Complete the following table. Given the premium, strike price and futures price, is the futures contract in or out of the money? How much is the intrinsic value? How much is the time value? Please show your work.

How would you use financial management to support innovation?  

What are some of the obstacles to innovation that you have encountered? How do you propose to resolve these challenges?

our boss believes the company's power plant is producing too much air pollution on a typical island. Your boss gives you three choices for dealing with this problem because he/she does not want to deal with it:

1. You can pay a pollution tax (Carbon Offsets) one time of $13,000,000 immediately.  
2. You can close the plant and install a power cable from the mainland to the Island. That will cost you $1,000,000 at the end of this year, $3,000,000 at the end of next year and then $750,000 forever for maintenance.  
3. You can retrofit the plant with scrubbers to reduce the emissions to make the plant green. That will cost $7.5m at the end of this year and $100,000 for 50-years for maintenance.  

   Assume that the cost of generating power on the mainland is approximately the same as the cost of generating power at the Island's plant. Assume, this comes as a surprise to you and you, have not saved any money in reserves, and you need to raise capital. Additional information is that market has a 12 percent market risk premium on the power plant with the risk-free rate being 5 percent with a company tax rate of 35 percent.  

   Current total raised capital at the power plant:  (This will help you calculate the WACC)

4. Debt – 7,000 outstanding bonds, at 7.5% coupon and 20 years to maturity. These bonds pay interest semiannually and quoted a price of 108 percent of par.  
5. Common Stock -180,000 shares outstanding, selling for $50 per share: Beta .90.
6. Preferred Stock – 8,000 shares of 5.5 percent preferred stock outstanding, currently selling for $95.00 per share.

Please answer in essay format and provide your Excel document showing all your calculation in appendixes choose the best option for Island. Support your answer with your calculations

From 1999 to 2017, the average IPO rose by 19.2% in its first day of trading. In 2000, 115 deals doubled in price on the first day. What factors might contribute to the huge 1st-day returns on IPOs? Some critics of the current IPO system claim that underwriters may knowingly underprice an issue. Why might they do this? Why might issuing companies accept lower IPO prices? What impact do institutional investors have on IPO pricing?

Rico works for Street Tacos Inc. The basis for Rico’s contribution under the Federal Insurance Contribution Act to help pay for benefits that will partially make up for his loss of income on retirement is

Equipment Company holds a lien on Fertile Farm’s equipment. The equipment can be sold to satisfy the debt

Erin indicates that she is acting as an agent on behalf of an unidentified client—Flight Services Inc.—when she enters into a contract with Go Airlines. Liability to Go for nonperformance of the contract may be imposed on

Investment Corporation wants to monitor business communications on phones that the employer provides to the employees. The employer’s best course of action to avoid liability under laws related to employee monitoring is to inform

Ben manages a warehouse and its inventory for Coffee Roaster Inc. To operate this part of the business, Ben’s authority can be inferred

Here are five easy rules for creating a simple cash flow plan:

Project monthly sales (and curb your optimism).

Remember receivables

Consolidate predictable.

Adjust for growth

Plan for the unforeseen

Successful long and short term financial planning, including cash flow planning, for corporations is very important. Apply the five easy rules and long and short term financial planning, including cash flow planning to personal financial planning. How can you utilize the above to improve your personal financial health?

NEW PROJECT ANALYSIS

You must evaluate a proposal to buy a new milling machine. The base price is $112,000, and shipping and installation costs would add another $10,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $72,800. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $3,000 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $38,000 per year. The marginal tax rate is 35%, and the WACC is 10%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine.

1. How should the $5,000 spent last year be handled?
   1. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay.
   2. Last year's expenditure is considered as an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   3. Last year's expenditure is considered as a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   4. The cost of research is an incremental cash flow and should be included in the analysis.
   5. Only the tax effect of the research expenses should be included in the analysis.

b. What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent.
$

c. What are the project's annual cash flows during Years 1, 2, and 3? Round your answer to the nearest cent. Do not round your intermediate calculations.

Year 1 $

Year 2 $

Year 3 $

d. Should the machine be purchased?

How are cash flows for a project estimated?

NEW PROJECT ANALYSIS

You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $260,000, and it would cost another $39,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $91,000. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The equipment would require a $6,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $46,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%.

1. What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent. Negative amount should be indicated by a minus sign.
   $

2. What are the project's annual cash flows in Years 1, 2, and 3? Round your answers to the nearest cent.

   In Year 1 $

   In Year 2 $

   In Year 3 $

3. If the WACC is 10%, should the spectrometer be purchased?

Financial statement of McPre Ltd. at the end of financial year 2018-2019 has the following information:-

Sales of $955000 cost of goods sold of $642000 selling expenses of $12000 administrative expenses of $6000, depreciation expenses of $45000 interest expenses of $13,000 and corporate tax rate of 30%.

A) Calculate the gross profit and operating profit (EBIT) of the company.

B) Identify tax payment and not profit of the company.

C) If the current outstanding ordinary shares of the company is 60,000 selling for $12. Each compute the PE ratio of the McPre.

D) Determine the dividend amount if the any can be paid out to shareholders by applying the residual theory.

E) Calculate the dividend payout Ratio.

( gave answer with formula and without excel calculation)

Jospeh is considering to invest in the black stone Ltd. within currently has the following capital structure.

Debt:- $4500000 per value of outstanding bond that pays semi-annually 9% coupon rate with an annual before tax yield to maturity of 10%. The bond issue has face value of $1000 and will mature in 25 years.

Ordinary Shares:- 6500000 book value of outstanding ordinary shares. Nominal value of each share is $100. The firm just paid a $7.50 dividend per share last year and is experiencing a 4% annual growth rate in dividends, which the company expects to continue indefinition.

Preferred share :- 50,000 shares, 15% fixed dividend and market price of $115.39 each share.

The firm marginal tax rate is 30%.

Required: Help Josph to complete the following risk,

A) Calculate the current price of the corporate bond?

B) Calculate the current price of the ordinary share of the average return of the shares in the some industry is 12%.

C) Calculate the rate of return of the preferred share i.e. the face value of preferred share is $100.

D) Calculate the current total market value of firm.

E) Calculate the capital structure of the firm and identify the total weight of the equity trending.

F) Compute the weighted average cost of capital (WACC) under the traditional tax system for the firm, using dividend constant growth model calculation cost of equity of organization.    ( gave answer of full question with formula and without using excel)

9. Bond T is a 3 year, 8% annual coupon bond with a par value of $1000 and current value of $1000. The discount rate is equal to the coupon rate. What is the duration of Bond T?

10. Using the information in #9 and considering an expected rise of interest rates by 1%, calculate the modified duration for Bond T.

13. Daniels Company’s preferred stock is expected to pay a $1.25 dividend at the end of each year. The required rate of return on this stock is 8.5 %. What is the price of Daniels Company’s preferred stock?

From 1997-2006, the returns on Magni were as follows, Using Blume's Formula:

A. What would be the 1-year average forecast?

B. What would be the 2-year average forecast?

C. What would be the 6-year average forecast?

D. What would be the 10-year average forecast?

Examine the growth of passive investing over the past twenty years, particularly in contrast to active investing, and identify possible reasons for this pattern. You should consider researching the size of assets under management, fund flows to active and passive investing, and the relative performance of active and passive investments

Your friend David has just bought a futures contract on a stock index, and the contract specifies one year to expiration. The current share price is $80, and the annually compounded interest rate is 10%. The stock will pay quarterly dividends of $2 during the next year, with dividends payments on the following dates:

• January 25
• April 25
• July 25
• October 25

Assume that this is a non-leap year.

1. What is the futures price on this contract on January 3?