The mean cost of domestic airfares in the United States rose to an all-time high of $380 per ticket. Airfares were based on the total ticket value, which consisted of the price charged by the airlines plus any additional taxes and fees. Assume domestic airfares are normally distributed with a standard deviation of $120.

a. What is the probability that a domestic airfare is $530 or more (to 4 decimals)?

b. What is the probability that a domestic airfare is $260 or less (to 4 decimals)?

c. What if the probability that a domestic airfare is between $310 and $470 (to 4 decimals)?

d. What is the cost for the 3% highest domestic airfares? (rounded to nearest dollar)

What are some expectations from auditors when entities face economic difficulties? Support your answer with some examples.

A. use any data source to find the annual cash dividend. if any. paid by the company in each of the past five calendar years.
B. find the closing price of the stock for 6 years
C. calculate the return for each of the five one year periods
D. create a graph that shows the return on an x and y axis.
E. estimate the return for the coming year and explain why.
use the company PepsiCo

show all work

The following prices are available for call and put options on a stock priced at $50. The risk-free rate is 6 percent and the volatility is 0.35. The March options have 90 days remaining and the June options have 180 days remaining. The Black-Scholes model was used to obtain the prices.

long box spread using the June 50 and 55 option

What is the profit if the stock price at expiration is $52.50?

Problem 9.22

You own a company that competes with Old World DVD Company. Instead of selling DVDs, however, your company sells music downloads from a Web site. Things are going well now, but you know that it is only a matter of time before someone comes up with a better way to distribute music. Your company just paid a $1.50 per share dividend, and you expect to increase the dividend 10 percent next year. However, you then expect your dividend growth rate to begin going down—to 5 percent the following year, 2 percent the next year, and to -3 percent per year thereafter. Based upon these estimates, what is the value of a share of your company’s stock? Assume that the required rate of return is 12 percent. (Round dividends in intermediate calculations to 4 decimal places, e.g. 1.5325 and final answer to 2 decimal places, e.g. 15.25.)

Today Stock A is worth $25 and has 1000 shares outstanding. Stock B costs $30 and has 500 shares outstanding. Stock C is priced at $50 per share and has 1200 shares outstanding. If tomorrow Stock A is priced at $22, Stock B at $35, and Stock C is worth $48, what would the value-weighted index amount equal? (The index has a base period value of 100.)

What are some of the weaknesses behind risk-based capital standards? ( 250 words or less).

the answers need to be shown in a timeline as well as the answer in #5

=Future value*rate/((1+rate)^t-1)5. You want to buy a boat in 5 years and need to have $8,000 available to use as a down payment. How much would you need to save each year to reach that goal and your money will earn 9%? H

=Future value*rate/((1+rate)^t-1)

=8000*9%/(1.09^5-1)
=1336.739656

6. Refer to #5. Instead of saving each year, you want to save each month to reach your desired $8,000. Assume the same rate and term as above. Note: you cannot divide your answer to #5 by 12.

7. Sandy is buying a car and wants to get a loan of $8,000. If the rate is 6% and term is 5 years, what would the monthly payments be?

8. Diane is going to save $300 every 6 months (twice a year) for 10 years. If the rate is 8%, how much will she have?

9. Ken is going to save $300/month for 10 years, but will start TODAY. If the rate is 8%, how much will he have?   Note the difference in your answer to this problem from #8. Explain WHY is there a difference in your answers?

10. Uncle Guido wants to give you a gift. He tells you he will write a check to you of $1500 in 1 year, $2,600 in year 2 and $3,000 in year 3.   How much does Guido have to set aside now in order to have sufficient funds to write all of those checks? Assume a 10% rate.

11. You get a loan of $100,000 for 10 year term. If the payments are $1,801.85/month, what is the interest rate on this loan (remember all rates are always quoted as annual figures)? Hint: set up timeline and determine which type of TVM problem it resembles. Then solve.

12. Carla will give $200 to you every three months for 10 years (4x per year). At year 10 she will also give $10,000 to you. What amount of money must be available in her bank account in order for her to have enough money to meet her promise. The rate is 12%. Hint: this problem is a combination of 2 types of TVM problems. Your final answer is the sum of the two.

13. Brett has contract that will pay him $10,000 at the end of 5 years. Brett wants money now and not in 5 years, so he is willing to have contract signed over to you (so you would receive that money) if you give him some money today. If you require a 12% interest rate on money you lend to friends. What is the maximum amount you would you be willing to pay for this contract?

How does the creation of a portfolio reduce risk? What type of assets should be included in a diverse portfolio? Why should they be included?

How important is it that an organization have an exclusive right to exercise a real option? That is, can we really say that an option being considered has value if competitors may exercise it also?

Consider a project to supply 106 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $1,735,000 five years ago; if the land were sold today, it would net you $1,810,000 aftertax. The land can be sold for $1,754,000 after taxes in five years. You will need to install $5.65 million in new manufacturing plant and equipment to actually produce the stamps; this plant and equipment will be depreciated straight-line to zero over the project’s five-year life. The equipment can be sold for $715,000 at the end of the project. You will also need $605,000 in initial net working capital for the project, and an additional investment of $56,000 in every year thereafter. Your production costs are .54 cents per stamp, and you have fixed costs of $1,110,000 per year. If your tax rate is 22 percent and your required return on this project is 8 percent, what bid price should you submit on the contract? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., 32.16161.)

Home Place​ Hotels, Inc., is entering into a​ 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that​ time, but when it is​ complete, it should allow the company to enjoy much improved growth in earnings and dividends. Last​ year, the company paid a dividend of ​$4.80. It expects zero growth in the next year. In years 2 and​ 3, 4​% growth is​ expected, and in year​ 4, 17​% growth. In year 5 and​ thereafter, growth should be a constant 12​% per year. What is the maximum price per share that an investor who requires a return of 18​% should pay for Home Place Hotels common​ stock?

The maximum price per share that an investor who requires a return of 18% should pay for Home Place Hotels common stock is​____

(a) NPV at the end of the project (discount rate 15%)

(b) IRR at the end of the project.