what is the relationship/linkage among the balance sheet, Income statement and statement of cash flows? (How these 3 fiancial statements linked?)

write a paragraph

Question 1 (1 point)

Quick Sale Real Estate Company is planning to invest in a new development. The cost of the project will be $23 million and is expected to generate cash flows of $14,000,000, $11,750,000, and $6,350,000 over the next three years. The company's cost of capital is 20 percent. What is the internal rate of return on this project? (Round to the nearest percent.)

Question 1 options:

Question 2 (1 point)

Muncy, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $815,322, $863,275, $937,250, $1,017,612, $1,212,960, and $1,225,000 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment? Round to two decimal places.

Your Answer:

Question 2 options:

Question 3 (1 point)

Given the following cash flows for a capital project, calculate the IRR using a financial calculator

Question 3 options:

Question 4 (1 point)

An investment of $83 generates after-tax cash flows of $40.00 in Year 1, $64.00 in Year 2, and $129.00 in Year 3. The required rate of return is 20 percent. The net present value is

Round to two decimal places.

Your Answer:

Question 4 options:

Question 5 (1 point)

Cortez Art Gallery is adding to its existing buildings at a cost of $2 million. The gallery expects to bring in additional cash flows of $520,000, $700,000, and $1,000,000 over the next three years. Given a required rate of return of 10 percent, what is the NPV of this project?

Question 5 options:

Question 6 (1 point)

Which ONE of the following statements about the payback method is true?

Question 6 options:

Question 7 (1 point)

McKenna Sports Authority is getting ready to produce a new line of gold clubs by investing $1.85 million. The investment will result in additional cash flows of $525,000, $847,500, and $1,215,000 over the next three years. What is the payback period for this project? Round to four decimal places.

Your Answer:

Question 7 options:

Question 8 (1 point)

Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project?

Year Project

0 ($11,368,000)

1 $ 2,157,589

2 $ 3,787,552

3 $  3,125,650

4 $ 4,115,899

5 $ 4,556,424

Round to two decimal places.

Your Answer:

Question 8 options:

Lucinda Diamanti is 10 years old today (August 15th) and while all she’s interested in is her new bike, her parents Mr. & Mrs. Diamanti are considering how they will pay for her college education beginning in 8 years. They decide to set up a meeting with their financial adviser Cindy Morgan to discuss an education savings plan. During the meeting, the Diamanti’s inform Cindy that they have $8,000 they can use to begin the savings plan, and from what they can determine, Lucinda will require 4 years to complete her undergraduate degree in molecular biology. Cindy consults a reputable college reference to see that tuition costs are currently estimated at $32,000 per year and are expected to grow at 4% each year for the foreseeable future. The Diamanti’s are concerned that they won’t have enough money and ask Cindy how to make sure they have enough to completely pay for Lucinda’s undergraduate education. The Diamanti’s inform Cindy that they want to make deposits into the education savings plan on an annual basis until Lucinda’s first year in college at which point they will stop making contributions. Cindy tells them they can earn 8% annual interest on their savings plan. Your job to answer the following two questions (You may assume there are 8 years between today and the beginning of Lucinda’s first day in college): Assuming the estimates on tuition costs are correct, how much money needs to be in the account when Lucinda begins college in 8 years to fund 4 years of college?

You own a bond that pays ​$100 in annual​ interest, with a ​$ 000 par value. It matures in 15 years. Your required rate of return is 12 percent.

a. Calculate the value of the bond.

b. How does the value change if your required rate of return​ (1) increases to 15 percent or​ (2) decreases to 6 ​percent? c. Explain the implications of your answers in part b as they relate to interest rate​ risk, premium​ bonds, and discount bonds.

d. Assume that the bond matures in 5 years instead of 15 years. Recompute your answers in part b.

e. Explain the implications of your answers in part d as they relate to interest rate​ risk, premium​ bonds, and discount bonds.

f. If your required rate of return is 12 percent, what is the value of the​ bond?

Please describe the meaning of diversification. How does diversification reduce risk for the investor?

What is the opportunity cost of capital? How can a company measure opportunity cost of capital for a project that is considered to have average risk?

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 $ 8.5 million per year​ (paid at the end of the​ year) speaking instead of writing. Assume his cost of capital is 9.3 % 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 $ 4.8 million in the first year​ (paid at the end of the​ year) and these royalties are expected to decrease at rate of 30 % per year in perpetuity. What is the NPV of the book with the royalty​ payments?

Charlene is evaluating a capital budgeting project that should last for 4 years. The project requires $775,000 of equipment. She is unsure what depreciation method to use in her analysis, straight-line or the 3-year MACRS accelerated method. Under straight-line depreciation, the cost of the equipment would be depreciated evenly over its 4-year life (ignore the half-year convention for the straight-line method). The applicable MACRS depreciation rates are 33%, 45%, 15%, and 7%. The company's WACC is 12%, and its tax rate is 30%.

1. What would the depreciation expense be each year under each method? Round your answers to the nearest cent.
   

   Year	Scenario 1 (Straight-Line)	Scenario 2 (MACRS)
   1	$	$
   2
   3
   4

2. Which depreciation method would produce the higher NPV?
   -Select-Straight-LineMACRSItem 9
   
   How much higher would the NPV be under the preferred method? Round your answer to two decimal places. Do not round your intermediate calculations.

Describe why would some companies consider global branding while other companies prefer to have local brands

Grupo​ Bimbo, headquartered in Mexico​ City, is one of the largest bakery companies in the world. On January​ 1st, when the spot exchange rate is Ps 10.83 divided by $​, the company borrows $25.1 million from a New York bank for one year at 6.77 % interest​ (Mexican banks had quoted 9.62 % for an equivalent loan in​ pesos). During that​ year, U.S. inflation is 2.2 % and Mexican inflation is 4.7 %. At the end of the year the firm repays the dollar loan.

a. If Bimbo expected the spot rate at the end of one year to be equal to purchasing power​ parity, what would be the cost to Bimbo of its dollar loan in​ peso-denominated interest?

b. What is the real interest cost​ (adjusted for​ inflation) to​ Bimbo, in​ peso-denominated terms, of borrowing the dollars for one​ year, again assuming purchasing power​ parity?

c. If the actual spot rate at the end of the year turned out to be Ps 9.66 divided by $​, what was the actual​ peso-denominated interest cost of the​ loan?

Stock A: E (R) = 9%, STD DEVIATION =36%

Stock B : E (R) = 15%, STD DEVIATION =62%

1. Calculate the expected return of a portfolio that is composed of 35% of a stock A and 65% of stock B

2. calculate the std deviation of this portfolio when the correlation coefficient between the returns is 0.5

3. calculate the std deviation of this portfolio same weights in each stock when the correlation coefficient is now -0.5

4. how did the changes in the correlation between the returns on A and B affect the std deviation of the portfolio?

A 5-year Treasury bond has a 4.75% yield. A 10-year Treasury bond yields 6.05%, and a 10-year corporate bond yields 9.45%. The market expects that inflation will average 2.25% over the next 10 years (IP₁₀ = 2.25%). Assume that there is no maturity risk premium (MRP = 0) and that the annual real risk-free rate, r*, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury securities: DRP = LP = 0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below.

Open spreadsheet

What is the yield on this 5-year corporate bond? Round your answer to two decimal places.

_____%

  Calculate the value of each of the bonds shown in the following​ table, all of which pay interest semiannually.

Bond   Par Value   Coupon interest rate   Year to maturity   Required stated annual return
A   500   7%   8   9%
B   1,000   12   20   14
C   500   16   5   13

The value of bond A is

The value of bond B is

The value of bond C is

how do i figure yield on the following 3-year bond 2 years, 2 yr bond 3 years, 4 yr bond 3yrs and 5-year bond 2 years forward using this information? Please, may I have the answers and how to input them into excel to achieve the correct answer? I have tried a few ways that I thought the professor said to do and they are not yielding any results. Thank You

Maturity Yield

1 yr 2.0 %

2 Yr 2.20 %

3yr 3.40 %

4 yr 4.50%

5yr 5.00 %

6yr 5.0%

7 yr 5.20 %

8 yr 5.40

9 yr 5.50 %

10 5.50%

REPLACEMENT ANALYSIS

The Bigbee Bottling Company is contemplating the replacement of one of its bottling machines with a newer and more efficient one. The old machine has a book value of $550,000 and a remaining useful life of 5 years. The firm does not expect to realize any return from scrapping the old machine in 5 years, but it can sell it now to another firm in the industry for $265,000. The old machine is being depreciated by $110,000 per year, using the straight-line method.

The new machine has a purchase price of $1,100,000, an estimated useful life and MACRS class life of 5 years, and an estimated salvage value of $120,000. The applicable depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. It is expected to economize on electric power usage, labor, and repair costs, as well as to reduce the number of defective bottles. In total, an annual savings of $250,000 will be realized if the new machine is installed. The company's marginal tax rate is 35%, and it has a 12% WACC.

1. What initial cash outlay is required for the new machine? Round your answer to the nearest dollar. Negative amount should be indicated by a minus sign.
   $
   
2. Calculate the annual depreciation allowances for both machines and compute the change in the annual depreciation expense if the replacement is made. Round your answers to the nearest dollar.

   Year	Depreciation Allowance, New	Depreciation Allowance, Old	Change in Depreciation
   1	$	$	$
   2
   3
   4
   5

3. What are the incremental net cash flows in Years 1 through 5? Round your answers to the nearest dollar.

   Year 1	Year 2	Year 3	Year 4	Year 5
   $	$	$	$	$

4. Should the firm purchase the new machine?
   -Select-YesNoItem 22
   
   Support your answer. The input in the box below will not be graded, but may be reviewed and considered by your instructor.
   
5. In general, how would each of the following factors affect the investment decision, and how should each be treated?
   1. The expected life of the existing machine decreases.

   The input in the box below will not be graded, but may be reviewed and considered by your instructor.

   2. The WACC is not constant, but is increasing as Bigbee adds more projects into its capital budget for the year.

   The input in the box below will not be graded, but may be reviewed and considered by your instructor.