You are considering a proposal to produce and market a new sluffing machine. The most likely outcomes for the project are as follows:

Expected sales: 100,000 units per year

Unit price: $190

Variable cost: $114

Fixed cost: $4,080,000

The project will last for 10 years and requires an initial investment of $11.28 million, which will be depreciated straight-line over the project life to a final value of zero. The firm’s tax rate is 30%, and the required rate of return is 12%.

However, you recognize that some of these estimates are subject to error. Sales could fall 30% below expectations for the life of the project and, if that happens, the unit price would probably be only $180. The good news is that fixed costs could be as low as $2,720,000, and variable costs would decline in proportion to sales.

a. What is project NPV if all variables are as expected?

b. What is NPV in the worst-case scenario?

On May 6, 2013, the treasurer of a corporation enters into a long forward contract to buy £1 million in six months at an exchange rate of 1.5532

This obligates the corporation to pay $1,553,200 for £1 million on November 6, 2013

What are the possible outcomes?

Question1

With which of the following statements would most people in business agree? Rationalize your response

1. The short-run profits of a corporation will almost always increase if the firm takes actions the government has determined are in the nation's best interests.
2. Government agencies and firms almost always agree with one another regarding the restrictions that should be placed on hiring and firing employees.
3. Although people's moral characters are probably developed before, they get into a business school, it is still useful for business schools to cover ethics, including giving students an idea about the adverse consequences of unethical behavior to themselves, their firms, and the nation.
4. Developing a formal set of rules defining ethical and unethical behavior is not useful for a large corporation. Such rules generally can't be applied in many specific instances, so it is better to deal with ethical issues on a case-by-case basis.
5. Because of the courage it takes to blow the whistle, “whistle blowers’ are generally promoted more rapidly than other employees.

You wish to purchase a 15-year deferred annuity (payments start now) that will last 20 years and generate $3000 per month for those 20 years while growing in value at 3% during the 20-year payout period. Assuming the discount rate for all cash flows is 7%

What is the price you should pay for this 15-year deferred, 3% growing 20-year annuity? in creating your answer, place a spinner on all key rates (growth and discount)

What is the price (p) and duration (d) of a 6% coupon bond maturing in 20 years and paying interst annually if the current interest rate is 9%?

Select one:

A) p= 311.80, d= 9.18

B) p= 726.14, d= 10.77

C) p= 726.14, d= 11.55

D) p= 1,344.10, d= 12.43

Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelley Couts, who inherited the company. Over the years, the company expanded into manufacturing and is now a reputable manufacturer of various electronic items. One of the major revenue-producing items manufactured by Conch Republic is a Personal Digital Assistant (PDA). Conch Republic currently has PDA model on the market and sales have been excellent. The PDA is a unique item in that it comes in a variety of tropical colors ad is preprogrammed to play Jimmy Buffett music. However as with any electronic item, technology changes rapidly, and the current PDA has limited features in comparison with newer models. Conch republic spent $750,000 to develop a prototype for a new PDA that has all the features of the existing one, but adds new features such as cell phone capability. The company has spent a further $200,000 for a marketing study to determine the expected sales figures for the new PDA. Conch republic can manufacture the new PDA for $220 each in variable costs. Fixed costs for the operation are estimated to run $6.4 million per year. The estimated sales volume is 155,000, 165,000, 125,000, 95,000, and 75,000 per year for the next five years, respectively. The unit price of the new PDA will be $535. The necessary equipment can be purchased for $43.5 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $4.3 million. Net working capital for the PDAs will be 20% of sales and will occur with the timing of the cash flows for the year (i.e., there is no initial outlay for NWC). Changes in NWC will thus first occur in Year 1 with the first year's sales. Conch Republic has a 21% corporate tax rate and a 12% required return. Shelly has asked Jay to prepare a report that answers the following questions. Answer the questions below and make sure to show all work that led up to your answer. Include Excel Spreadsheet. 1. What is the payback period of the project? 2. What is the profitability index of the project? 3. What is the IRR of the project? 4. What is the NPV of the project 5. How sensitive is the NPV to changes in the price of the new smartphone? 6.How sensitive is the NPV to changes in the quantity sold of the new phone?

Show work and explain how you got your answer, do not just post an excel spreadsheet with answers please.

You are deciding between two mutually exclusive investment opportunities. Both require the same initial investment of

$ 10.3

million. Investment A will generate

$ 2.18

million per year​ (starting at the end of the first​ year) in perpetuity. Investment B will generate

$ 1.51

million at the end of the first​ year, and its revenues will grow at

2.2 %

per year for every year after that.

a. Which investment has the higher​ IRR?

b. Which investment has the higher NPV when the cost of capital is

7.8 %

​?

c. In this​ case, for what values of the cost of capital does picking the higher IRR give the correct answer as to which investment is the best​ opportunity?

Sara purchased 50 shares of Apple stock at $190.97 per share using the prevailing minimum initial margin requirement of 55%.

She held the stock for exactly 4 months and sold it without any brokerage costs at the end of that period. During the 4​-month holding​ period, the stock paid $1.49 per share in cash dividends.

Sara was charged 4.8% annual interest on the margin loan. The minimum maintenance margin was 25%.

a. Calculate the initial value of the​ transaction, the debit balance​, and the equity position on​ Sara's transaction. Round to the nearest cent

b. For each of the following share​ prices, calculate the actual margin​ percentage, and indicate whether​ Sara's margin account would have excess​ equity, would be​ restricted, or would be subject to a margin​ call: ​(1)$174.81​, (2)$206.54​,and​(3)$122.35. Round to the nearest .001%

c. Calculate the dollar amount of​ (1) dividends received and​(2) interest paid on the margin loan during the 4​-month holding period. Round to the nearest cent

d. Use each of the following sale prices at the end of the 4​-month holding period to calculate​ Sara's annualized rate of return on the Apple stock​ transaction: (1)$185.83​, (2) $195.99​, and​ (3)$205.89. Round to the nearest .001%

Using your mortgage schedule spreadsheet, enter the following data: Cost of Home: $225,000 Down Payment: $15,000 Annual Interest Rate: 6.960% Number of Years: 25 In addition, enter $400 as an additional principal payment for month 36 and $100 as an additional principal payment for month 75. Copy the monthly closing balance from month 52 into this question's response box AFTER you ensure that it is formatted using accounting formatting and 2 decimal places.

Use the financial statements below for problems 4 to 7

                              Balance Sheet

4.   Construct a common size balance sheets for 2017 and 2018. Comment on any changes in the percentages of assets and liabilities.

5.   Construct a common size income statement 2017 and 2018. Comment on any of the changes in the composition of the income statement.

As director of capital budgeting, you are reviewing three potential investment projects with the following cost and cash flow projections.

1.Calculate the Payback Period for each project.

2.If the discount rate for all three projects is 10.5%, calculate the Net Present Value for each project.