Big Sky Mining Company must install $1.5 million of new machinery in its Nevada mine. It can obtain a bank loan for 100% of the purchase price, or it can lease the machinery. Assume that the following facts apply:

1. The machinery falls into the MACRS 3-year class.

2. Under either the lease or the purchase, Big Sky must pay for insurance, property taxes, and maintenance.

3. The firm's tax rate is 25%

4. The loan would have an interest rate of 15%. It would be nonamortizing, with only interest paid at the end of each year for 4 years and the principal repaid at year 4

5. The lease terms call for $400,000 payments at the end of each of the next 4 years.

6. Assume that the company has no use for the machine beyond the expiration of the lease. The machine has an estimated residual value of $250,000 at the end of the 4th year.

a. What is the cost of owning?

b. What is the cost of leasing?

c. What is the NAL of the lease?

A bond issued on February 1, 2004 with face value of $47400 has semiannual coupons of 4.5%, and can be redeemed for par (face value) on February 1, 2021. What is the accrued interest and the market price (the “clean” price) of the bond on November 15, 2006, if the bond’s yield on that date is to be 6.5%? (use actual/actual for accrued interest).

please show steps and formula, Im really lost. I have tried multiple times, and dont understand where i went wrong.

Deep Value, Inc.’s annual stock returns for the last ten years are: –5%, 15%, 11%, 18%, –8%, 9%, 16%, –3%, –2%, and 25%. The Market Index’s annual returns for the same ten years are: 10%, 22%, 9%, 13%, –7%, 8%, 15%, –13%, –12%, and 18%. What is Deep Value’s beta coefficient?

Given the scenario below, what is the best annuity option? Include riders if needed. Support your answer.

Julie has a stable income, and she wants something she can put her money into that is tax advantaged. Julie hates the idea of risk and does not want to lose her money. She is ok with consistent, low returns. She likes USAA best due to her military service. -

Cameron Bly is a sales manager for an automobile dealership. He earns a bonus each year based on revenue from the number of autos sold in the year less related warranty expenses. Actual warranty expenses have varied over the prior 10 years from a low of 3% of an automobile’s selling price to a high of 10%. In the past, Bly has tended to estimate warranty expenses on the high end to be conservative. He must work with the dealership’s accountant at year-end to arrive at the warranty expense accrual for cars sold each year.

Answer each of the following questions:

   1. Does the warranty accrual decision create any ethical dilemma for Bly?

    2. Because warranty expenses vary, what percent do you think Bly should choose for the current year?         Justify your percentage.

    3. What internal controls might be useful in overseeing Bly's recommendation for warranty expense?

The Rivoli Company has no debt outstanding, and its financial position is given by the following data:

The firm is considering selling bonds and simultaneously repurchasing some of its stock. If it moves to a capital structure with 40% debt based on market values, its cost of equity, r_s, will increase to 11% to reflect the increased risk. Bonds can be sold at a cost, r_d, of 6%. Rivoli is a no-growth firm. Hence, all its earnings are paid out as dividends. Earnings are expected to be constant over time.

1. What effect would this use of leverage have on the value of the firm?
   I. Increasing the financial leverage by adding debt results in a decrease in the firm's value.
   II. Increasing the financial leverage by adding debt has no effect on the firm's value.
   III. Increasing the financial leverage by adding debt results in an increase in the firm's value.
   -Select-IIIIIIItem 1
   
2. What would be the price of Rivoli's stock? Do not round intermediate calculations. Round your answer to the nearest cent.
   $   per share
   
3. What happens to the firm's earnings per share after the recapitalization? Do not round intermediate calculations. Round your answer to the nearest cent.
   The firm -Select-increaseddecreasedItem 3 its EPS by $   .
   
4. The $500,000 EBIT given previously is actually the expected value from the following probability distribution:

   Probability	EBIT
   0.10	($ 110,000)
   0.20	150,000
   0.40	350,000
   0.20	950,000
   0.10	1,510,000

   
   Determine the times-interest-earned ratio for each probability. Use a minus sign to enter negative values, if any. Do not round intermediate calculations. Round your answers to two decimal places.

   Probability	TIE
   0.10
   0.20
   0.40
   0.20
   0.10

   
   What is the probability of not covering the interest payment at the 40% debt level? Do not round intermediate calculations. Round your answer to two decimal places.
   
     %

Fiddler Foundations has a tax rate of 40% and their stock has a beta of 1.2. The company has a capital structure of 45% debt and 55% common equity. Calculate the company's unlevered beta Calculate the company's levered beta if they changed their capital structure ton 40% debt and 60% common equity.

1- Describe the evolution of business continuity management and its alignment with risk management.

2-Explain how risk mitigation is achieved through business continuity planning.

Option #1: NFP financial reporting

The Four Corners Theater’s mission is to increase access to the arts for the community of Four Corners. The Theater group owns a debt-financed theater and puts on several plays throughout the year, as well as providing facilities for many other activities. Four Corner’s Theater is a well-established, not-for profit organization exempt under IRC Sec. 501(c)(3).

Identify whether the following activities would be subject to unrelated business income tax (UBIT) and explain why or why not.

1. Rental of the facility to the high school drama club.
2. Fees for summer acting classes for primary school students.
3. Sale of tickets to plays put on by the Four Corner’s Theater group.
4. Sale of season ticket membership list to a local book store.
5. Rental of two apartments in the facility.
6. Rental of meeting space to other local 501(c)(3) organizations for their monthly meetings.
7. Internet sales of gift shop items with the Four Corner’s Theater logo.
8. Lease of the facility’s parking lot to the local university on football game days.

What is the critical marketing strategies that Waterbury should use in order to highlight its strengths and grow patent volume?

Johnson Industries finances its projects with 40 percent debt, 10 percent preferred stock, and 50 percent common stock.

• The company can issue bonds at a yield to maturity of 10% percent.
• The cost of preferred stock is 12 percent.
• The company's common stock currently sells for $40 a share.
• The company's dividend is currently $1.50 a share (D₀ = $1.50), and is expected to grow at a constant rate of 8 percent per year.
• Assume that the flotation cost on debt and preferred stock is zero, and no new stock will be issued.
• The company’s tax rate is 25 percent.

What is the company’s weighted average cost of capital (WACC)? Show work.

Mr. Sam Golff desires to invest a portion of his assets in rental property. He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village. After conferring with the present owners, Mr. Golff has developed the following estimates of the cash flows for these properties.

Palmer Heights Yearly Aftertax Cash Inflow (in thousands)

Probability $ 80 0.2

85 0.2

100 0.2 1

15 0.2

120 0.2

Crenshaw Village Yearly Aftertax Cash Inflow (in thousands)

Probability $ 85 0.2

90 0.3

100 0.4

110 0.1

c. Which apartment complex has more risk?

b. What is the coefficient of variation for each apartment complex?

a. Find the expected cash flow from each apartment complex. (Enter your answers in thousands (e.g, $10,000 should be enter as