c. At what level of pretax cost savings would you be indifferent between accepting the project and not accepting it?

1. Consider the following two projects both costing $5,000. Assume the prevailing interest rate is 4%.
         Project 1 pays $1,000 for 50 years.
         Project 2 pays $900 forever.
   1. Use Solver to find the interest rate at which an investor would be indifferent between the two projects. Please use an Excel spreadsheet and save the Solver solution. That way, the grader can open the Solver window and check the parameter values you entered into Solver.
      
      (Hint: One way to ensure that the value of the two projects is identical is to create a cell in Excel that is equal to the difference in values of the two projects. Then, choose the option in Solver to set that cell equal to zero. Equivalently, you can add a constraint to Solver that the values of the two projects are equal.)

You are serving on a jury. A plaintiff is suing the city for injuries sustained after a freak street sweeper accident. In the trial, doctors testified that it will be five years before the plaintiff is able to return to work. The jury has already decided in favor of the plaintiff. You are the foreperson of the jury and propose that the jury give the plaintiff an award to cover the following: (a) The present value of two years’ back pay. The plaintiff’s annual salary for the last two years would have been $38,000 and $42,000, respectively. (b) The present value of five years’ future salary. You assume the salary will be $45,000 per year. (c) $150,000 for pain and suffering. (d) $20,000 for court costs. Assume the salary payments are equal amounts paid at the end of each month. Requirement 1: If the interest rate you choose is an EAR of 7 percent, what is the size of the settlement? (Enter your answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Award $ Requirement 2: If you were the plaintiff, would you like to see a higher or lower interest rate?

You are planning your retirement in 10 years. You currently have $120,000 in a bond account and $500,000 in a stock account. You plan to add $5,000 per year at the end of each of the next 10 years to your bond account. The stock account will earn a return of 10.5 percent and the bond account will earn a return of 7 percent. When you retire, you plan to withdraw an equal amount for each of the next 25 years at the end of each year and have nothing left. Additionally, when you retire you will transfer your money to an account that earns 6.25 percent. Required: How much can you withdraw each year in your retirement? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Annual withdrawal amount $

Challenge question I. Michael is shopping for a special automobile. He finds the exact car he​ wants, a 1966 dark blue Pontiac GTO. This car is currently the property of a​ neighbor, so to buy it for the​ agreed-upon price of ​$40,000​, Michael must secure his own financing. He visits four different financial institutions and gets the following available​ loans:

Bank​ 1:  60 monthly payments of ​$782.65

Bank​ 2:  72 monthly payments of ​$667.65

Bank​ 3:  208 weekly payments of ​$219.56  ​(Assume a​ 52-week year.)

Bank​ 4:  12 quarterly payments of $3,667.20

Which loan should Michael​ take?  ​Hint:  Which loan has the lowest​ EAR?

1. If Michael selects Bank 1 for the​ loan, what is the periodic interest rate on the​ loan?

______​% ​(Round to four decimal​ places.)

2. If Michael selects Bank 1 for the​ loan, what is the EAR on the​ loan?

____​% ​(Round to two decimal​ places.)

3. If Michael selects Bank 2 for the​ loan, what is the periodic interest rate on the​ loan?

___​% ​(Round to four decimal​ places.)

4. If Michael selects Bank 2 for the​ loan, what is the EAR on the​ loan?

____​% ​(Round to two decimal​ places.)

5. If Michael selects Bank 3 for the​ loan, what is the periodic interest rate on the​ loan?

___​% ​(Round to four decimal​ places.)

6. If Michael selects Bank 3 for the​ loan, what is the EAR on the​ loan?

___​% ​(Round to two decimal​ places.)

7. If Michael selects Bank 4 for the​ loan, what is the periodic interest rate on the​ loan?

___​% ​(Round to four decimal​ places.)

8. If Michael selects Bank 4 for the​ loan, what is the EAR on the​ loan?

___​% ​(Round to two decimal​ places.)

9. Which loan should Michael​ take?  ​(Choose the best​ response.)

Bank 3

Bank 4

Bank 2

Bank 1

A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a sure rate of 5.6%. The probability distributions of the risky funds are:

The correlation between the fund returns is 0.0600. What is the expected return and standard deviation for the minimum-variance portfolio of the two risky funds? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

D0= $2, rs =13%, the growth rate of dividend, gL= 5%

Estimate the intrinsic stock value, (P_0 ) ̂, and then the Dividend Yield (Yd) and Capital Gain Yield (CGY) from above data

Estimate the expected or intrinsic stock price today, (P_0 ) ̂, if non-constant growth of dividend is 30% for year 0 to year 1, 20% for year 1 to year 2, 10% for year 2 to year 3; the growth rate of dividend is constant, gL= 5% after year 3; D0 = $2; Rs =13%.

*please show work and formulas used

Describe how principles differ from characteristics/qualities of information, and how does this relate to sustainability?

How is actual cause different from proximate and probable cause?

The Course Project requires you to act as consultants for a fast food chain and develop a new food product. Your competitor has just launched a new campaign introducing Junior and Grand sizes to their already famous and successful hamburger and is drawing sales away from your client. Time is of the essence, yet you do not want to over-react and make a costly mistake. You will need to be innovative and capitalize not only on your client’s success, but also focus on how to bring back lost revenue and launch a strong marketing campaign. Your market research and product launch strategy will be described both in a written paper as well as presentation of your recommendations to the class.

1. Complete product/service description, including the type of innovation represented, and the source for the idea.

2. Product/service offering and a description of benefits that customers will both recognize and realize

3. Competitive analysis

"Points awarded for description of the innovation of the new competitive product and how it will compete in the marketplace. Product offering and a description of benefits customers will realize over that of your client’s competitor. In short, how will your new innovative food product increase sales for your client and as well as win back sales from your client’s competitor. Include in this section an identification of competitor products and specific customer benefits. The material in this assignment covers sections 4-6 listed in the outline above."

Explain how materiality and audit procedures to gather evidence are important in planning an audit.

1. If the proper goal of a finance manager is to maximise shareholder wealth how does managing the agency problem contribute to this goal? Discuss whether you believe purely financial incentives are enough to manage the agency problem?     

You would like to speculate on a rise in the price of a certain stock. The current stock price is $40 and a three-month call with a strike price of $42 costs $2.50. You have $5,000 to invest. Identify two alternative strategies. Outline the advantages and disadvantages of each.