The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company’s present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives:

At the end of three years, the fleet could be sold for one-half of the original purchase price.

Riteway Ad Agency’s required rate of return is 20%.

Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables.

Required:    

1. What is the net present value of the cash flows associated with the purchase alternative?

2. What is the net present value of the cash flows associated with the lease alternative?

3. Which alternative should the company accept?

If the selling price was only $4.85 per bu., what per acre yield would be necessary to break-even?

given this information

1. Expected yield 35.0 bu.per acre2. Selling price $ 5.25 per bu.3. Labor cost -preharvest $ 9.80 per acre4. Land rent $47.50 per acre5. Fertilizer cost $26.50 per acre6. Seed cost $25.00 per acre7. Chemical cost $ 12.75 per acre
C. OTHER INFORMATION(CONT.)8. Tractor variable cost $13.20 per acre9. Variable cost on othermach. & equip. $ 5.65 per acre10. Custom harvesting, hauling, etc. $25.00 per acre11. Compute interest on totalpreharvestcosts @ 6% for 6 months

Please, summary about BASEL1, BASEL2, BASEL2.5 and BASEL3.

I don't know well these accord each. So please give me some kind explanation about each BASEL.

The Riteway Ad Agency provides cars for its sales staff. In the past, the company has always purchased its cars from a dealer and then sold the cars after three years of use. The company’s present fleet of cars is three years old and will be sold very shortly. To provide a replacement fleet, the company is considering two alternatives: Purchase alternative: The company can purchase the cars, as in the past, and sell the cars after three years of use. Ten cars will be needed, which can be purchased at a discounted price of $26,000 each. If this alternative is accepted, the following costs will be incurred on the fleet as a whole: Annual cost of servicing, taxes, and licensing $ 4,200 Repairs, first year $ 2,100 Repairs, second year $ 4,600 Repairs, third year $ 6,600 At the end of three years, the fleet could be sold for one-half of the original purchase price. Lease alternative: The company can lease the cars under a three-year lease contract. The lease cost would be $61,000 per year (the first payment due at the end of Year 1). As part of this lease cost, the owner would provide all servicing and repairs, license the cars, and pay all the taxes. Riteway would be required to make a $10,500 security deposit at the beginning of the lease period, which would be refunded when the cars were returned to the owner at the end of the lease contract. Riteway Ad Agency’s required rate of return is 20%. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: 1. What is the net present value of the cash flows associated with the purchase alternative? 2. What is the net present value of the cash flows associated with the lease alternative? 3. Which alternative should the company accept?

What is the clean price (invoice price) for a bond with face value of $1,000, annual coupon rate of 12%, semiannual payment, time to maturity of 17 years if the YTM is 14%? 12%? 10%? Respectively? What is the current yield for each of the three cases? If the last coupon is paid 60 days ago, what is the dirty price for each of three cases? (Assume 365 days a year)

The recent trade war has hit the Huaway company severely. Management announced plans to scale down its operation. Huaway announced that next year's dividend will be $1 per share which is expected to decrease at the rate of 6% forever.

The market price of the stock fell to $3.5 when this development was disclosed.

i) calculate the expected return investors hope to get from investing the stock based on the constant dividend growth market.

ii) explain 1 limitation of the constant dividend growth market

iii) Briefly discuss 2 reasons for investing in ordinary shares of a company compared to the company's

a) preferred shares

b) bond

3/ Explain why investors might be interested to purchase, "your newly created debt instrument" 34pts

The following financial statement is by ABC Pte Ltd

Note: the company practices JIT (just-in-time inventory) management and carries a negligible amount of inventory.

*Account receivable turnover = 6 times
*Account payable turnover = 4 times

*assume that in a year consists of 365 days

i) Calculate the operating and cash cycle for ABC company.

ii) Evaluate the implications of cash cycle for ABC working capital management

iii) You are required to pay back $5300 based on the amount of $5000 you borrowed. Calculate the EAR (effective annual rate) of this loan.

The table below shows a ratio of 4 companies.
retail jewelry, advertising agency, heavy equipment manufacturer and bank.

(a)

i) Interpret the table and briefly discuss why company (1) is a bank?

ii) Interpret the ratios in the table shown in part (a) to identify the remaining (3) company and briefly discuss the reason?

iii) Morgan and Miller Proposition I with taxes suggest that optimal capital structure should be close to 100% debt. Yet the companies (with the exception of Company 1) in the table have debt level very much less than 100% as shown by debt-equity ratio. Briefly explain why?

"Caspian Sea Drinks is considering the purchase of a plum juicer – the PJX5. There is no planned increase in production. The PJX5 will reduce costs by squeezing more juice from each plum and doing so in a more efficient manner. Mr. Bensen gave Derek the following information. What is the NPV of the PJX5?

a. The PJX5 will cost $1.53 million fully installed and has a 10 year life. It will be depreciated to a book value of $205,829.00 and sold for that amount in year 10.

b. The Engineering Department spent $12,750.00 researching the various juicers.

c. Portions of the plant floor have been redesigned to accommodate the juicer at a cost of $20,878.00.

d. The PJX5 will reduce operating costs by $484,561.00 per year.

e. CSD’s marginal tax rate is 24.00%.

f. CSD is 75.00% equity-financed.

g. CSD’s 12.00-year, semi-annual pay, 5.67% coupon bond sells for $951.00.

h. CSD’s stock currently has a market value of $20.65 and Mr. Bensen believes the market estimates that dividends will grow at 3.48% forever. Next year’s dividend is projected to be $1.61."

Please round to 2 decimal places

Mr Brown is the manager of a portfolio consisting of stocks as shown below. the market risk premium is 8% and the risk free-rate is 3%

i) Calculate the beta and expected return of the portfolio

ii) Appraise & discuss why Mr Brown included stock Z in the portfolio

iii) Mr Brown strongly believe that the stock market would rise in the next one year. Discuss one possible way that he could use to increase the performance of the portfolio if the stock market were to rise.

Explain how the cost of capital (rate) is calculated and how it is used in capital budgeting decisions.

Over the past couple of weeks, there has been tremendous volatility in the global equity markets. Assume that you own an investment portfolio valued at $250,000 on January 1, 2020. What could you have done to protect the value of your portfolio from these market conditions? What type of stock orders or derivatives would you have used and why? Please explain in detail.

Assuming £1.00 = $1.45 and €1.00 = $1.25, the interest rate in the UK is 6.50% and the interest rate in Germany is 5.45%, determine the forward rate of the   £ / € if interest rate parity (IRP) holds. What does this imply about future forward rates? Explain how you can engage in covered interest arbitrage if the spot rate remains the same, and the interest rate in the UK is still 6.50%, and the forward rate is .868 £ / € .