Suppose an individual invests $10,000 in a load mutual fund for two years. The load fee entails an up-front commission charge of 3 percent of the amount invested and is deducted from the original funds invested. In addition, annual fund operating expenses (or 12b-1 fees) are 0.80 percent. The annual fees are charged on the average net asset value invested in the fund and are recorded at the end of each year. Investments in the fund return 8 percent each year paid on the last day of the year. If the investor reinvests the annual returns paid on the investment, calculate the annual return on the mutual fund over the two-year investment period

(Do not round intermediate calculations. Round your answer to 3 decimal places. (e.g., 32.161))

Make sure the answer you provide is right please

Simply Chocolate Company is considering two possible expansion plans.Proposal X involves opening five stores in North Carolina at a cost of $2,400,000. Under Proposal Y, the company would focus on Virginia and open six stores at a cost of $3,000,000. The following information is given for the two proposals:

Proposal X Proposal Y

Required investment                                      $2,400,000        $3,000,000

Estimated life                                                   10 years              10 years

Estimated residual value                                  $200,000              $200,000

Estimated annual net cash flows                        $450,000             $580,000

Required rate of return                                       14%                      14%

Calculate the Accounting Rate of Return

2

Garida Co. is considering an investment that will have the following sales, variable costs, and fixed operating costs:

This project will require an investment of $10,000 in new equipment. The equipment will have no salvage value at the end of the project’s four-year life. Garida pays a constant tax rate of 40%, and it has a weighted average cost of capital (WACC) of 11%. Determine what the project’s net present value (NPV) would be when using accelerated depreciation.

Determine what the project’s net present value (NPV) would be when using accelerated depreciation. (Note: Round your intermediate calculations to the nearest whole number.)

$18,502

$24,670

$20,558

$16,446

Now determine what the project’s NPV would be when using straight-line depreciation._________

Using the_______ depreciation method will result in the highest NPV for the project.

No other firm would take on this project if Garida turns it down. How much should Garida reduce the NPV of this project if it discovered that this project would reduce one of its division’s net after-tax cash flows by $300 for each year of the four-year project?

$931

$559

$1,024

$698

Which one of the following can be termed as strategy development?

a. deciding on the sources of data for market research

b. planning to recover lost market share

c. choosing the right design for market research

d. none of the above

Product and channel decisions are made during which stage of the marketing planning process?

a. Implementation

b. Situation analysis

c. Strategy development

d. Marketing program development

1. Assume you were born 30 years ago. At that time, your grandparents opened an account for you and deposited $5,000. The account has earned an average of 9%, compounded annually.

1. What is the account balance today?
2. Using the information above, construct (calculate) a timeline of account values for each year 1 – 30. Be sure to use appropriate absolute and relative referencing.
3. Create a line graph depicting how the account balance grew from year to year. Be sure to include appropriate axis labels, legends, axis formats, and chart title.  

After months of study and spending $60,000 in researching its options, Black & Decker Company purchased and installed a made-to-order machine tool for fabricating parts for small appliances this morning. The machine cost $286,000. This afternoon, Square D Company offered a similar machine tool that will do exactly the same work, but costs only $176,000 and could be installed in less than two hours. There will be no differences in either revenues or operating costs between the machines. The only annual cash flow difference will be the income tax savings due to the depreciation tax shield.

Both machines will last for six years (don’t worry about the few hours that have elapsed). Black & Decker would depreciate either machine on a straight-line basis to a $15,000 salvage value for income tax purposes. However, each machine is expected to be worth $20,000 at the end of its useful life year. The relevant income tax rate is 40%, and Black & Decker earns sufficient income from its other operations so that it can utilize any annual operating losses or losses on disposal of equipment.

The after-tax discount rate, also known as the hurdle rate or MARR, is 16%.

Required:

Using after-tax cash flow analysis, determine the minimum resale value of the “old” machine tool (“old” because it was purchased this morning) that would justify Black & Decker’s purchase of the Square D machine tool at this time.

Hint: If Black & Decker could sell the “old” machine for $1,000,000 and buy the Square D machine, they would do it in a heartbeat. On the other hand, if they could sell the “old’ machine for only $1, they would not do it. Clearly, there is a selling price between $1 and $1,000,000 where it makes sense to sell the “old” machine -- find that value. If they sell the “old” machine, there will be income tax consequences at the time of the sale (time zero).

You are a financial analyst for a company that is developing a new resort in Hawaii and the firm is in the process of purchasing 10 gold carts to carry potential condominium buyers around the property. You are choosing between one made by Club Car or one made by Yamaha. The two carts are judged to be similar in utility, but the Club Car is made more durably and is expected to have an effective working life of 5 years, compared to 4 for the Yamaha. Your firm’s tax rate is 35% and the required rate of return on this investment is 8%. Either one would be deprecated over its useful life to a salvage value of zero. At the end of their effective life, the carts will be donated to a local school system and so will have zero estimated salvage value. Which cart should the firm purchase? The following information is available:

Club Car:

Purchase price: $22,000

Annual Maintenance Expense: $1,900

Salvage Value at Life End: $0

Yamaha:

Purchase price: $19,000

Annual Maintenance Expense: $2,100

Salvage Value at Life End: $0

when looking at PE ratios is it considered a better investment if the ratio matches similar industries?

I understand the PE ratio shows current investors demand for a company share and a high PE ratio generally indicates increased demand because investors anticipate earnings growth in the future so do we want to look at high ratios or low? why?

Your company has been approached by Detroit Motors to bid on supplying Detroit Motors with 61,500 tons of machine screws annually for five years. You will need an initial $1,880,000 to purchase threading equipment to get the project started. The accounting department estimates that the variable costs of production will be $250 per ton and that additional annual fixed costs of $575,000 will be required for the project.

For tax purposes you have a choice of either Straight-line (SL) or Modified Accelerated Cost Recovery System (MACRS) depreciation to a zero residual value over five years. However, you expect to be able to sell the used threading equipment for $220,000, net of dismantling costs, at the end of the fifth year. MACRS percentages for an asset with a five-year life are 20%, 32%, 19%, 11%, 10%, and 5%.

Given an applicable income tax rate of 40% (for all years) and an MARR (cost of capital or hurdle rate) of 16%, determine the lowest per ton selling price that you could offer to Detroit Motors so that you would meet your MARR requirements (and, possibly, outbid the competition).

Required:

a. In determining your lowest possible per ton selling price, which method of depreciation, SL or
MACRS, would you choose and WHY?

b. Regardless of your answer to part a, assume that you were to choose Straight-line depreciation for the threading equipment. Determine the lowest per ton bid price that will meet your
MARR requirements?

You got a well-paying job in Finance and took out a mortgage for your house. It is paid monthly. The amount you borrowed is $790,000, at a monthly rate of 0.5% for the next 30 years (360 months). 1 Use 0.5% as both the interest rate you are paying and the discount rate r.

-Show an amortization schedule if this loan had constant monthly payments. How much do you have to pay every month? Show how much of these payments is interest and how much is paying off the principal. Please show how to do this in excel

Both Bond Sam and Bond Dave have 8 percent coupons, make semiannual payments, and are priced at par value. Bond Sam has 4 years to maturity, whereas Bond Dave has 15 years to maturity.

If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Sam?

If interest rates suddenly rise by 5 percent, what is the percentage change in the price of Bond Dave?

If rates were to suddenly fall by 5 percent instead, what would the percentage change in the price of Bond Sam be then?

If rates were to suddenly fall by 5 percent instead, what would the percentage change in the price of Bond Dave be then?

Even though most corporate bonds in the United States make coupon payments semiannually, bonds issued elsewhere often have annual coupon payments. Suppose a German company issues a bond with a par value of €1,000, 14 years to maturity, and a coupon rate of 7 percent paid annually. If the yield to maturity is 11 percent, what is the current price of the bond?