Actual and adjusted prices of a stock on January 15 were $45.75 and $12.4578, respectively. On February 22, the stock had a 3-for-1 split. On March 10, the stock paid a dividend of $0.75 per share. On April 15, the actual and adjusted prices of the stock were $20.45 and $17.3217. What was the return on the stock between January 15 and April 15?

а. - 53.66%

b. 34.10%

c. 35.74%

d. 39.04%

You invested $25,000 in a mutual fund 3 years ago. The mutual fund paid dividends of $800, $875 and $975 at the end of years 1, 2 and 3. After the third dividend you cashed your investment for $29,000. What was your annual rate of return on this investment?

a. 8.42%

b. 8.87%

c. 16.00%

d. 26.60%

3. A stock provided a return of 3 percent in the first quarter, 15 percent in the second quarter, −10 percent in the third quarter and 5 percent in the fourth quarter. The return over the year from this stock was
a. 13%   b.11.94% c. -23% d.- 0.23%

If the effective annual rate of return is 16 percent per year, the equivalent quarterly rate of return is
a. less than 4 percent
b. equal to 4 percent
c. more than 4 percent
d. 16 percent

Etonic Inc. is considering an investment of $382,000 in an asset with an economic life of 5 years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be $262,000 and $87,000, respectively. Both revenues and expenses will grow thereafter at the annual inflation rate of 2 percent. Etonic will use the straight-line method to depreciate its asset to zero over five years. The salvage value of the asset is estimated to be $62,000 in nominal terms at that time. The one-time net working capital investment of $18,500 is required immediately and will be recovered at the end of the project. All corporate cash flows are subject to a 34 percent tax rate.

1. On June 4 2015, the existing or current (spot) one year , two year, three year, and four year zero coupon treasury security rates were as follows: 1R1= 0.156%, 1R2=0.305%, 1R3=0.499%, 1R4=0.753% Using the unbiased expectations theory, calculate the one year forward rates on zero coupon treasury bonds for years 2, 3, and 4 as of June 4 2015.

Harry’s Carryout Stores has eight locations. The firm wishes to expand by two more stores and needs a bank loan to do this. Mr. Wilson, the banker, will finance construction if the firm can present an acceptable three-month financial plan for January through March. The following are actual and forecast sales figures:

Of the firm’s sales, 40 percent are for cash and the remaining 60 percent are on credit. Of credit sales, 50 percent are paid in the month after sale and 50 percent are paid in the second month after the sale. Materials cost 40 percent of sales and are purchased and received each month in an amount sufficient to cover the following month’s expected sales. Materials are paid for in the month after they are received. Labor expense is 30 percent of sales and is paid for in the month of sales. Selling and administrative expense is 15 percent of sales and is paid in the month of sales. Overhead expense is $21,000 in cash per month.

Depreciation expense is $10,400 per month. Taxes of $8,400 will be paid in January, and dividends of $4,000 will be paid in March. Cash at the beginning of January is $88,000, and the minimum desired cash balance is $83,000.

A. Prepare a schedule of monthly cash payments for January, February, and March.

B. Prepare a monthly cash budget with borrowings and repayments for January, February, and March. (Negative amounts should be indicated by a minus sign. Assume the January beginning loan balance is $0.)

1. You are saving for retirement. Starting this month, you will deposit $600 per month into a stock account that earns 9% interest. In ten years, you will begin depositing an additional $350 per month into a bond account that earns 6% interest. You expect interest rates to shift upwards 1.5% 20 years from now. This means, at that point, each of the accounts listed above will earn interest 1.5% higher than before. How much will you have when you retire if you plan to retire in 37 years?

35. Discuss "Corporate Intelligence" and "Corporate Espionage".

Consider a $12,000 loan with 4 equal annual payments and 10% interest.

a. Calculate the annual payment, n = 4, r = 0.10.

b. Prepare a complete loan payment schedule table for this loan. You need the time period, the beginning principal, payment, interest paid, principal paid, and ending principal in your table.

c. Now assume that the loan is fully amortized over 4 years, however, the interest rate is variable. That is, the bank changes a different rate each year as money market conditions change. Assume the rates turn out to be:

Year 1 ‐ 10%

Year 2 ‐ 12%

Year 3 ‐ 14%

Year 4 ‐ 10%

Compute what each year's interest and principal would be under the above scenario. To do this you will need to amortize the principal left at the beginning of each year over the remaining years of the loan at the new interest rate. This will give you the payment. Then you can calculate the interest paid and the principal paid each year.

Bruno's Lunch counter is expanding and expects operating cash flows of $20,500 a year for 5 years as a result. This expansion requires $54,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $4,800 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 13 percent?

Consider the differences between payback period and the accounting rate of return.

Explain why one provides a more accurate analysis of an investment decision than the other.

CONDENCED STATEMENT OF CASH FLOW

FOR THE YEAR ENDED DECEMBER 31 (IN THOUSANDS)  

2011

Cash flows from operating activities  

Cash receipts from operating activities  

$12,000

   Cash payments for operating activites  

10,000

Net cash provided by operating activities   3,000

Cash flows from investing activities  

Purchases of property, plant, and equipment   (500)

Other investing activities  

(130)

Net cash used in investing activities  

(630)

Cash flows from financing activities  

Issuance of common stock  

160

Issuance of debt  

2,179

Reductions of debt  

-2,01

Payment of dividends  

-475

Repurchase of common stock and other items   -645

Net cash provided (used) by financing activities   -792

Increase (decrease) in cash and cash equivalents   1,578

Cash and cash equivalents at beginnign of year   411

Cash and cash equivalents at end of year  

$1,989

Additional information  

2011

Average number of shares (thousands)  

500

Stock price atr year-end  

$60.00

1. Compute the following from the spreadsheet. I need the numerical answer, a brief discussion of what the ratio means and if the company is in a position of strength or weakness (to the best you can without having a company to compare)

Current ratio

Quick Ratio

Debt to Asset

Debt to Equity

ROA (for year 2011)

ROE (for year 2011)

Inventory Turnover

EPS

P/E

A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 8.7%, and sells for $1,130. Interest is paid annually. (Assume a face value of $1,000 and annual coupon payments.)

a. If the bond has a yield to maturity of 9.3% 1 year from now, what will its price be at that time? (Do not round intermediate calculations. Round your answer to nearest whole number.)

b. What will be the rate of return on the bond? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.)

c. If the inflation rate during the year is 3%, what is the real rate of return on the bond? (Assume annual interest payments.) (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Negative amount should be indicated by a minus sign.)

• Explain why $100 received today is not the same as $100 received next year. What is the meaning of the time value of money.
• What is the purpose of learning the mathematics behind the time value of money?
• What are the factors that affect the overall level of interest rates?

Set up an amortization schedule that amortizes $500,000 with 5 years of cyclical quarterly payments. The annual interest rate is 6%. The payment schedule is: " one-third a normal payment" at the end of quarter 1, "normal payments" at the end of quarters 2 and 3, and "50% of a normal payment" at the end of quarter 4.

please solve in excel and list equations that go in the cells. Thank you :)

Oscar’s Corp. is considering starting a new business involving bicycle production. This new business involves purchases of $8 million of new equipment. This new business is anticipated to generate net income of $1.45 million per year for 6 years. The company uses straight-line depreciation to zero salvage value for tax purposes. Assuming a 28 percent tax rate calculate the project's IRR.