NOTE*** answer is not 91309.2 or 109154.41 or 110898.7 or 119875.42

Someone please get this question right only if you know you can, try to use excel or somthing

Strong Metals Inc. purchased a new stamping machine at the beginning of the year at a cost of $1,330,000. The estimated residual value was $70,000. Assume that the estimated useful life was five years and the estimated productive life of the machine was 300,000 units. Actual annual production was as follows:

Required:

1. Complete a separate depreciation schedule for each of the alternative methods.

a. Straight-line.

b. Units-of-production.

c. Double-declining-balance.

A 10-yr project has an initial cost of $300,000 for fixed assets. The fixed assets will be depreciated to a $0 book value using a 20-yr straight line depreciation method.

Each year, annual revenue is $30,000 and cost is $10,000.

After 10 years, you will terminate the project. You expect to sell the the fixed assets for $200,000.

The project is financed by 30% equity and 70% debt. The required rate of return on equity is 7% and the borrowing cost is 3%.

Assume the tax rate is 25%.

What is the project's NPV?

Group of answer choices

-14,735

5,027

11,405

25,229

A lender makes a loan for 125,000 at 7% interest for 30 years. The lender wants the loan to yield 8%. What origination fee should be charged to achieve an 8% yield?

11,662.81

11,250.00

12,500.00

10,780.34

QUESTION 17

1. Let a flexible exchange rate system. Assume a current account deficit of $100 billion. Then the capital account balance must be

QUESTION 18

1. Suppose the following direct quotes are received for spot and 1‑month French Francs in New York: 0.1260‑68, 4‑6. Then the outright 30‑day forward quote for the French is:

QUESTION 19

1. Suppose annual inflation rates in the U.S. and Mexico are expected to be 6.5% and 75%, respectively, over the next several years. If the current spot rate for the Mexican peso is $0.05, then the best estimate of the peso's spot value in 3 years is

QUESTION 20

1. The U.S. has imported more than it has exported every year for the last couple of decades. The persistent American trade deficits have been possible because the US has had a persistent surplus in the capital account.

True

False

Problem 11-13 More Portfolio Variance (LO4, CFA3)

The expected return and standard deviation of a portfolio that is 30 percent invested in 3 Doors, Inc., and 70 percent invested in Down Co. are the following:

What is the standard deviation if the correlation is +1? 0? −1? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. )

Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project:

The company has a 40% tax rate, and its WACC is 11%.

Write out your answers completely. For example, 13 million should be entered as 13,000,000.

1. What is the project's cash flow for the first year (t = 1)? Round your answer to the nearest dollar.
   $
2. 
   
3. If this project would cannibalize other projects by $1.5 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar.
   The firm's project's cash flow would now be ________
4. 
   
5. Ignore part b. If the tax rate dropped to 35%, how would that change your answer to part a? Round your answer to the nearest dollar.
   The firm's project's cash flow would -Select- increase/ decrease Item 3 by __________

Asset K has an expected return of 21 percent and a standard deviation of 36 percent. Asset L has an expected return of 9 percent and a standard deviation of 20 percent. The correlation between the assets is 0.45. What are the expected return and standard deviation of the minimum variance portfolio? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 13 percent, and that the maximum allowable payback and discounted payback statistics for your company are 2.5 and 3.0 years, respectively.

Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.)

The Metchosin Corporation has two different bonds currently outstanding. Bond M has a face value of $70,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $2,800 every six months over the subsequent eight years, and finally pays $3,100 every six months over the last six years. Bond N also has a face value of $70,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. The required return on both these bonds is 10% compounded semiannually, what is the current price of bond M and bond N?

In Year 2 a new product is forecast to generate Earnings before Depreciation and Taxes of $30,000. Depreciation Expense associated with the product is $8,000. The company’s tax rate is 30%. Compute the after-tax cash flow for Year 2 using both the Income Statement and Tax Shield methods and show you arrive at the same result.

Acme Inc. may replace an old machine with a new, more efficient model. The old machine was purchased 5 years ago for $96,000. It is being depreciated over 8 years to zero book value using the straight-line method. Its current book value is $36,000. Its current market value is $30,000. The new machine costs $180,000. It will be depreciated over 6 years to zero book value using the straight-line method. After its useful life of 10 years it is expected to have a scrap value of $50,000. The new machine will increase Earnings before Depreciation and Taxes by $40,000 per year for 10 years. The company’s tax rate is 30% and the appropriate discount rate for this project is 10%. List all 11 after-tax cash flows for this project (0 is the initial investment). Compute the NPV. Compute the IRR and payback.

A company is considering producing long telephoto zoom lens, iLongLens, attachment for the iPhone 5. The initial investment for this project will be $3 million. This amount is for depreciable equipment, which will be depreciated over 5 years using the straight-line method to zero book value. The iLongLens is expected to generate Earnings before Depreciation and Taxes of $1.5 million per year for 6 years. At the end of the sixth year the equipment will be scrapped for $300,000. The company’s tax rate is 40% and the appropriate discount rate for this project is 15%.  

1. List all 7 after-tax cash flows for this project (0 is the initial investment).  

2. Compute the NPV.

3. Compute the IRR and payback.

Compute the Equivalent Annual Cost for the two machines described below. Assume that both do identical jobs, both will be depreciated over their useful lives using the straight line method to zero salvage value, will have zero scrap value at the end of their useful lives. Use a 10% discount rate and a 30% tax rate. Machine A Useful life 8 years Initial cost $80,000 Annual operating costs $6,500 after-tax Machine B Useful life 5 years Initial cost $35,000 Annual operating costs $8,200 after-tax