Upriver Tours has balance sheet values of: Inventory $70,500; accounts receivable $50,700; accounts payable $58,900; cash $32,300, notes payable $20,000, long-term debt $134,700, and net fixed assets $504,500. What is the current ratio? Do you believe the company can meet its short-term obligations?

Group of answer choices

1.95, yes

0.95, no

2.11, yes

1.98, no

0.98, yes

What differentiates an ordinary investment from a security since we are discussing finance? List all the factors. I'm a newbie on your board and struggling what are the differences. Can you help me understand?

Problem 3-29 Market Value Ratios [LO2]

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Calculate the duration of a 3 year from maturity bond that has a 1.50% annual pay coupon rate and a 6.50% yield. (Use 4 decimal point precision.)

Calculate the duration of a 3 year from maturity bond that has a 5.00% annual pay coupon rate and a 2.50% yield. (Use 4 decimal point precision.)

Individual A just turned 30 years old, have just received your MBA, and have accepted your first job. He must decide how much money to put into its retirement plan. The plan works as follows: Every dollar in the plan earns 7% per year. You cannot make withdrawals until he retires on his sixty-fifth birthday. After that point, individual A can make withdrawals as he sees fit.

Individual A decides that he will plan to live to 100 and work until hi turns 65. He estimates that to live comfortably in retirement, he'll need $100,000 per year starting at the end of the first year of retirement and ending on his one-hundredth birthday.

Individual A will contribute the same amount to the plan at the end of every year that you work.

(a) How much does Individual A need to contribute each year to fund his retirement? The situation above is not very realistic because most retirement plans do not allow you to specify a fixed amount to contribute every year. Instead, you are required to specify a fixed percentage of your salary that you want to contribute. Assume that your starting salary is $75,000 per year and it will grow 2% per year until you retire.

(b) Assuming everything else stays the same as in the previous question, what percentage of his income does he need to contribute to the plan every year to fund the same retirement income?

JPJ Corp has sales of $1.29 million, accounts receivable of $46,000, total assets of $5.17million(of which $3.19 million are fixed assets), inventory of $155,000, and cost of goods sold of $596,000. What are JPJ’s accounts receivable days? Fixed asset turnover? Total asset turnover? Inventory turnover?

What differentiates an ordinary investment from a security

In December 2019, Bob Prescott, the controller for the Blue Ridge Mill, was considering the addition of new on-site long-wood woodyard. The addition would have two primary benefits: to eliminate the need to purchase short-wood from an outside supplier and create the opportunity to sell short-wood on the open market as a new market for Worldwide Paper Company (WPC). The new woodyard would allow the Blue Ridge Mill not only to reduce its operating costs but also to increase its revenues. The proposed woodyard will utilise new technology that allows tree-length logs, called long-wood, to be processed directly, whereas the current process required short-wood, which had to be purchased from the Shenandoah Mill. This nearby mill, owned by a competitor, has excess capacity that allows it to produce more short-wood than it needs for its own pulp production. The excess is sold to several different mills, including the Blue Ridge Mill. Thus, adding the new long-wood equipment would mean that Prescott would no longer need to use the Shenandoah Mill as a short-wood supplier and that the Blue Ridge Mill would instead compete with the Shenandoah Mill by selling on the short-wood market. The question for Prescott was whether these expected benefits were enough to justify the $18m capital outlay plus the incremental investment in working capital over the six-year life of the investment. Construction would start within a few months, and the investment outlay would be spent over two calendar years: $16m in 2020 and the remaining $2m in 2021. When the woodyard begins operating in 2021, it would significantly reduce the operating costs of the mill. These operating savings would come mostly from the difference in the cost of producing short-wood on-site versus buying it on the open market and were estimated to be $2m for 2021 and $3.5m per year thereafter. Prescott also planned on taking advantage of the excess production capacity afforded by the new facility by selling short-wood on the open market as soon as possible. For 2021, he expected to show revenues of approximately $14m, as the facility came on-line and began to break into the new market. He expected shortwood sales to reach $20m in 2022 and continue at the $20m level through 2026. Prescott estimated that the cost of goods sold (before including depreciation expense) would be 75%. In addition to the capital outlay of $18m, the increased revenues would necessitate higher levels of inventories and accounts receivable. Therefore the amount of working capital investment each year would equal 15% of incremental sales for the year. At the end of the life of the equipment, in 2026, all the net working capital on the books would be recoverable at cost fully. Taxes would be paid at a 30% rate, and the equipment depreciation is to be calculated on a straight-line basis over the six-year life to zero balance. However, the new equipment is estimated to have a salvage value (scrap value) of $3m at the end of its life. WPC’s accountants have told Prescott that depreciation charges could not begin until 2021, when all the $18m had been spent and the equipment is in service. WPC has a company policy to use 15% as the hurdle rate for such investment opportunities. The hurdle rate is based on the study of the company’s cost of capital conducted 5 years ago. Page 7 of 7

a. Prepare cash flow statement/s and compute the NPV and IRR of the proposed project. Comment on the feasibility of the project.

b. Outline reasons why Prescott may be uneasy using the 15% hurdle rate for a discount rate.

c. Perform a sensitivity analysis on NPV of the project on the following scenarios: (i) Sales increases/decreases by 10%. (ii) Cost of capital increases/decreases by 10%. Comment on the feasibility of the project under each scenario.

d. The global paper and pulp industry, one of the world largest industries, has been growing slowly, at a rate much less than expected over the last 20 years. The price chart below shows that the Products Industry Index on average grew at around 2.5% per year over the last 20 years, while lumber futures contract prices have negative growth. Some analysts believe that the industry needs more structural change to counter disruption of technology and tackle social impacts due to climate change. Identify and analyse three qualitative risk factors (i.e. factors which are unquantifiable at present) faced by the industry. How would Bob Prescott consider these factors in evaluating the feasibility of the new on-site longwood woodyard?

You are planning on buying $100,000 face value of Australian Commonwealth Government Bonds. The bonds mature on 15 February 2022 and have a coupon rate of 4.75%. If your purchase will settle on 27 April 2012, and the quoted yield for the bond is 3.92%, what is the cash price of the bonds to the nearest dollar?

Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)

Using Rhodes Corporation's financial statements (shown above), answer the following questions.

1. What is the net operating profit after taxes (NOPAT) for 2016? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place.
   $   million
   
2. What are the amounts of net operating working capital for both years? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to one decimal place.
   2016 $   million
   2015 $   million
   
3. What are the amounts of total net operating capital for both years? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to one decimal place.
   2016 $   million
   2015 $   million
   
4. What is the free cash flow for 2016? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to one decimal place.
   $   million
   
5. What is the ROIC for 2016? Round your answer to two decimal places.
   %
   
6. How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answers to one decimal place.

   After-tax interest payment	$   million
   Reduction (increase) in debt	$   million
   Payment of dividends	$   million
   Repurchase (Issue) stock	$   million
   Purchase (Sale) of short-term investments	$   million

Your company has been approached to bid on a contract to sell 5,100 voice recognition (VR) computer keyboards a year for four years. Due to technological improvements, beyond that time they will be outdated and no sales will be possible. The equipment necessary for the production will cost $4.7 million and will be depreciated on a straight-line basis to a zero salvage value. Production will require an investment in net working capital of $104,000 to be returned at the end of the project, and the equipment can be sold for $284,000 at the end of production. Fixed costs are $649,000 per year, and variable costs are $164 per unit. In addition to the contract, you feel your company can sell 10,400, 11,300, 13,400, and 10,700 additional units to companies in other countries over the next four years, respectively, at a price of $355. This price is fixed. The tax rate is 40 percent, and the required return is 10 percent. Additionally, the president of the company will undertake the project only if it has an NPV of $100,000. What bid price should you set for the contract? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Given a 3 percent interest rate, compute the year 6 future value of deposits made in years 1, 2, 3, and 4 of $1,700, $1,900, $1,900, and $2,200, respectively.

3.

Quantitative Problem: Rosnan Industries' 2013 and 2012 balance sheets and income statements are shown below.

Using the financial statements above, what is Rosnan's 2013 market value added (MVA)? Round your answer to the nearest dollar. Do not round intermediate calculations.

Using the financial statements given earlier, what is Rosnan's 2013 economic value added (EVA)? Round your answer to the nearest cent. Do not round intermediate calculations.