1040.

When computing the tax liability, do not round your immediate calculations. If required round your final answers to the nearest dollar.

Need Form

Form 1040

Schdule A

Schdule C

Schdule D

FOrm 8949

Form 4684 (1)

Form 4684 (2)