1. Calculate the external financing needed (EFN) assuming 12% growth rate and full capacity operation. Use Excel to create pro-forma financial reports.

You want to buy a house that costs $320,000. You have $32,000 for a down payment, but your credit is such that mortgage companies will not lend you the required $288,000. However, the realtor persuades the seller to take a $288,000 mortgage (called a seller take-back mortgage) at a rate of 5%, provided the loan is paid off in full in 3 years. You expect to inherit $320,000 in 3 years, but right now all you have is $32,000, and you can afford to make payments of no more than $25,000 per year given your salary. (The loan would call for monthly payments, but assume end-of-year annual payments to simplify things.)

1. If the loan was amortized over 3 years, how large would each annual payment be? Do not round intermediate calculations. Round your answer to the nearest cent.

   $  

   Could you afford those payments?
   -Select-No, the calculated payment is greater than the affordable payment.Yes, the calculated payment is less than the affordable payment.No, the affordable payment is greater than the calculated payment.Yes, the calculated payment is greater than the affordable payment.Item 2

2. If the loan was amortized over 30 years, what would each payment be? Do not round intermediate calculations. Round your answer to the nearest cent.

   $  

   Could you afford those payments?
   -Select-Yes, the calculated payment is less than the affordable payment.No, the calculated payment is greater than the affordable payment.No, the affordable payment is greater than the calculated payment.Yes, the calculated payment is greater than the affordable payment.Item 4

3. To satisfy the seller, the 30-year mortgage loan would be written as a balloon note, which means that at the end of the third year, you would have to make the regular payment plus the remaining balance on the loan. What would the loan balance be at the end of Year 3, and what would the balloon payment be? Do not round intermediate calculations. Round your answers to the nearest cent.

   Loan balance: $  

   Balloon payment: $  

Consider an investment that costs $100,000 and has a cash inflow of $25,000 every year for 5 years. The required return is 9%, and payback cutoff is 4 years.

A. What is the payback period?

B. What is the discounted payback period?

C. What is the NPV? D. What is the IRR?

E. Should we accept the project?

What method should be the primary decision rule?

When is the IRR rule unreliable?

Please include steps on how to solve and all parts to question. Thank you.

Dave takes out a 23-year mortgage of 290000 dollars for his new house. Dave gets an interest rate of 14.4 percent compounded monthly. He agrees to make equal monthly payments, the first coming in one month. After making the 70th payment, Dave wants to buy a boat, so he wants to refinance his house to reduce his monthly payment by 400 dollars, and to get a better interest rate. In particular, he negotiates a new rate of 7.2 percent compounded monthly, and agrees to make equal monthly payments (each 400 dollars less than his original payments) for as long as necessary, followed by a single smaller payment. WHAT WILL BE DAVE'S FINAL PAYMENT AMOUNT BE?

Describe in your own words what is the relation between the Forward price of oil and the cost of storage. Besides providing the basic relation (increasing, decreasing, independent), please provide the economic reasoning. You are greatly encouraged to provide any graphical representation that might help convey the idea. Maximum 200 words. Please write as clear as possible.

Identify one quality problem that a bank can be currently facing and discuss the procedures that can adopted

to solve it using appropriate quality tools

Describe the relation between the yield curve of spot rates and the yield curve of forward rates. Besides providing the basic relation (increasing, decreasing, independent), please provide the economic reasoning. You are greatly encouraged to provide any graphical representation that might help convey the idea. Maximum 200 words. Please write as clear as possible.

You own a 25 acre strawberry farm. You currently lease the land to a strawberry farmer for $14,000 per year. Your annual administrative (or fixed) costs from owning the farm are approximately $2,000 per year.

1. You could sell the land for $160,000 today and currently have an investment opportunity for the $160,000 from which you expect to make a return of 8% per year.

a.        What are your accounting profits for the year?

b.       What are your economic profits for the year?

c.       Should you sell the land today? Explain why.

2. Now, suppose that price of the land is expected to decrease from its current value of $160,000 to $155,000 next year. Should you lease the land for $14, 000 for one year and wait to sell the land at the end of the year for $155,000? Or should you forget leasing and just sell the land for $160,000 today at its current value? Explain why. (ignore the time value of money, for now).

Your client is 28 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $14,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 8% in the future.

1. If she follows your advice, how much money will she have at 65? Do not round intermediate calculations. Round your answer to the nearest cent.

   $  

2. How much will she have at 70? Do not round intermediate calculations. Round your answer to the nearest cent.

   $  

3. She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Do not round intermediate calculations. Round your answers to the nearest cent.

   Annual withdrawals if she retires at 65: $

   Annual withdrawals if she retires at 70: $

Select 3 companies from the same industry that currently trade on the ASX, Describe what they do and the competitive position they are in.

1. Complete an amortization schedule for a $17,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 6% compounded annually. If an amount is zero, enter "0". Do not round intermediate calculations. Round your answers to the nearest cent.

   	Beginning			Repayment	Remaining
   Year	Balance	Payment	Interest	of Principal	Balance
   1	$	$	$	$	$
   2
   3

2. What percentage of the payment represents interest and what percentage represents principal for each of the 3 years? Do not round intermediate calculations. Round your answers to two decimal places.

   	% Interest	% Principal
   Year 1:	%	%
   Year 2:	%	%
   Year 3:	%	%

   Why do these percentages change over time?

   1. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance declines.
   2. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance declines.
   3. These percentages change over time because even though the total payment is constant the amount of interest paid each year is declining as the remaining or outstanding balance increases.
   4. These percentages change over time because even though the total payment is constant the amount of interest paid each year is increasing as the remaining or outstanding balance increases.
   5. These percentages do not change over time; interest and principal are each a constant percentage of the total payment.
   -Select-IIIIIIIVV

Problem 2-36 Income Statement (LG2-1)

You have been given the following information for PattyCake’s Athletic Wear Corp. for the year 2018:

1. Net sales = $38,900,000.

2. Cost of goods sold = $22,220,000.

3. Other operating expenses = $6,400,000.

4. Addition to retained earnings = $1,210,500.

5. Dividends paid to preferred and common stockholders = $1,943,000.

6. Interest expense = $1,850,000.

7. The firm’s tax rate is 30 percent.

In 2019:

8. Net sales are expected to increase by $9.90 million.

9. Cost of goods sold is expected to be 60 percent of net sales.

10. Depreciation and other operating expenses are expected to be the same as in 2018.

11. Interest expense is expected to be $2,125,000.

12. The tax rate is expected to be 30 percent of EBT.

13. Dividends paid to preferred and common stockholders will not change.

Calculate the addition to retained earnings expected in 2019. (Enter your answer in dollars, not millions.)

Discuss your understanding of determining value for a real estate property using the Sale Comparison Approach, the Cost Approach and the Income Approach from both the residential (personal home) perspective and the commercial investment property perspective.

Company H&R BLOCK

Be sure to provide a link to the financial statements. You must use the annual report, from the H &R Block website, or from the SEC database. Quarterly financial statements should not be used to do ratios because (1) many companies are seasonal and quarterly numbers may not be representative of annual performance and (2) quarterly numbers are not audited, whereas annual financials are. Financial information provided by third parties like Yahoo Finance or Google Finance are not acceptable, as these numbers are not necessarily accurate. You must use H & R Blocks official annual report. If you go to H& R Blocks website, and select investor section, annual reports, or SEC filings and you should get the correct information (which also might be in the form of a 10K report)

Show the ratio calculation for each year, the calculation result, and the interpretation of the numbers. I suggest you put it in tabular format and cut and paste into discussion to maintain formatting Do not post as an attachment.

What do you note in the changes of ratios from year to year? Explain what the ratios mean. Do these ratios correlate with what you know about these companies? Be sure to provide the raw data so we can see how you calculated these ratios. Do not use calculated ratios you might find on financial websites. They are often incorrect or use old data.

1. Gross Profit margin

2. Profit Margin

3. Debt Ratio ( Liabilities/Assets)

4. Quick Ratio

Please be sure to use H&R Block as the company!