Name at least 1 financial or operations-related statement that managers review monthly that provides insight into the performance of the business. What does the statement reveal to the manager and how does the manager use it to improve operations?

2. Ultimate Electric, Inc. has just developed a solar panel capable of generating 200 percent more electricity than any solar panel currently on the market. As a result, Ultimate is expected to experience a 15 percent annual growth rate for the next five years. When the five-year period ends, other firms will have developed comparable technology, and Ultimate’s growth rate will slow to 5 percent per year indefinitely. Stockholders require a return of 12 percent on Ultimate’s stock. The firm’s most recent annual dividend (D0), which was paid yesterday, was $1.75 per share.

a. Calculate the value of the stock today.

b. Calculate the dividend yield, Dˆ 1 /P0, the expected capital gains yield, and the expected total return (dividend yield plus capital gains yield) for this year. Calculate these same three yields for Year 5.

c. Suppose your boss believes that Ultimate’s annual growth rate will be only 12 percent during the next five years and that the firm’s normal growth rate will be only 4 percent. Under these conditions, what is the price of Ultimate’s stock?

d. Suppose your boss regards Ultimate as being quite risky and believes that the required rate of return should be higher than the 12 percent originally specified. Rework the problem under the conditions originally given, except change the required rate of return to (1) 13 percent, (2) 15 percent, and (3) 20 percent to determine the effects of the higher required rates of return on Ultimate’s stock price.

Twist Corp. has a current accounts receivable balance of $328,800. Credit sales for the year just ended were $4,192,200.

a. What is the company's receivables turnover? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

b. What is the company's days' sales in receivables? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

c. How long did it take on average for credit customers to pay off their accounts during the past year? (Use 365 days a year. Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.)

Big Sky Mining Company must install $1.5 million of new machinery in its Nevada
mine. It can obtain a bank loan for 100% of the purchase price, or it can lease the
machinery. Assume that the following facts apply.
(1) The machinery falls into the MACRS 3-year class.
(2) Under either the lease or the purchase, Big Sky must pay for insurance, property
taxes, and maintenance.
(3) The firm’s tax rate is 25%.
(4) The loan would have an interest rate of 15%. It would be nonamortizing, with only
interest paid at the end of each year for four years and the principal repaid at Year 4.
(5) The lease terms call for $400,000 payments at the end of each of the next 4 years.
(6) Big Sky Mining has no use for the machine beyond the expiration of the lease, and
the machine has an estimated residual value of $250,000 at the end of the 4th year.
a. What is the cost of owning?
b. What is the cost of leasing?
c. What is the NAL of the lease?

24.

The sustainable growth rate of a firm is best described as the

25.

Which of the following statements are correct?

I. Going-concern value of a firm is equal to the present value of expected future cash flows to owners and creditors.
II. When an acquiring firm purchases a target firm’s equity, the acquirer need not assume the target’s liabilities.
III. The market value of a public company reflects the worth of the business to minority investors.
IV. The fair market value of a business is usually the lower of its liquidation value and its going-concern value.

26.

The following information is available about Chiantivino Corp. (CC):

An activist investor is confident that by terminating CC’s money-losing fortified wine division, she can increase free cash flow by $4 million annually for the next decade. In addition, she estimates that an immediate, special dividend of $10 million can be financed by the sale of the division.

27.

Which of the following statements is/are correct?
I. Going-concern value of a firm is equal to the present value of expected net income.
II. When a buyer values a target firm, the appropriate discount rate is the buyer’s weighted-average cost of capital.
III. The liquidation value estimate of terminal value usually vastly understates a healthy company’s terminal value.
IV. The value of a firm’s equity equals the discounted cash flow value of the firm minus all liabilities.

28.

A recent annual income statement for Stone Creek Roofing is shown below.

Assume that during the year, Stone Creek spent $180 on new capital equipment and increased current assets net of non-interest-bearing current liabilities by $120. What was Stone Creek’s free cash flow in this year?

Need 300 words discussion, Identify and describe two (2) incremental cash flows from a proposed project such as expanding a product line or to launching a new product or service

Please don't rewrite already existing chegg answer

A loan of $100,000 is made today. The borrower will make equal repayments of $3418.16 per month with the first payment being exactly one month from today. The interest being charged on this loan is constant (but unknown).

For the following two scenarios, calculate the interest rate being charged on this loan, expressed as a nominal annual rate in percentage:

(a) The loan is fully repaid exactly after 33 monthly repayments, i.e., the loan outstanding immediately after 33 repayments is exactly 0.

(b) The term of the loan is unknown but it is known that the loan outstanding 2 years later equals to $32254.82.

how to calculate non-operating income days?

Lindsay is 28 years old and has a new job in web development. She wants to make sure that she is financially sound by the age of 55, so she plans to invest the same amount into a retirement account at the end of every year for the next 27 years.

(a) Construct a data table in Excel that will show Lindsay the balance of her retirement account for various levels of annual investment and return. If Lindsay invests $10,000 at return of 6%, what would be the balance at the end of the 27th year? Note that because Lindsay invests at the end of the year, there is no interest earned on the contribution for the year in which she contributes. Round your answer to a whole dollar amount.

(b) Develop a two-way table for annual investment amounts of $5,000 to $20,000 in increments of $1,000 and for returns of 0% to 12% in increments of 1%. From the 2-way table, what are the minimum annual investments Lindsay’s must contribute for annual rates ranging from 6% to 11%, if she wants to accrue a final payout of at least $1 million? Note that because Lindsay invests at the end of the year, there is no interest earned on the contribution for the year in which she contributes.

Annual Return Minimum Annual Investment 6% $ 7% $ 8% $ 9% $ 10% $ 11% $

The Trailing Multiples or the Forward Multiple? which one is the best? Why?

What are the benefits of using the Earnings Multiple Method to determine the value of a target company?

Where should the analyst exercise caution when using the Earnings Multiple Method?

Should the results of the Earnings Multiple Method be used as the final determination of the value of the target company? Why? Or why not?

$5,000 is deposited today into a bank account. The account earns 7.1% per annum compounded half yearly for the first 6 years, then 4.2% per annum compounded quarterly thereafter. Assuming no further deposits or withdrawals are made, (a) Calculate the account balance six months from today. (b) Calculate the account balance 6 years from today. (c) Calculate the account balance 6.5 years from today. (d) Calculate the account balance 10 years from today.

McGilla Golf is evaluating a new line of golf clubs. The clubs will sell for $910 per set and have a variable cost of $405 per set. The company has spent $135,000 for a marketing study that determined the company will sell 46,000 sets per year for seven years. The marketing study also determined that the company will lose sales of 8,600 sets of its high-priced clubs. The high-priced clubs sell at $1,410 and have variable costs of $540. The company also will increase sales of its cheap clubs by 11,200 sets. The cheap clubs sell for $405 and have variable costs of $135 per set. The fixed costs each year will be $9,200,000. The company has also spent $950,000 on research and development for the new clubs. The plant and equipment required will cost $28,000,000 and will be depreciated on a straight-line basis to a zero salvage value. The new clubs also will require an increase in net working capital of $2,260,000 that will be returned at the end of the project. The tax rate is 23 percent and the cost of capital is 14 percent.

Calculate the payback period. (Do not round intermediate calculations and round your answer to 3 decimal places, e.g., 32.161.)

Calculate the NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Calculate the IRR. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

The Ironworks Pegs Corporation, facing a market that is requiring more and more of the square-type pegs as opposed to the round one, is considering a project to start producing square pegs to meet the expected growth in the market demand. In order to produce the new pegs, the company needs to replace an existing old machine that produces round pegs with a new one. The new machine costs $150,000 (including shipping and handling). The old machine has been fully depreciated and the new one would be depreciated on a straight-line basis over its estimated useful life of 15 years. If the decision is made to go ahead with the project the old machine will be sold for $10,000. Annual revenues are expected to be $132,000; cost of goods sold $41,000; operating costs (excluding depreciation) $35,000. The existing operating profit (EBIT) from the old machine is $5,000 per year (which is assumed to continue for the following ten years if the new project does not get the green light). The company estimates the actual productive life of the project at 10 years, after which the new machine would be sold for a salvage value of $80,000. The initial net working capital needed for the expanded operations is estimated at $25,000. The NWC will rise to $35,000 by the end of year one, then to $50,000 by the end of year two. No additional changes in NWC are expected for years three through eight. By the end of year 9, the NWC would be reduced to $30,000 (no theft, spoilage, or obsolescence is assumed to have occurred by the end of year ten). The way the company made all these estimates is by conducting a technical and economic feasibility study that cost $35,000. It also cost $15,000 to market-test the new widgets. The company’s marginal tax rate is 40%. The required rate of return on this investment is 15%.

1. Calculate the net initial investment needed for the new peg machine.

2. Calculate the expected after-tax salvage value of the new machine when the time comes for it to be sold.

3. Estimate all the relevant annual free cash flows and show them on a timeline using the Excel spreadsheet.

4. Use the six capital budgeting decision criteria to make a decision as to whether to go ahead with the project. Use the Excel finance functions. Assume a 6-year acceptable payback period.

Please give us one example from your research, work, or personal life using the concepts of present value, future value and discounting cash flows and applying it to bond valuation and pricing.