Identify and describe two incremental cash flows for project such as expanding a product line or launching a new product or service.
Need 300b words discussion
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You discover that the client's previous tax returns from last year, which someone else prepared, listed a deduction of $3,000 in excess of the actual expenditure. This mistake was not intention and the IRS will probably not detect the error. You can change the error, which might cost the client additional liability. Another option would be to prepare the return from the previous year so that the mistake was yours. Create a price structure for each option. Indicate to the client that you want to meet to discuss these options.
For this assignment, feel free to add any additional information that you feel the client would want to know about each option (this can come from your own experiences, knowledge from other courses, etc). You can be creative with some of the information in the memo, such as name, date, etc.
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(CO B) Ms. Towne is buying a home for $250,000 and is putting down 20% cash on the purchase. She is financing the rest with a 30-year, fixed rate mortgage with a rate of 4.625% but is considering an option that would allow her to make biweekly payments. How much interest would the biweekly payment option allow her to save over the life of the loan and how long would it take to pay off the loan?
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A borrower is purchasing a property for $180,000 and can choose between two possible loan alternatives. The first is a 80% loan for 25 years at 8% interest and 1 point and the second is a 95% loan for 25 years at 9.25% interest and 2 points. Assuming the loan will be held to maturity, what is the incremental cost of borrowing the extra money?
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10-year corporate bond has a coupon rate of 6% with semi-annual payments. If interest rates rise to 7% on similar bonds then what is the value of the bond in the marketplace?
A 10-year corporate bond has a coupon rate of 6% with semi-annual payments. If interest rates rise to 5% on similar bonds then what is the value of the bond in the marketplace?
A 10-year corporate bond has a coupon rate of 6% with annual payments. If the current value of the bond in the marketplace is $900, then what is the Yield-to-Maturity (YTM)?
A 10-year corporate bond has a coupon rate of 6% with annual payments. If the current value of the bond in the marketplace is $1100, then what is the Yield-to-Maturity (YTM)?
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Balance Sheet Analysis
Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data:
Total assets turnover: 1.3
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales =
23%
Total liabilities-to-assets ratio: 55%
Quick ratio: 1.25
Days sales outstanding (based on 365-day year): 33 days
Inventory turnover ratio: 6.0
Round your answers to the nearest whole dollar.
| Partial Income | Statement Information |
| Sales | $ |
| Cost of goods sold | $ |
Balance Sheet
| Cash | $ | Accounts payable | $ |
| Accounts receivable | $ | Long-term debt | $ 50,000 |
| Inventories | $ | Common stock | $ |
| Fixed assets | $ | Retained earnings | $ 100,000 |
| Total assets | $ 400,000 | Total liabilities and equity | $ |
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In: Finance
(1) You wish to retire in 10 years, at which time you want to
have accumulated enough money to receive an annual annuity of
$13,000 for 15 years after retirement. During the period before
retirement you can earn 9 percent annually, while after retirement
you can earn 11 percent on your money.
What annual contributions to the retirement fund will allow you to
receive the $13,000 annuity? Use Appendix C and Appendix D for an
approximate answer, but calculate your final answer using the
formula and financial calculator methods. (Do not round
intermediate calculations. Round your final answer to 2 decimal
places.)
Annual contribution=
(2) Mr. Dow bought 100 shares of stock at $17 per share. Three
years later, he sold the stock for $23 per share. What is his
annual rate of return? Use Appendix B for an approximate answer,
but calculate your final answer using the financial calculator
method. (Do not round intermediate calculations. Round your
final answer to 2 decimal places.)
Annual rate of return % =
(3) Franklin Templeton has just invested $9,760
for his son (age one). This money will be used for his son’s
education 19 years from now. He calculates that he will need
$35,235 by the time the boy goes to school.
What rate of return will Mr. Templeton need in order to achieve
this goal? Use Appendix B for an approximate answer, but calculate
your final answer using the formula and financial calculator
methods. (Do not round intermediate calculations. Round
your final answer to 2 decimal places.)
Rate of Return% =
(4) Juan Garza invested $103,000 5 years ago at
8 percent, compounded quarterly. How much has he accumulated? Use
Appendix A for an approximate answer but calculate your final
answer using the formula and financial calculator methods.
(Do not round intermediate calculations. Round your final
answer to 2 decimal places.)
Future Value =
(5) Jack Hammer invests in a stock that will pay dividends of $3.15 at the end of the first year; $3.60 at the end of the second year; and $4.05 at the end of the third year. Also, he believes that at the end of the third year he will be able to sell the stock for $65.What is the present value of all future benefits if a discount rate of 8 percent is applied? Use Appendix B for an approximate answer, but calculate your final answer using the formula and financial calculator methods.
Dividend Present Value
$3.15
3.60
4.05
65.00
Total
(6) Rita Gonzales won the $44 million lottery.
She is to receive $2 million a year for the next 17 years plus an
additional lump sum payment of $10 million after 17 years. The
discount rate is 9 percent.
What is the current value of her winnings? Use Appendix B and
Appendix D for an approximate answer, but calculate your final
answer using the formula and financial calculator
methods.(Do not round intermediate calculations. Round your
final answer to 2 decimal places.)
Present Value =
In: Finance
Currently, your firm plans on depreciating an upcoming project’s PPE from an initial value of $800k to a final book value of $100k over a 10 year period. You’ve been asked to value a possible change in the depreciation scheme which will accelerate this process by depreciating the machine over a 6 year period (let’s assume this is legal to do). If you accelerate depreciation, you will still be depreciating to a final book value of $100k. If the project’s discount rate is 12% and the firm’s tax rate is 35%, by how much will the project’s NPV change if you switch to the accelerated depreciation schedule?
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You would like to purchase a vacation home in 15 years.
The current price of such a home is $275,000 but the price of these
types of homes is rising at a rate of 3% per year.
How much would you have to invest in years 1 to 5, (the same amount
in each year) in nominal terms to exactly pay for the vacation home
if your investments earn 4% APR (compounded annually) in nominal
terms?
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Comprehensive Ratio Analysis
Data for Lozano Chip Company and its industry averages follow.
Lozano Chip Company: Balance Sheet as of December 31, 2016 (Thousands of Dollars)
| Cash | $ 225,000 | Accounts payable | $601,866 | |
| Receivables | 1,575,000 | Notes payable | 326,634 | |
| Inventories | 1,125,000 | Other current liabilities | 525,000 | |
| Total current assets | $2,925,000 | Total current liabilities | $1,453,500 | |
| Net fixed assets | 1,350,000 | Long-term debt | 1,068,750 | |
| Common equity | 1,752,750 | |||
| Total assets | $4,275,000 | Total liabilities and equity | $4,275,000 |
Lozano Chip Company: Income Statement for Year Ended December 31, 2016 (Thousands of Dollars)
| Sales | $7,500,000 |
| Cost of goods sold | 6,375,000 |
| Selling general and administrative expenses | 825,000 |
| Earnings before interest and taxes (EBIT) | $ 300,000 |
| Interest expense | 111,631 |
| Earnings before taxes (EBT) | $ 188,369 |
| Federal and state income taxes (40%) | 75,348 |
| Net income | $ 113,022 |
| Ratio | Lozano | Industry Average |
| Current assets/Current liabilities | 2.0 | |
| Days sales outstanding* | days | 35.0 days |
| COGS/Inventory | 6.7 | |
| Sales/Fixed assets | 12.1 | |
| Sales/Total assets | 3.0 | |
| Net income/Sales | % | 1.2% |
| Net income/Total assets | % | 3.6% |
| Net income/Common equity | % | 9.0% |
| Total debt/Total assets | % | 30.0% |
| Total liabilities/Total assets | % | 60.0% |
| *Calculation is based on a 365-day year. | ||
| For the firm, ROE is | % |
| For the industry, ROE is | % |
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Analyze why, despite employing various investment appraisal techniques, large investment projects in big corporations may fail to deliver their estimated cash flows. Critically assess how a failed capital project may affect key stakeholders and shareholder value, and also shape the future strategy of investment capital.
(within 2000 words)
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Do you agree that the selection of a top-quality candidate is a critical process in organizations, or do you think intensive training after the person is selected is more valuable? Explain your answer.
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12. Assume the BonBon Candy Company is a constant growth company whose last dividend was $3,00 and whose dividend is expected to grow indefinitely at 6% rate. It normally discounts all cash flow at 10% .
a. what is the firm’s expected dividend stream over the next three years ?
b. what is the firm’s current stock price ?
c. what is the stoch’s expected value one year from now ?
d. what are the following :
i. the expected dividend yield during first year ?
ii. the capital gain yield during the first year ?
iii. the total return during the first year ?
e. now assume that the stock is currently selling at $79.50 . what is the expected rate of return on the stock?
f. what would the stock price be if its dividends were expected to have zero growth?
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How much debt is too much for an organization, and should more users of organizational data use the combined degree of operating leverage versus operational and/or financial? min 200 words
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