Operating Cash Flow The financial staff of Cairn Communications has identified the following information for the first year of the roll-out of its new proposed service: Projected sales $25 million Operating costs (not including depreciation) $9 million Depreciation $4 million Interest expense $4 million The company faces a 30% tax rate. What is the project's operating cash flow for the first year (t = 1)? Write out your answer completely. For example, 2 million should be entered as 2,000,000.

A self-employed worker operates a firewood-splitting service. He purchased a commercial-grade wood splitter for $5800. He used $400 of business capital and financed the balance at 5% per year for 3 years. The estimated values of the splitter for the next 6 years are $2200 after the first year of ownership, decreasing by $400 per year to year 5, after which the resale value remains at $600. Annual operating costs are expected to be $1000 the first year, increasing by 10% each year thereafter. He considers keeping the splitter at least 6 years. If money is worth 7% per year, for how many years should the splitter be retained? (Perform the Economic Minimum Life analysis for at least 12 years.) Spreadsheet solution required with a summary of what is being analyzed.

You want to evaluate three mutual funds using the Jensen measure for performance evaluation. The risk-free return during the sample period is 6%, and the average return on the market portfolio is 18%. The average returns, standard deviations, and betas for the three funds are given below.

The fund with the highest Jensen measure is

Multiple Choice

• Fund A.

• Fund B.

• Fund C.

• Funds A and B (tied for highest).

• Funds A and C (tied for highest).

Assume that an investment security has a mean return of 14% and standard deviation of 6%. What is the probability of making a loss (to the closest percent)?

A.2%; B.10%; C.1%; D.3%; E.5%

Both Bond Bill and Bond Ted have 5.8 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 5 years to maturity, whereas Bond Ted has 25 years to maturity.
a. If interest rates suddenly rise by 2 percent, what is the percentage change in the price of these bonds? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

b. If rates were to suddenly fall by 2 percent instead, what would be the percentage change in the price of these bonds? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.)

Which of the following statements regarding the predictive value of historical returns is true?

A. Historical returns can be useful in predicting the general direction of a market over a long period.

B. Macroeconomic forces can be predicted from past market performance.

C. All of these answers.

D. Systemic risk, which diminishes the predictive value of historic returns, is the risk of company failure.

Question 1

(a) How is Inventory Turnover Ratio calculated ? What might a sharp drop in inventory turnover tell us ?

(b) How do we calculate Days Sales Outstanding (DSO) ? What might a sharp increase in DSO tell us ?

(c) How do we calculate Operating Profit Margin? How might it be a better measurement of profitability than Net Profit Margin ?

(d) How do we calculate Current Ratio? What does it tell us?

The Scientific Store received an invoice for $6710.00 dated July 13, terms 5/10, 2/30,
n/90, for a shipment of skis. Calculate the partial payments made 20 July to reduce the
balance to $4000.00 Round to nearest 100th.

Written please.

You are considering two independent projects that have differing requirements. Project A has a required return of 12 percent compared to Project B's required return of 13.5 percent. Project A costs $75,000 and has cash flows of $21,000, $49,000, and $12,000 for Years 1 to 3, respectively. Project B has an initial cost of $70,000 and cash flows of $15,000, $18,000, and $41,000 for Years 1 to 3, respectively. Based on the NPV, you should:

Suzanne opens an account at a local bank on January 1, 2004 with a deposit of 4000 dollars. On October 1, 2004 she withdraws 1430 dollars. On April 1, 2005 she withdraws 850 dollars. And on April 1, 2007 she deposits 2090 dollars. Find the total present value of these transactions on July 1, 2006, if the account earns interest at a nominal rate of 7.6 percent convertible quarterly.

The solutions I've found on the website have not taken into account the future deposit and are incorrect, any suggestions?

You have just purchased a home and taken out a $ 520000 mortgage. The mortgage has a 30​-year term with monthly payments and an APR​ (with semi-annual​ compounding) of 7.44 %. ​(Note: Be careful not to round any intermediate steps less than six decimal​ places.)

a. How much will you pay in​ interest, and how much will you pay in​ principal, during the first​ year?
b. How much will you pay in​ interest, and how much will you pay in​ principal, during the twentieth year​ (i.e., between 19 and 20 years from​ now)?

The Down Towner is considering a project with a life of 4 years that will require $164,800 for fixed assets and $42,400 for net working capital. The fixed assets will be depreciated using the Year 2018 bonus depreciation method. At the end of the project, the fixed assets can be sold for $37,500 cash and the net working capital will return to its original level. The project is expected to generate annual sales of $195,000 and costs of $117,500. The tax rate is 24 percent and the required rate of return is 13 percent. What is the project's net present value?

Question 1

(a) If Company A has a price per share of $40 and an earnings per share of $10, and Company B has a price per share of $30 and earnings per share of $3,what is the P/E  

multiple of each.Which Company has a higher expected future earnings growth rate and why?

(b) How do we calculate the Times Interest Earned Ratio ? What does it tell us ?

(c) Why might a lender be more focused on liabilities - to- Assets Ratio rather than Debt- to- Equity Ratio ?

rev: 02_05_2014_QC_44397