how to make money online

A young graduate is trying to decide whether to lease or buy a car for the next three years. The cash flows for each choice are shown below. (We will ignore gas, insurance, and tag fees.)

YEAR 0 1 2 3

LEASE -$4,500.00 -$3,500.00 -$3,500.00 -$3,500.00

PURCHASE -$35,141.00 0 0 $24,304.00

The graduate has a personal discount rate of 7.00%. At what discount rate would the graduate be indifferent between the two choices?

(Summarize your thoughts to the below post)

Until you've actually been there and done that, you don't really know for sure what to expect. This concept is pretty much applicable to anything in life, whether your talking about having your first child or taking a multinational company into a new market. Experience can mean everything to how things flow or don't and that is before anything uncontrollable is mixed in.

As for the multinational companies trying to break into emerging markets, the need for regional experts and a firm understanding of the business culture can often be overlooked and underestimated. Elections, politics, weather related catastrophes and economic uncertainties are best managed with local management. They have experienced the "political uncertainty," and experienced a majority of the risks associated with doing business in that particular country. Who knows, the manager or consultant you hire might just be the son of a high ranking politician, maybe even the Vice President of the country. Given the often liquid state of political appointments it can be very difficult to hedge against political risk, there is just to much uncertainty. Utilizing managers who have lived and worked in the host country will help multinational companies navigate the uncertainties and should be a first consideration when trying to manage the hidden risks of emerging markets.

why is it dangerous to rely only upon income statements to evaluate financial performance of companies? what other statements should evaluate?

Respond to the primary arguments of Lynne Twist's book "The Soul of Money." In particular identify the "Three Toxic Myths" she describes. PIck one of the myths and explain your response to her claim. Do you agree? Disagree? in Either case, explain why.

Percy Footwear acquired all the voting stock of Simali Inc. at the beginning of 2016. The acquisition cost was $400,000, and Simali’s book value at that time consisted of $25,000 in capital stock and $75,000 in retained earnings. Revaluation information for Simali’s identifiable net assets is as follows:

• Plant assets with a 20-year remaining life, straight-line, were overvalued by $80,000
• Inventory (sold in 2016) was overvalued by $20,000
• Previously unrecorded indefinite life developed technology was valued at $150,000; impairment to the beginning of 2020 was $10,000, and there is no impairment for 2020.
• Goodwill was not impaired as of the beginning of 2020; impairment in 2020 was $25,000.

It is now the end of 2020 (five years after the acquisition). Simali’s retained earnings at the beginning of 2020 is $125,000, and it reports net income of $45,000 for 2020. It declares no dividends. Percy uses the complete equity method to report its investment in Simali on its own books. Simali sells merchandise to Percy on a regular basis, at a markup of 20 percent on cost. Total sales made to Percy in 2020 were $200,000. Percy’s beginning inventory balance has $12,000 in merchandise purchased from Simali. Percy’s ending inventory balance has $18,000 in merchandise purchased from Simali.

Required

a.         Calculate equity in net income for 2020, reported on Percy’s books.

b.         Calculate the December 31, 2020 balance for investment in Simali, reported on Percy’s books.

c.          Calculate the original balance for goodwill, reported for this acquisition.

1.

Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $333,520 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,760,000. The cost of the machine will decline by $110,000 per year until it reaches $1,320,000, where it will remain. The required return is 16%.

What is the NPV if the company purchases the machine today? (Round answer to 2 decimal places. Do not round intermediate calculations)

Topic: Capital Budgeting Project

2.

Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $330,381 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,760,000. The cost of the machine will decline by $110,000 per year until it reaches $1,320,000, where it will remain. The required return is 13%.

What is the NPV if the company decides to wait 2 years to purchases the machine? (Round answer to 2 decimal places. Do not round intermediate calculations)

Topic: Real Option to Delay

We are evaluating a project that costs $842,318, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 56,424 units per year. Price per unit is $37, variable cost per unit is $18, and fixed costs are $423,844 per year. The tax rate is 35%, and we require a return of 22% on this project.

In percentage terms, what is the sensitivity of NPV to changes in the units sold projection? (Round answer to 2 decimal places. Do not round intermediate calculations)

Topic: Sensitivity Analysis

We are evaluating a project that costs $836,559, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 62,175 units per year. Price per unit is $35, variable cost per unit is $19, and fixed costs are $418,916 per year. The tax rate is 35%, and we require a return of 22% on this project.

In percentage terms, what is the sensitivity of OCF to changes in the variable cost per unit projection? (Round answer to 2 decimal places. Do not round intermediate calculations)

Topic: Sensitivity Analysis

1. Discuss the pros and cons of using the various measures of profitability to examine a company’s performance.

What is corporation and three types of corporations?

Portfolio Required Return

Suppose you manage a $6 million fund that consists of four stocks with the following investments:

If the market's required rate of return is 17% and the risk-free rate is 7%, what is the fund's required rate of return? Do not round intermediate calculations.

Bluegrass Mint Company has a debt-equity ratio of .35. The required return on the company’s unlevered equity is 12.7 percent and the pretax cost of the firm’s debt is 6.5 percent. Sales revenue for the company is expected to remain stable indefinitely at last year’s level of $19,600,000. Variable costs amount to 65 percent of sales. The tax rate is 25 percent and the company distributes all its earnings as dividends at the end of each year.

c-1. Use the weighted average cost of capital method to calculate the value of the company. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89)

c-2. What is the value of the company’s equity? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89)

c-3. What is the value of the company’s debt? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89)

d. Use the flow to equity method to calculate the value of the company’s equity. (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to 2 decimal places, e.g., 1,234,567.89)

What is the firm's cash flow from financing?