How to calculate PVIFA step by step on a financial calculator? (casio FC-100v)

Replacement Analysis

Although the Chen Company's milling machine is old, it is still in relatively good working order and would last for another 10 years. It is inefficient compared to modern standards, though, and so the company is considering replacing it. The new milling machine, at a cost of $40,000 delivered and installed, would also last for 10 years and would produce after-tax cash flows (labor savings and depreciation tax savings) of $8,300 per year. It would have zero salvage value at the end of its life. The Project cost of capital is 10%, and its marginal tax rate is 35%.
Should Chen buy the new machine?

Yes? No?

How do the sources and uses of funds differ between commercial banks and credit unions? How do these differences relate to the relative size of the balance sheets amongst depository institutions?

An American Legend

Macy’s is an iconic American Company, but like many brick and mortar retailers, it has been struggling to maintain market share. For this case study find the company’s most recent financial statements, including the income statement and balance sheet. There are many sources of this data, but one quick source is Morningstar.com. If you enter the company’s ticket symbol, “M” in the quote box, you will find a report on the company’s stock price as well as a host of other information, such as performance, key ratios, and financials. On the financial tab, you can find the income statement and balance sheet for the past five years.

Question 1- Worth 25points

Looking at Macy’s income statement, what has been the trend in sales (total Revenue) over the past three years? What can you conclude from this? What picture does it tell?

Question 2- Worth 25points

As you have learned, gross profit is the difference between sales (or total revenues) and cost of sales (or cost of revenue). What is Macy’s gross profit for the last three years? What does this data tell you about Macy’s pricing strategy and costs?

Question 3- Worth 25points

Looking at Macy’s income statement, what has been the trend in net income over the past three years? What can you concluded by this?

Question 4- Worth 25points

What is the relationship between the price of Macy’s stock and earnings? What are the earnings per share for each of the past three years, and what does that number mean to investors?

Show your work please

You plan to purchase a $280,000 condo using a 15-year mortgage obtained from your local credit union. The mortgage rate offered to you is three percent. You will make a down payment of 20% of the purchase price. What is the amount of interest and principal paid in the 101^st payment?

Give an example of an off-balance sheet activity for a commercial bank, along with its benefits and risks.

chp. 20 (bank's performance)

1- Banks with relatively ________ ROAs often incur ________ noninterest expenses.

2- Market interest rate movements are least likely to affect which of the following income statement items?

Loretta Scholten bought a home for $210,000 with a down payment of $30,000. Her rate of interest is 6% for 35 years. Calculate the total cost of interest for Loretta Scholten. (Round your answer to the nearest cent.)

On March 31^st, 2020, you take delivery of a $100,000 T-bond that matures on October 31st, 2030. The coupon rate on the T-bond is 4.20% and the current yield to maturity on the bond is 3.80%. The last coupon payment occurred on October 31^st, 2019 and the next coupon payment occurs on April 30^th, 2020. Calculate the clean and dirty prices of this transaction.

Someone holds X stock (ABCD.JK). To minimize the risk, he wants to add another stock, He is considering to add Y (EFGH.JK) or Z (PQRS.JK). He gathers some information to help him make a decision:

The standard deviation of ABCD.JK is 0.1 and the return of ABCD.JK is 4%. The investor wants to build an equality weighted portfolio (both 50% weight). To help him decide, please calculate:

a. The portfolio’s expected return of ABCD.JK and EFGH.JK

b. The portfolio’s expected return between ABCD.JK and PQRS.JK

c. The portfolio’s standard deviation between ABCD.JK and EFGH.JK

D. The portfolio’s standard deviation between ABCD.JK and PQRS.JK

e. Which stock should he add? DEFG.JK or PQRS.JK? Explain!

AFN equation

Broussard Skateboard's sales are expected to increase by 20% from $7.0 million in 2016 to $8.40 million in 2017. Its assets totaled $5 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 55%. What would be the additional funds needed? Do not round intermediate calculations. Round your answer to the nearest dollar.
$

Assume that an otherwise identical firm had $6 million in total assets at the end of 2016. The identical firm's capital intensity ratio (A₀*/S₀) is -Select-higher than? lower than? equal to? than Broussard's; therefore, the identical firm is -Select-less? more? the same? capital intensive - it would require -Select-a smaller? a larger? the same? increase in total assets to support the increase in sales.

Assume the following information for two stocks, A and B, and a risk-free asset.

(a) Suppose you have a portfolio with investment of $200 in stock A, $400 in stock B, and $400 in the risk-free asset. Compute the expected return and standard deviation of this portfolio.

(b) Consider a portfolio that consists of only stocks A and B (but not the risk-free asset). If the expected return of this portfolio is 8%, what is the amount invested in Stock A?

(c) Explain why investing in a portfolio with both Stocks A and B is more preferable than investing in either Stock A, or Stock B only. Provide TWO reasons.

(d) Suppose the market portfolio return is 8%. Draw the security market line (SML) on a graph with clear labels on X and Y axis. You must plot the values of the equation of the line on the axis.

(e) Determine where Stock A and Stock B lies on the graph of SML and whether they are correctly priced, underpriced or overpriced.

The CFO of a manufacturing firm is determining the capital budget. Currently the market value of the firm' equity and debt are $4 billion and $12 billion, respectively. The company’s debt trades with a yield to maturity of 8%, and its equity has an expected return of 14%. The firm’s marginal tax rate is 30%.

The projects that are under consideration have different risk and returns. The company estimates that low-risk projects have a cost of capital of 8% and high-risk projects have a cost of capital of 18%.

Project                  Expected Return                   Risk

A 16% High

B 12% Average

C 10% Low

D 9% Low

E 6% Low

(a) Compute the company’s weighted average cost of capital (WACC).

(b) The Finance Manager suggests to invest only in projects which expected rate of returns are higher than the firm’s WACC. Do you agree with the Finance Manager? Justify your answers with reference to the use of WACC.

(c) To maximize shareholder wealth, which of the projects should the CFO select to invest in? Evaluate each project separately and provide the justification.

The CFO of a manufacturing firm is determining the capital budget. Currently the market value of the firm' equity and debt are $8 billion and $10 billion, respectively. The company’s debt trades with a yield to maturity of 8%, and its equity has an expected return of 14%. The firm’s marginal tax rate is 30%.

The projects that are under consideration have different risk and returns. The company estimates that low-risk projects have a cost of capital of 8% and high-risk projects have a cost of capital of 14%.

Project                Expected Return                   Risk

A 15% High

B 13% Average

C 12% High

D 10% Low

E 7% Low

(a) Compute the company’s weighted average cost of capital (WACC).

(b) The Finance Manager suggests to invest in projects which expected rate of returns are higher than the firm’s WACC. Do you agree with the Finance Manager? Justify your answers with reference to the use of WACC.

(c) To maximize shareholder wealth, which of the projects should the CFO select to invest in? Evaluate each project separately and provide the justification.