Boston Engineering is analyzing two machines to determine which one it should purchase. Whichever machine is purchased will be replaced at the end of its useful life. The company requires a 12 percent rate of return and uses straight-line depreciation to a zero book value over the life of the machine. Machine A has a cost of $495,000, annual operating costs of $28,000, and a 3-year life. Machine B costs $302,000, has annual operating costs of $45,000, and a 2-year life. The firm currently pays no taxes. Which machine should be purchased and why?

Metallica Bearings, Inc., is a young start-up company. No dividends will be paid on the stock over the next 7 years because the firm needs to plow back its earnings to fuel growth. The company will pay a $5.96 per share dividend in 8 years and will increase the dividend by 0.05 per year thereafter. If the required return on this stock is 0.14, what is the current share price? Answer with 2 decimals

You buy 100 shares of stock at $20 per share on margin of 40 percent.  If the price of the stock rises to $40 per share, what is your percentage gain in equity?  Disregard interest costs.

PLEASE TYPE OUT

Why is customer service important between a salesperson and a client?

What do customer service is lacking in so many companies today?

explain in full detail

American​ Exploration, Inc., a natural gas​ producer, is trying to decide whether to revise its target capital structure. Currently it targets a 50-50 mix of debt and​ equity, but it is considering a target capital structure with 70​% debt. American Exploration currently has 5​% ​after-tax cost of debt and a 10​% cost of common stock. The company does not have any preferred stock outstanding.

a.  What is American​ Exploration's current​ WACC?

b.  Assuming that its cost of debt and equity remain​ unchanged, what will be American​ Exploration's WACC under the revised target capital​ structure?

c.  Do you think shareholders are affected by the increase in debt to 7070​%? If​ so, how are they​ affected? Are the common stock claims riskier​ now?

d.  Suppose that in response to the increase in​ debt, American​ Exploration's shareholders increase their required return so that cost of common equity is 14​%. What will its new WACC be in this​ case?

e.  What does your answer in part d suggest about the tradeoff between financing with debt versus​ equity?

Explain the benefits and limitations of using :

(1) Capital Asset Pricing Model to calculate cost of equity

(2) Dividend growth model to calculate cost of equity

(3) bond plus risk premium model to calculate cost of equity

Provide a well detail answer and no copy and paste.

Using the data in the table to the​ right, calculate the return for investing in the stock from January 1 to December 31. Prices are after the dividend has been paid.

What is the return for the entire period? Round two decimal places

Ross Textiles wishes to measure its cost of common stock equity. The​ firm's stock is currently selling for ​$48.96. The firm just recently paid a dividend of ​$4.05. The firm has been increasing dividends regularly. Five years​ ago, the dividend was just ​$2.96. After underpricing and flotation​ costs, the firm expects to net ​$45.53 per share on a new issue.

a.  Determine average annual dividend growth rate over the past 5 years. Using that growth​ rate, what dividend would you expect the company to pay next​ year?

b. Determine the net​ proceeds, Nn​, that the firm will actually receive.

c.  Using the​ constant-growth valuation​ model, determine the required return on the​ company's stock, r Subscript srs​, which should equal the cost of retained​ earnings, r Subscript rrr.

d.  Using the​ constant-growth valuation​ model, determine the cost of new common​ stock, r Subscript nrn.

Question #1: You are planning to save for retirement over the next 35 years. To do this, you will invest $900 per month in a stock account and $500 per month in a bond account. The return of the stock account is expected to be 11 percent, and the bond account will pay 7 percent. When you retire, you will combine your money into an account with a 8 percent return.

How much can you withdraw each month from your account assuming a 30-year withdrawal period? _____

14. Implied interest rate and period

Consider the case of the following annuities, and the need to compute either their expected rate of return or duration.

Joshua needed money for some unexpected expenses, so he borrowed $5,958.17 from a friend and agreed to repay the loan in six equal installments of $1,250 at the end of each year. The agreement is offering an implied interest rate of   .

Joshua’s friend, Willie, has hired a financial planner for advice on retirement. Considering Willie’s current expenses and expected future lifestyle changes, the financial planner has stated that once Willie crosses a threshold of $14,836,230 in savings, he will have enough money for retirement. Willie has nothing saved for his retirement yet, so he plans to start depositing $100,000 in a retirement fund at a fixed rate of 7.00% at the end of each year. It will take   years for Willie to reach his retirement goal.

Your company owns a piece of manufacturing equipment that requires a lot of maintenance. You estimate that the maintenance costs will be​ $750 next year​ (Year 1), and will increase by​ $250 each year until Year​ 8, at which point you will discard the equipment​ (after paying the maintenance costs for that year​ - there is a cash flow in Year​ 8). You want to know how much money you should put aside now to pay for this maintenance​ (the present value of the cash flows at Year​ 0), assuming an interest rate of​ 5% per year.

a. To solve for the present value in Year​ 0, you need to split the cash flows into two pieces. What are these​ pieces?

b. How much money do you need to put aside now to pay for the​ maintenance?

c. If you converted the maintenance costs into an equivalent uniform annual cost​ (an annuity) over the 8​ years, what would that annual cost​ be?

a. To solve for the present value in Year​ 0, you need to split the cash flows into two pieces. What are these​ pieces?

Piece​ 1:

A.

An annuity of​ $750 for 8 years

B.

An annuity of​ $500 for 8 years

C.

An annuity of​ $750 for 7 years

D.

An annuity of​ $700 for 7 years

Piece​ 2:

A.

A uniform gradient of​ $250 for 7 years

B.

A uniform gradient of​ $750 for 8 years

C.

A uniform gradient of​ $750 for 7 years

D.

A uniform gradient of​ $250 for 8 years

Kenny Enterprises has just issued a bond with a par value of $1,000​, a maturity of twenty​ years, and a coupon rate of 11.4% with semiannual payments. What is the cost of debt for Kenny Enterprises if the bond sells at the following​ prices?

a) $928

b) $1,000

c) $1,060.72

d) $1,131.49

Bill Clinton reportedly was paid $ 15.0 million to write his book My Life. The book took three years to write. In the time he spent​ writing, Clinton could have been paid to make speeches. Given his​ popularity, assume that he could earn $ 8.3 million per year​ (paid at the end of the​ year) speaking instead of writing. Assume his cost of capital is 9.5 % per year. a. What is the NPV of agreeing to write the book​ (ignoring any royalty​ payments)? b. Assume​ that, once the book is​ finished, it is expected to generate royalties of $ 4.9 million in the first year​ (paid at the end of the​ year) and these royalties are expected to decrease at a rate of 30 % per year in perpetuity. What is the NPV of the book with the royalty​ payments?