Baresse Corporation: Income Statements for Year Ending December 31

(Millions of Dollars)

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

1.Construct a common-sized income statement for 2018 and 2019. Comment on any changes you see.

4.

If you buy a call option of Amazon Inc. with an exercise price of $2000 for a premium of $210.

Draw payoff and profit of call option buyer and call option writer at expiration date graphically.

(use a ruler and draw it by hand if it is hard for you to do it on your computer)

You are getting ready to start a new project that will incur some cleanup and shutdown costs when it is completed. The project costs $ 5.39 million up front and is expected to generate $ 1.17 million per year for 10 years and then have some shutdown costs at the end of year 11. Use the MIRR approach to find the maximum shutdown costs you could incur and still meet your cost of capital of 14.9 % on this project. The maximum shutdown costs allowable to still have a positive NPV is ​$ nothing. ​(Round to the nearest​ dollar.)

HopHeart Brewery is considering 3 different bottling machines. It is expected that each machine will be replaceable at the same cost when their useful life ends. The details of the machines are as follows: Machine X has a useful life of 6 years. It costs $10,000 to purchase and $2,000 per year to maintain. Machine Y has a useful life of 12 years. It costs $15,000 to purchase, and $1,000 per year to maintain. Machine Z has a useful life of 8 years. It costs $20,000 to purchase, and $200 per year to maintain.

a. What is the appropriate planning horizon for analyzing these choices?

b) Using the planning horizon from part a, analyze the present worth of the cost of each alternative if HopHeart has a MARR of 9.8%/year.

Machine X _____________

Machine Y _____________

Machine Z _____________

LONG-TERM FINANCING NEEDED At year-end 2016, total assets for Arrington Inc. were $1.8 million and accounts payable were $445,000. Sales, which in 2016 were $3 million, are expected to increase by 30% in 2017. Total assets and accounts payable are proportional to sales, and that relationship will be maintained; that is, they will grow at the same rate as sales. Arrington typically uses no current liabilities other than accounts payable. Common stock amounted to $455,000 in 2016, and retained earnings were $260,000. Arrington plans to sell new common stock in the amount of $60,000. The firm's profit margin on sales is 7%; 65% of earnings will be retained. What were Arrington's total liabilities in 2016? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Round your answer to the nearest cent. $ How much new long-term debt financing will be needed in 2017? Write out your answer completely. For example, 25 million should be entered as 25,000,000. Do not round your intermediate calculations. Round your answer to the nearest cent. (Hint: AFN - New stock = New long-term debt.) $

what does an increase or decrease in the following ratios have on the value of a firm:

1. Cost of goods sold to sales

2. SGA to Sales

3.Gross Profit Margin

4. Asset Turnover

5. Days Sales Outstanding

6.Days sales of Inventory

7. Days Payable Outstanding

8. Inventory Turnover

9.Current Ratio

An asset has an average historical rate of return of 12.1 percent and a variance of 0.01089091. What is the upper percentage range of returns would you expect to see approximately two-thirds of the time? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

A floating (strike) European lookback call and a floating (strike) European lookback put, on a nondividend paying stock, both expire at date T. At date t<=T, the underlying stock price approaches zero. [a] Please deduce the lookback call price at t, c(t). Please justify your reasoning without using complex formulas. [b] Please deduce the lookback put price at t, p(t). Please justify your reasoning without using complex formulas.

Balance Sheets of December 31, 2016 and 2017 and Income Statement for the Year Ended December 31, 2017 are given below. Please complete columns Dollar Change, Source or Use Increase/Decrease, Major Source/Major Use, and Cash Flow Activity to prove Increase or decrease in Cash. Compute Short-term Solvency/Liquidity for both years to answer whether Corbett Enterprises’ liquidity has improved or declined. Also, compute Long-term Solvency, Asset Utilization, and Profitability ratios for 2017 since only the 2017 income Statement is given.

Choose the alternative the best answers the question.


6. Consider the following two Treasury securities:

Bond Price Modified duration (years) A $100 6 B $ 80 7 Which bond will have the greater dollar price volatility for a 25-basis-point change in interest rates? a. Bond A b. Bond B

7. The breaking down of a system to gain insight into its compositional sub-systems is known as: a. Top down approach b. Bottom-up approach c. Quantitative approach

8. Being a senior secured debt holder in an investment grade corporation assures the investor that she will incur no loss on a credit default. a. True b. False


Calculate the requested measures in questions 10 through 12 for bonds A and B (assume that each bond pays interest semiannually):

   Bond A Bond B Coupon   8% 9% Yield to maturity 8% 8% Maturity (years)     2      5 Par   $100.00 $100.00 Price   $100.00 $104.055

9. What is the price value of a basis point for bond B only? a. 0.0181 b. 0.0416 c. 0.0597 d. 0.0746

10. Compute the approximate duration for bond A only using the shortcut formula by changing yields by 20 basis points a. 1.814948 b. 2.465732 c. 4.277338 d. 8.344402
11. Compute the approximate duration for bond B only using the shortcut formula by changing yields by 20 basis points a. 1.814948 b. 2.465732 c. 4.277338 d. 3.994507

12. Compute the approximate convexity measure for bond A only using the shortcut formula by changing yields by 20 basis points a. 1.814948 b. 2.465732 c. 4.277348 d. 3.994507

13. Compute the approximate convexity measure for bond B only using the shortcut formula by changing yields by 20 basis points a. 1.814948 b. 19.763824 c. 4.277348 d. 3.994507

14. Which U.S. Treasury securities do not make a coupon payment? a. Treasury Bonds b. Treasury Notes c. Treasury Bills d. All of the above

15. The most recently auctioned issue of treasury securities is called: a. On-the-run issue b. Off-the-run issue c. STRIPS issue d. Spot issue

16. Treasury securities are priced based on: a. The yield curve b. The theoretical spot rates c. The par coupon curve

17. Investment grade bond issues that were later downgraded to non-investment grade (junk) bonds are commonly known as: a. Dark angels b. Fallen angels c. Junk hybrids d. Bankruptcy candidates

18. Deferred coupon bonds that give the issuer the option to make a coupon payment with cash or with a similar bond is known as: a. Step-up bonds b. Deferred-interest bonds c. Payment-in-kind bonds

19. Which statement below is NOT correct? a. Eurobonds can be issued in various currencies b. Eurobonds are typically less liquid than Yankee bonds c. Eurobonds pay semi-annual coupons d. Eurobonds typically have weaker covenants than U.S. domestic bonds

20. Which bond warrant entitles the warrant owner to buy additional bonds from the issuer at the same price and yield? a. Equity warrant b. Debt warrant c. Currency warrant

21. A bond that is issued simultaneously in several bond markets throughout the world and can be issued in any currency is: a. Global bond b. Euro medium-term note c. Convertible bond d. Yankee bond

Q1. Firoz Corp. obtained a trade name in January 2010, incurring legal costs of SAR15,000. The company amortizes the trade name over 8 years. Moon successfully defended its trade name in January 2011, incurring SAR 4,900 in legal fees. At the beginning of 2012, based on new marketing research, Moon determines that the recoverable amount of the trade name is SAR 12,000.

            Prepare the necessary journal entries for the years ending December 31, 2010, 2011, and 2012.

Bond X is noncallable and has 20 years to maturity, a 10% annual coupon, and a $1,000 par value. Your required return on Bond X is 11%; if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5 years, the yield to maturity on a 15-year bond with similar risk will be 9.5%. How much should you be willing to pay for Bond X today? (Hint: You will need to know how much the bond will be worth at the end of 5 years.) Do not round intermediate calculations. Round your answer to the nearest cent.

A company declared a $0.80 per share cash dividend. The company has 100,000 shares authorized, 45,000 shares issued, and 42,000 shares of common stock outstanding. What is the journal entry to record the dividend declaration?

Debit Dividends and credit Dividends Payable for $36,000

Debit Dividends and credit Dividends Payable for $33,600

Debit Dividends Payable and credit Cash for $36,000

Debit Dividends Payable and credit Cash for $80,000

The Retained Earnings balance was $22,900 on January 1. Net income for the year was $18,100. If Retained Earnings had a credit balance of $23,800 after closing entries were made for the year, and if additional stock of $5,200 was issued during the year, what was the amount of dividends declared during the year?

$17,200

$23,700

$23,300

$13,000

A company reported net income of $6 million. During the year the average number of common shares outstanding was 3 million. The price of a share of common stock at the end of the year was $5. There were 400,000 shares of preferred stock outstanding on average and no dividends were declared and the preferred stock is noncumulative.

Use the information above to answer the following question. The EPS is approximately:

$0.40.

$1.76.

$1.86.

$2.00.

Use the information above to answer the following question. The Price/Earnings ratio is approximately:

2.00.

2.50.

2.84.

12.50.

1. Please read the article on "HOW DO CFOS MAKE CAPITAL BUDGETING AND CAPITAL STRUCTURE DECISIONS?" and explain the most popular Capital Budgeting Technique.

should High Frequency trading be more regulated or not and explain why it should or shouldn't be more regulated ?