Columbia Sportswear is an outdoor and active lifestyle apparel and footwear company. Assume that last year Columbia reported cost of goods sold of $941 million. This year, cost of goods sold was $1,146 million. Accounts payable was $174 million at the end of last year and $214 million at the end of this year.

Required:

1. For this year, compute the average number of days that Columbia's accounts payable are outstanding. (Assume 365 days in a year. Do not round intermediate calculations. Round your final answer to nearest whole number.)

Number of days______

You are a financial analyst for Loch Motor Company and have been asked to determine the impact of alternative depreciation methods. For your analysis, you have been asked to compare methods based on a machine that cost $206,000. The estimated useful life is 12 years, and the estimated residual value is $46,160. The machine has an estimated useful life in productive output of 222,000 units. Actual output was 31,000 in year 1 and 27,000 in year 2.

Required:

1. For years 1 and 2 only, prepare separate depreciation schedules assuming: (Do not round intermediate calculations and round your final answers to the nearest dollar amount.)

a. Straight-line method.

b. Units-of-production method.

c. Double-declining-balance method.

On April 23, Mrs. Y purchased a taxi business from Mr. M for a $58,000 lump-sum price. The business consisted of a two-year-old taxicab worth $18,560, Mr. M’s license to operate a taxi business in Baltimore, his list of regular customers, and his registered business name “On Time Any Time Taxi.” Mrs. Y operated the business from April 24 through the end of the year. Use Table 7-2.

1. Compute Mrs. Y’s taxable income from the taxi business if her taxable income before any cost recovery deductions was $37,100. Assume Mrs. Y wants to minimize taxable income.
2. Compute Mrs. Y’s taxable income from the taxi business if her taxable income before any cost recovery deductions was $17,800. Assume Mrs. Y wants to minimize taxable income without bonus depreciation.

Make a paragraph summarizing Andrew Jackson bank war

The common stock and debt of Southern Manufacturing are valued at $40 million and $40 million, respectively. Investors currently require a 15% return on the common stock and an 9% return on the debt. Suppose Southern Manufacturing issues an additional $20 million of common stock and uses this money to retire debt. Assume that the change in capital structure does not affect the risk of the debt and that there are no taxes.
What is the expected return on the stock after the change in capital structure ?
What is the weighted average cost of capital after the  change in capital structure ?

2. Two stocks A and B have return and risk information: E(rA) = 8%, E(rB) = 10%; aA = 12%, aB = 15%; pAB = 0.6. The two stocks are used to construct a minimum variance portfolio. Answer the following questions:

2.1. What is the weight of stock A of the minimum variance portfolio?

2.2. What is the expected return of the minimum variance portfolio?

2.3. What is the standard deviation of the minimum variance portfolio?

Use the following information to calculate the dollar cost of using a money market hedge to hedge 200,000 pounds of payables due in 180 days. Assume the firm has no excess cash. Assume the spot rate of the pound is $1.91 and the 180‑day forward rate is $2.00. The British interest rate is 0.07, and the U.S. interest rate is 0.04 over the 180‑day period.

Suppose that the index model for stocks A and B is estimated from excess returns with the following results:

RA = 3.5% + 0.65RM + eA

RB = -1.6% + 0.8RM + eB

σM = 21%; R-squareA = 0.22; R-squareB = 0.14

What is the covariance between each stock and the market index?

Allison and Leslie, who are twins, just received $40,000 each for their 24th birthday. They both have aspirations to become millionaires. Each plans to make a $5,000 annual contribution to her "early retirement fund" on her birthday, beginning a year from today. Allison opened an account with the Safety First Bond Fund, a mutual fund that invests in high-quality bonds whose investors have earned 8% per year in the past. Leslie invested in the New Issue Bio-Tech Fund, which invests in small, newly issued bio-tech stocks and whose investors have earned an average of 15% per year in the fund's relatively short history.

1. If the two women’s funds earn the same returns in the future as in the past, how old will each be when she becomes a millionaire? Do not round intermediate calculations. Round your answers to two decimal places.
   Allison:  
   Leslie:  

2. How large would Allison's annual contributions have to be for her to become a millionaire at the same age as Leslie, assuming their expected returns are realized? Do not round intermediate calculations. Round your answer to the nearest cent.

3. Is it rational or irrational for Allison to invest in the bond fund rather than in stocks?

Tolo Co. plans the following repurchases: $10.2 million in one year, nothing in two years, and $19.2 million in three years. After that, it will stop repurchasing and will issue dividends totaling $25.8 million in four years. The total paid in dividends is expected to increase by 3.1% per year thereafter. If Tolo has 2.4 million shares outstanding and an equity cost of capital of 10.9%, what is its price per share today? The stock price will be $ . (Round to the nearest cent.)

1. Your broker offers to sell you for $901.19 a 30-year, $1,000 face value Treasury bond with a 10% coupon rate. The bond pays interest annually. What is the yield to maturity, or expected rate of return, if you pay the asking price?

   		9%
   		10.19%
   		11.89%
   		11.15%
   		13.12%.

1 points   

QUESTION 15

1. What is the most that you would be willing to pay for the above bond if you require a rate of return of 12%?

   		$1,200
   		$1,100
   		$900.09
   		$838.90
   		$799.99.

Only b) in Excel please

Modern Designs is seeking to buy a new wire binding machine in order to improve the throughput of the system. Considerable research into machine suppliers has been conducted, and all except four suppliers have been eliminated from consideration. These include: Beauty Copper (BC), Copper Cut (CC), Advanced Wire (AW), and Wire Cosmetics (WC). The initial cost, maintenance cost and salvage value at year 10 of each machine are illustrated in the following table. i= 1%

a) Calculate the present value of each machine and determine the best economic alternative

b) In addition to economic value of each machine with the weight of 25%, Modern Designs has identified other factors. Each of the factors has been weighted in terms of its importance. Factors and weights are as follows:

Factor 1: Electricity Consumption Rate 20%

Factor 2: Machine Capacity 15%

Factor 3: Safety Features 15%

Factor 4: Delivery and Installation 10%

Factor 5: Return Policy 5%; and

Factor 6: Ease of Working with 10%.

The procurement department has researched and provided ratings on a 10-point maximum scale for each factor. These are given in the following table:

Use the weighted factor comparison method to determine the score for each of the potential machines.    

What is the imputed value, in dollars, for the differences in Electricity Consumption Rate, and Return policy between machines BC and CC?

Only Part c and d (Plan 3 & Plan 4) Using Excel only

J&J Cattle has purchased a quarter section of land for $160,000. They make a down payment of $20,000, and the remainder of the purchase price ($140,000) is financed at 11 percent compounded quarterly with quarterly payments over 2 years. Develop an Excel® table to illustrate the payment amounts and schedule for the loan, assuming payback follows

Plan 1: Pay the accumulated interest at the end of each interest period and repay the principal at the end of the loan period.

Plan 2: Make equal principal payments, plus interest on the unpaid balance at the end of the period.

Plan 3: Make equal end-of-period payments.

Plan 4: Make a single payment of principal and interest at the end of the loan period. A different plan: Pay off the principal per the table below. In addition, pay the accumulated interest at the end of each interest period.