Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30 years from now with retirement income of $23,000 per month for 25 years, with the first payment received 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 15 years at an estimated cost of $499,000. Third, after he passes on at the end of the 25 years of withdrawals, he would like to leave an inheritance of $800,000 to his nephew Frodo. He can afford to save $1,700 per month for the next 15 years.

If he can earn a 9 percent EAR before he retires and a 7 percent EAR after he retires, how much will he have to save each month in Years 16 through 30?

(Please don't link another post, I've repeatedly attempted to solve this problem while looking at another post. I had no luck at all, so I would appreciate an explanation, thank you so much!)

Define and describe the following: 1. Capital Gain/Loss 2. Current Yield (be sure to review the Module Notes) 3. Holding Period Return (be sure to review the Module Notes) 4. Investment Horizon.

Stock A has a current price of $35.00, a beta of 1.05, and a dividend yield of 6.3 percent. If the Treasury bill yield is 5.5 percent and the market portfolio is expected to return 12 percent, what should Stock A sell for at the end of an investor's two year investment horizon?

1. You have decided to retire. You would like to receive equal retirement payments each year for the next 10 years. You want to receive your first retirement payment in one year. You currently have $1,000,000 of savings. You expect to receive another $1,000,000 in 5 years. You can earn 10 percent interest compounded annually on your savings. How large will your annual retirement payment be?

2. What is the Annual Percentage Rate (APR) if the Effective Annual Rate (EAR) is 10% and your money is compounded quarterly?

3. You take out a $100,000 five-year loan with annual payments. You will pay 10% interest compounded annually. How much will your annual payments be? How much total interest will you pay?

4. You want to buy a car in five years and a boat in ten years. Today, the car and boat cost $5,000 and $10,000, respectively. The price of the boat and car will grow by 3% each year. How much money do you need to put away each year (equal payments at the end of the year) for the next three years, to have enough money saved to buy the boat and car? You will receive 10% interest compounded annually.

Please help me with the setup of these problems to solve correctly.

Thanks!

You are bearish on Commodore stock and decide to sell short 100 shares at the current market price of $60 per share. (the stock does not expect dividends so ignore any expected dividend)

a) How much cash must you put into your brokerage account if the initial margin requirement is 50% of the value of the short position?

b) If you are wrong and the stock price increases, at what price would you receive a margin call from your broker if the maintenance margin is 30% of the value of the short position?

Please show all work.

Why does the Fed not use the discount rate to conduct monetary policy? How does the Fed use the discount rate?

One-year Treasury bills currently earn 2.25 percent. You expected that one year from now, 1-year Treasury bill rates will increase to 2.75 percent and that two years from now, 1-year Treasury bill rates will increase to 3.15 percent. If the unbiased expectations theory is correct, what should the current rate be on 3-year Treasury securities? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Kokomochi is considering the launch of an advertising campaign for its latest dessert​ product, the Mini Mochi Munch. Kokomochi plans to spend

$ 5.96

million on​ TV, radio, and print advertising this year for the campaign. The ads are expected to boost sales of the Mini Mochi Munch by

$ 8.78

million this year and

$ 6.78

r. In​ addition, the company expects that new consumers who try the Mini Mochi Munch will be more likely to try​ Kokomochi's other products. As a​ result, sales of other products are expected to rise by

$ 2.55

million each year.

​Kokomochi's gross profit margin for the Mini Mochi Munch is

34 %

and its gross profit margin averages

25 %

for all other products. The​ company's marginal corporate tax rate is

45 %

both this year and next year. What are the incremental earnings associated with the advertising​ campaign?

Note​:

Assume that the company has adequate positive income to take advantage of the tax benefits provided by any net losses associated with this campaign.

You are a manager at Percolated​ Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your​ office, drops a​ consultant's report on your​ desk, and​ complains, "We owe these consultants

$ 1.6$1.6

million for this​ report, and I am not sure their analysis makes sense. Before we spend the

$ 20$20

million on new equipment needed for this​ project, look it over and give me your​ opinion." You open the report and find the following estimates​ (in millions of​ dollars):  ​(Click on the following icon

in order to copy its contents into a​ spreadsheet.)

All of the estimates in the report seem correct. You note that the consultants used​ straight-line depreciation for the new equipment that will be purchased today​ (year 0), which is what the accounting department recommended. The report concludes that because the project will increase earnings by

$ 5.120$5.120

million per year for ten​ years, the project is worth

$ 51.2$51.2

million. You think back to your halcyon days in finance class and realize there is more work to be​ done!  

​First, you note that the consultants have not factored in the fact that the project will require

$ 11$11

million in working capital upfront​ (year 0), which will be fully recovered in year 10.​ Next, you see they have attributed

$ 1.6$1.6

million of​ selling, general and administrative expenses to the​ project, but you know that

$ 0.8$0.8

million of this amount is overhead that will be incurred even if the project is not accepted.​ Finally, you know that accounting earnings are not the right thing to focus​ on!

a. Given the available​ information, what are the free cash flows in years 0 through 10 that should be used to evaluate the proposed​ project?

b. If the cost of capital for this project is

16 %16%​,

what is your estimate of the value of the new​ project?

Garlington Technologies Inc.’s 2018 financial statements are shown here: Balance Sheet as of December 31, 2018 Cash $ 180,000 Accounts payable $ 360,000 Receivables 360,000 Notes payable 156,000 Inventories 720,000 Line of credit 0 Total current assets $1,260,000 Accruals 180,000 Fixed assets 1,440,000 Total current liabilities $ 696,000 Common stock 1,800,000 Retained earnings 204,000 Total assets $2,700,000 Total liabilities and equity $2,700,000 Income Statement for December 31, 2018 Sales $3,600,000 Operating costs 3,279,720 EBIT $ 320,280 Interest 18,280 Pre-tax earnings $ 302,000 Taxes (40%) 120,800 Net income $ 181,200 Dividends $ 108,000

Suppose that in 2019 sales increase by 10% over 2018 sales and that 2019 dividends will increase to $112,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2018. Use an interest rate of 13%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the all-new debt will be in the form of a line of credit.

What is the present value of an annuity that pays $6,500 per year for 9 years with a 11% interest rate with the first payment TODAY.

Dingel Inc. is attempting to evaluate three alternative capital structures - A,B,C. The following table shows the three structures along with relevant cost data. The firm is subject to a 40% tax rate. The risk-free rate is 5.3% and the market return is currently 10.7%

(a) Calculate the after-tax cost of debt for each capital structure

(b) Calculate the cost of preferred stock for each capital structure

(c) Calculate the cost of common stock for each capital structure

(d) Calculcate the weighted average cost of capital (WACC) for each capital structure

(e) compare the WACCs calculated in part (d) and discuss the impact of the firm's financial leverage on its WACC and its related risk

Please include detail of work