1. Based on the loanable funds theory, explain how each of the following changes should impact interest rates (increase or decrease):
   1. Covenants on borrowing become more restrictive.
   2. The Federal Reserve increases the money supply.
   3. Total household wealth increases.

LUVE produces bracelets. Each band generates $460 in revenue and requires one
ounce of gold as an input. LUVE plans to produce and sell one widget in exactly
one year. The c.c. risk-free rate is zero percent.

1. LUVE is considering hedging their gold exposure with a long forward contract.
   The one-year forward price of gold is $420 per ounce. If the spot price of gold is $450
   per ounce in one year, what is LUVE's hedged profit?

The answer I got was 30

2. LUVE is considering hedging their gold exposure with a call option. The premium on a one-year call option on gold with a strike of $420 per ounce is $8.77. If the
price of gold is $450 per ounce in one year, what is LUVE’s hedged profit?

I got 21.23

3. The call option hedge outperforms the long forward hedge (in terms of profits) whenever the gold price is below S*. What value of S* makes this statement true?

I got -38.77

(The following data apply to the next three questions.)

Assume the following cost and revenue data for General Hospital: Fixed costs = $15,000,000. Variable cost per inpatient day = $250. Revenue per inpatient day = $1,000.

1. What is the expected profit at a volume of 25,000 inpatient days?

a. -$3,750,000 b. $ 0 c. $1,750,000 d. $2,750,000 e. $3,750,000

2. What revenue per inpatient day is required to obtain a profit of $1,000,000 at a volume of 25,000 patient days?

a. $750 b. $790 c. $850 d. $890 e. $950

3. Which of the follow statements best describes the contribution margin?

a. The contribution margin is defined as fixed costs minus variable costs.

b. Under fee-for-service, the contribution margin is the dollar amount of each unit of service that is available first to cover fixed costs and then to contribute to profit. c. Under capitation, the contribution margin is the dollar amount of each PMPM premium that is available to pay for administration overhead.

d. The contribution margin is defined as revenues minus fixed costs.

e. Under capitation, the total contribution margin is the contribution margin multiplied by the PMPM premium rate.

Question 1: In the past 3 years, give an example of one Bank Security breach?

Question 2: In your opinion, are Bank mergers beneficial or detrimental to the general public?

Question 3: Are bank branches still necessary? If so, why??

Daryl wishes to save money to provide for his retirement. Beginning one month from now, he will begin depositing a fixed amount into a retirement savings account that will earn 12% compounded monthly. He will make 360 such deposits. Then, one year after making his final deposit, he will withdraw $100,000 annually for 25 years. The fund will continue to earn 12% compounded monthly. How much should the monthly deposits be for his retirement plan?

A) 189.58

B) 199.58

C) 214.21

D) 234.89

E) 249.38

how do u calculate value of a bond

You consider purchasing $1000 face value 7 year annual coupon bond which currently sells for $975.20 at the bond market the annual coupon payments are $70 given that your annual required rate of return to purchase his bond is 8%

a)What is the value of the bond to you a potential investor?

b) What is your expected rate of return should you purchase the barn today and hold it to maturity

c) would u buy the bond

Bakes A Lot, Inc., has $1,000 face value bonds outstanding. These bonds pay interest semi-annually, mature in 3 years, and have a 8.0 percent coupon. The current price is quoted at 98.59. What is the yield to maturity?

Johnson Real Estate Company was founded 25 years ago by the current CEO, David Johnson. The company purchases real estate, including land and buildings, and rents the property to tenants. The company has shown a profit every year for the past 18 years, and the shareholders are satisfied with the company’s management. Prior to founding Johnson Real Estate, David was the founder and CEO of a failed camel farming operation. The resulting bankruptcy made him extremely averse to debt financing. As a result, the company is entirely equity financed, with 8 million shares of common stock outstanding. The stock currently trades at $37.80 per share. Johnson is evaluating a plan to purchase a huge tract of land in the southeastern United States for $85 million. The land will subsequently be leased to tenant farmers. This purchase is expected to increase Johnson's annual pretax earnings by $14.125 million in perpetuity. Abigail Burton, the company’s new CFO, has been put in charge of the project. Abigail has determined that the company’s current cost of capital is 10.2 percent. She feels that the company would be more valuable if it included debt in its capital structure, so she is evaluating whether the company should issue debt to entirely finance the project. Based on some conversations with investment banks, she thinks that the company can issue bonds at par value with a 6 percent coupon rate. From her analysis, she also believes that a capital structure in the range of 70 percent equity/30 percent debt would be optimal. If the company goes beyond 30 percent debt, its bonds would carry a lower rating and a much higher coupon because the possibility of financial distress and the associated costs would rise sharply. Johnson has a 23 percent corporate tax rate (state and federal). If Johnson wishes to maximize its total market value, would you recommend that it issue debt or equity to finance the land purchase? Explain.

An old two-flat can be purchased for $200,000 cash. The two units can bring in a total of $2,500 per month (allowing for normal vacancies). The total operating expenses for property taxes, repairs, gardening, and so forth are estimated to be $200 per month. For tax purposes, straight-line depreciation over a 20-year remaining life with to a zero salvage value will be used.

Of the total $200,000 cost of the property, $50,000 is the value of the land. Assume a 38% marginal income tax bracket (combined state and federal taxes) applies throughout the 20 years. This tax rate applies to ordinary income and capital gains/losses.

Since there is no growth expected in rents or expenses, depreciation is straight-line, and the tax rate doesn’t change, the ATCF’s for each year, 1 to 20, will be the same.

1a.

What after-tax IRR would you expect assuming that the property is held for twenty years and then sold for $50,000?

1b.

What after-tax IRR would you expect assuming that the property is held for twenty years and then sold for $150,000?

Do not use excel

Geraldine Wolfe is a supervisor at Fantastigifts. She has an annual salary of $45,500, paid biweekly, and a garnishment for consumer credit of $435. Assuming that her disposable income is 80 percent of her gross pay per period, does the garnishment follow the CCPA? If not, what is the maximum garnishment allowed for Geraldine’s consumer credit garnishment? (Round your intermediate calculations and final answer to 2 decimal places.)

1. Does the garnishment follows the CCPA?

2. Maximum garnishment allowed:

The following payments are made under an annuity: 12 at the end of the 44th year, 11 at the end of the 55th year, decreasing by 11 each year until nothing is paid. Find the present value if the annual effective rate of interest is 3%.

Fuzzy Restaurant is considering the purchase of a $1,500,000 flat top grill. The grill has an economic life of 8 years and will be fully depreciated using straight line method. The grill is expected to produce 59,000 tacos per year for the next 8 years, with each costing $1.50 to make and priced at $5. Assume the discount rate is 8% and the tax rate is 21%. The restaurant expects the market value of the grill to be $200,000, 8 years from now. Calculate the book value of the grill at the end of year 5. (Round to 2 decimals) Calculate the operating cash flow at the end of year 1. Calculate the net present value.

Assume that you purchased a share of the Company at the beginning of 2018 for $54.58. One year later the stock was worth $53.53, but during 2018 you received a cash dividend of $2.32

Calculate the following:

1. Income

2. Capital gain (loss)

3. Total return – a. in dollars; b. as a percent

Finco Inc. manufactures financial calculators. The company is deciding whether to introduce a new calculator. This calculator will sell for $85. The company feels that sales will be 13,500, 13,900, 14,000, 14,200, and 13,000 units per year for the next 5 years. Variable costs will be 30% of sales, and fixed costs are $250,000 per year. The firm hired a marketing team to analyze the viability of the product and the marketing analysis cost $1,000,000. The company plans to use a vacant warehouse to manufacture and store the financial calculators. Based on a recent appraisal the warehouse and the property is worth $2.2 million on an after tax basis. If the company does not sell the property today then it will sell the property 5 years from today at the currently appraised value. This project will require an injection of net working capital at the on set of the project in the amount of $50,000. This net working capital will be fully recovered at the end of the project. The firm will need to purchase some equipment in the amount of $500,000 to produce the new calculators. The machine has a 7 year life and will be depreciated using the straight-line method. At the end of the project, the anticipated market value of the machine is $150,000. The firm requires an 8% return on its investment and has a tax rate of 21%. 1.Calculate the sunk cost of the project. (Enter a positive value and round to the nearest dollar) 2.Calculate the opportunity cost of the project. (Enter a positive value and round to the nearest dollar) 3.Calculate the net working capital injection at the beginning of the project. (Enter a positive value and round to the nearest dollar) 4.Calculate the book value of the machine at the end of year 5. (Round to two decimals) 5.Calculate the depreciation expense at the end of year 2. (Round to two decimals) 6.Calculate the after tax salvage value at the end of year 5. (Round to two decimals) 7.Calculate the operating cash flows at the end of year 1. (Round to two decimals) 8.Calculate the initial cash outflow (e.g. the time 0 cash flow). (Enter a negative value and round to two decimals) 9.Calculate the cash flow from assets at the end of year 5. (Round to two decimals) 10.Calculate the net present value for the project. (Round to 2 decimals)