Sales                                           153,000

Costs                                            81,900

Other Expenses                        5,200

Depreciation                           10,900

Interest Expense                      8,400

Taxes                                            16,330

Dividends                                    7,200

New Equity                                 2,600

Redeemed LT Debt                 3,900

What is the operating cash flow?

What is the cash flow to creditors?

What is the cash flow to stockholders?

If net fixed assets increased by $20,250 during the year, what was the addition to NWC?

Name the three financial statements and answer both questions below for all three financial statements.

What is the goal of each statement? What can you tell from it?

How does each statement help tell the story?

Happy Hospital has the following financial statements:

Using the information given above, calculate the following ratios:

[Round your numbers to TWO decimal places]

(A) Return on Equity:

(B) Total Margin:

(C) Total Asset Turnover: .

(D) Equity Multiplier:

Suppose you are given the yield curve as follows:

i₁ = 2%; i₂ = 3%; i₃ = 4%; i₄ = 5%. i₅ = 7%, i₁₀ = 10%. These represent the 1-year, 2-year, 3-year and 4-year, 5-year, 10-year bond yields today. Under the pure expectations theory, find a) the expected future one-year rates that will prevail from year 1 to year 2 b) from year 2 to year 3; & c) from year 3 to year 4.

Discuss how financial advisors use the shape of the curve in above questions as part of investment advice.

?

FOREIGN CAPITAL BUDGETING Sandrine Machinery is a Swiss multinational manufacturing company. Currently, Sandrine’s financial planners are considering undertaking a 1-year project in the United States. The project’s expected dollar-denominated cash flows consist of an initial investment of $2,000 and a cash inflow the following year of $2,400. Sandrine estimates that its risk-adjusted cost of capital is 10%. Currently, 1 U.S. dollar will buy 0.96 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding 3%, while similar securities in Switzerland are yielding 1.50%. a. If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? b. What is the expected forward exchange rate 1 year from now? c. If Sandrine undertakes the project, what is the net present value and rate of return of the project for Sandrine? below is the table given by instructor to use for this problems.

Class: A direct quote is the foreign exchange rate stated in terms of the domestic currency per unit of the foreign currency. In the U.S., a direct quote for the Canadian dollar would be US$0.82 = C$1. Conversely, in Canada, a direct quote for U.S. dollars would be C$1.22 = US$1.

Using the interest rate parity theorem, the one-period forward exchange rate is calculated using the spot rate (stated as a direct quote) and the interest rate forecasted for the two countries in the period ahead.

If the Japanese yen is the home currency and the U.S. dollar is the foreign currency and the one-year interest rate in Japan is 1% and in U.S. is 2%, the one-year forward exchange rate (direct quote) in Japan is given by

The spot rate (yen/$1) x [(1 + Japanese interest rate)/(1 + U.S. interest rate)]

If the spot rate is 100 yen/ US $ then we have 100yen/$1 x [(1+1%)/(1+2%)

= 100 x [(1.01)/(1.02)] = 100 x 0.9902 = 99.02 yen/$ 1

An initial investment in the U.S. of $100,000 = 100,000 x 100 yen = 10,000,000 yen

If the one-year cash inflow is $125,000

The yen equivalent is 125,000 x 99.02 = 12,377,500 yen

You can then calculate the NPV and rate of return with the information of cash outflows and inflows in yen.

St. Elsewhere buys $30 million in medical supplies from Knight Rider Industries (KRI). KRI offers St. Elsewhere terms of 3/10, net 50. Currently the hospital is paying KRI on day 10. Assume 365 days in a year.

(A) What is the total trade credit available from KRI? $

(B) What is the amount of the costly trade credit? $

(C) Should the hospital continue to pay on day 10, or take the costly credit? Assume the hospital can get a bank loan at 9 percent.

1. Yes, keep paying on day 10

2. No, replace with costly credit

​(Real options and capital budgeting​) You have come up with a great idea for a​ Tex-Mex-Thai fusion restaurant. After doing a financial analysis of this​ venture, you estimate that the initial outlay will be $5.6 million. You also estimate that there is a 50 percent chance that this new restaurant will be well received and will produce annual cash flows of $780,000 per year forever​ (a perpetuity), while there is a 50 percent chance of it producing a cash flow of only $200,000 per year forever​ (a perpetuity) if it​ isn't received well.

a. What is the NPV of the restaurant if the required rate of return you use to discount the project cash flows is 11 ​percent?

b. What are the real options that this analysis may be​ ignoring?

c. Explain why the project may be worthwhile even though you have just estimated that its NPV is​ negative?

***PLEASE, ONLY ANSWER THIS QUESTION IF YOU KNOW HOW TO DO IT AND PLEASE BE AS DETAILED AS POSSIBLE.***

Consider a stock that plans to pay a dividend in year of 4$. The dividends will increase from that point forward permanently at a rate of 2% per year. The required return is 14%.

a. What is the stock price today, in two years, and in 16 years?

b. What are the dividend yield and capital gains yield for this stock this year, in two years, and in 16 years?

Thank you.

Forecasted Statements and Ratios

Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Upton's balance sheet as of December 31, 2016, is shown here (millions of dollars):

Sales for 2016 were $350 million and net income for the year was $10.5 million, so the firm's profit margin was 3.0%. Upton paid dividends of $4.2 million to common stockholders, so its payout ratio was 40%. Its tax rate was 40%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2017. Do not round intermediate calculations.

1. If sales are projected to increase by $50 million, or 14.29%, during 2017, use the AFN equation to determine Upton's projected external capital requirements. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
   $ million
   
2. Using the AFN equation, determine Upton's self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? Round your answer to two decimal places.
   %
   
3. Use the forecasted financial statement method to forecast Upton's balance sheet for December 31, 2017. Assume that all additional external capital is raised as a line of credit at the end of the year and is reflected (because the debt is added at the end of the year, there will be no additional interest expense due to the new debt).
   Assume Upton's profit margin and dividend payout ratio will be the same in 2017 as they were in 2016. What is the amount of the line of credit reported on the 2017 forecasted balance sheets? (Hint: You don't need to forecast the income statements because the line of credit is taken out on last day of the year and you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2017 addition to retained earnings for the balance sheet without actually constructing a full income statement.) Round your answers to the nearest cent.

   Upton Computers Pro Forma Balance Sheet December 31, 2017 (Millions of Dollars)
   Cash	$
   Receivables	$
   Inventories	$
   Total current assets	$
   Net fixed assets	$
   Total assets	$
   Accounts payable	$
   Notes payable	$
   Line of credit	$
   Accruals	$
   Total current liabilities	$
   Mortgage loan	$
   Common stock	$
   Retained earnings	$
   Total liabilities and equity	$

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.)