Develop a 1,050-word evaluation describing business structure and financial statements, including the following:

• Identify and describe the legal categories of a business organization contrasting tax-related advantages and disadvantages.
• Next, using your entrepreneur skills, consider starting your own business. What business structure would you choose and why?
• Discuss financial statements for the chosen business structure, then explain with specific examples from the University Library, how these would help you make decisions about your business.

The loan term is 15 years, the payments are made monthly, the loan amount is $3,000,000 and the interest rate is 8.25% APR.

A. Create an amortization schedule for the following loan.

B. What are the totals over the loan term for the interest? Principal? Total payments?

C. What is the total principal payment during the 4^th year (i.e. year 4 only!) of the loan?

You have just received a windfall from an investment you made in a​ friend's business. She will be paying you

$ 36 comma 678$36,678

at the end of this​ year,

$ 73 comma 356$73,356

at the end of next​ year, and

$ 110 comma 034$110,034

at the end of the year after that​ (three years from​ today). The interest rate is

13.9 %13.9%

per year.

a. What is the present value of your​ windfall?

b. What is the future value of your windfall in three years​ (on the date of the last​ payment)?

1. Discuss the differences between horizontal, vertical and ratio analysis?

2. What are three major reasons to hold cash in an organization?

1. Briefly, describe the nature and use of the following corporate planning tools:
   1. Values statement
   2. Mission statement
   3. Vision statement
   4. Organizational goals
   5. Organizational objectives
2. What are some of the budget types used within health services organizations? Briefly describe the purpose and use of each.

Describe what kind of compensation is permissible for an independent director based on the SEC and Dodd-Frank Act guidelines.

State the difference between an insider and a control person for purposes of liability under the Securities Act of 1933, including how they are different. State whether all insiders are control persons, and whether all control persons are insiders. Provide examples of when they are the same and when they are different.

Smallville Bank has the following balance sheet, rates earned on its assets, and rates paid on its liabilities.

If the bank earns $121,000 in noninterest income, incurs $81,000 in noninterest expenses, and pays $2,510,000 in taxes, what is its net income? (Enter your answer in dollars, not thousands of dollars.)

Summer Tyme, Inc., is considering a new 3-year expansion project that requires an initial fixed asset investment of $3.726 million. The fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value (salvage value) of $289,800. The project requires an initial investment in net working capital of $414,000. The project is estimated to generate $3,312,000 in annual sales, with costs of $1,324,800. The tax rate is 35 percent and the required return on the project is 9 percent.

Required:

What is the project's year 0 net cash flow (or cash flow from assets)?

What is the project's year 1 net cash flow (or cash flow from assets)?

What is the project's year 2 net cash flow (or cash flow from assets)?

What is the project's year 3 net cash flow (or cash flow from assets)?

What is the NPV?

Ginny is endowed with $ 8million and is deciding whether to invest in a restaurant. Assume perfect capital markets with an interest rate of 6%.

1. List 4 perfect capital market assumptions.

1.   ______________________________      2.   ______________________________

3.   ______________________________ 4.   _______________________________

2. Which investment option should Ginny choose?

3. Which investment option can be eliminated from consideration? Why?

Ginny is actively pursuing another business venture as a ticket scalper. She estimates that for a $2 million investment in inventory she can resell her tickets for $6 million over the next two years (cash flows realized in exactly two years). Assume the same 6% interest rate.

4. What is the NPV of the Ticket Brokering venture?

5. What is the new value of Ginny’s Corporation?

6. Suppose Ginny does not have the $2 million to start the new venture. Instead, she wants to raise equity capital by issuing 100,000 shares. What price will new investors be willing to pay?

Total acquisition price: $3,200,000

• Property consists of eight office suits, three on the first floor and five on the second
• Contract rents: two suits at $4,800 per month, one at $5,600 per month, and five at $2,200 per month
• Annual market rent increase: 3.0% per year
• Vacancy and collection losses: 5% per year
• Operating expenses: 25% of effective gross income each year.
• Capital expenditures: 6% of effective gross income each year.
• Expected holding period: 5 years.
• Expected selling price NOI capitalized at 6.75%.
• Selling expense in year 5:0% of the sale price
• Mortgage financing assumptions:
• First mortgage loan: (75% LTV).
• Annual mortgage interest rate: 6.25%
• Loan term and amortization period: 30 years.
• Total up-font financing costs: 1.75% of loan amount.
• Discount Rate: 10%

Questions You Need to Answer

What is the going in cap rate?

What is the NOI for year five?

What is the selling price after the five year hold?

What is loan balance at sale?

What is the NPV for this project?

What is the IRR for this project?

What is the DCF for this project—(note BTCF)?

What is reversion amount?

*Make sure to show your work in the Excel file (provide excel equations as well).

“Good leaders are not necessarily good managers, and good managers are not necessarily good leaders.” (Kinicki text, p. 327) Most people confuse leadership and management. We have learned that leadership and management are different skills. Demonstrate that you understand the difference in this case study.

Think of someone you know personally (not a public figure), and consider to be a good leader..

1. Table 10.1 on page 326 of your text summarizes the many theories used to understand good leadership. Select one theory you believe best explains this person’s leadership. (Select from theories listed in approaches 2-7, but not Trait Approaches (1).) Provide examples to support your choice of theory. Explain all aspects of the theory as they relate to this person.

Consider a 2-year bond with a principal of $100 that provides coupons at the rate of 3.8% per annum semiannually. Suppose the yield on this bond is 6.1% per annum with continuous compounding.

(a) What is the duration of this bond?

(b) Suppose the yield on this bond increases by 0.1%.

i. Calculate the new bond price exactly.

ii. Estimate the new bond price approximately using duration.

A US airline company will purchase 400,000 gallons of jet fuel after one month and the company wants to

do cross hedging using heating oil futures. The standard deviation of monthly changes in the spot price of

jet fuel is (in cents per gallon) 300; the standard deviation of monthly changes in the futures price for the

heating oil futures contract is (in cents per gallon) 407. The coefficient of correlation between the jet fuel

price changes and the futures price changes is 0.75. Each heating oil futures contract is for delivery of 2,000

gallons of heating oil. The current spot price of jet fuel is $1.55 per gallon and the futures price of heating oil is

$1.97 per gallon. What is the optimal number of contracts with tailing adjustment?

Question 1:

a. Your company is planning to borrow $2.5 million on a 3-year, 8%, annual payment, fully amortized term loan. What fraction of the payment made at the end of the second year will represent repayment of principal? Round your answer to two decimal places.

b. Assume that your aunt sold her house on December 31, and to help close the sale she took a second mortgage in the amount of $40,000 as part of the payment. The mortgage has a quoted (or nominal) interest rate of 10%, but it calls for payments every 6 months, beginning on June 30, and is to be amortized over 15 years. Now, 1 year later, your aunt must inform the IRS and the person who bought the house about the interest that was included in the two payments made during the year. (This interest will be income to your aunt and a deduction to the buyer of the house.) To the closest dollar, what is the total amount of interest that was paid during the first year?

The Walt Disney Company just issued $195,000 of perpetual 9% debt and used the proceeds to

repurchase stock. The company expects to generate $83,000 of EBIT in perpetuity. The company

distributes all its earnings as dividends at the end of each year. The firm’s unlevered cost of

capital is 15 percent, and the corporate tax rate is 40 percent.

a. What is the value of the company as an unlevered firm?

b. Use the APV method to calculate the value of the company with leverage.

c. What is the required return on the firm’s levered equity assuming a debt-to-equity ratio of

0.9070?

d. Use the FTE method to calculate the value of the company’s equity.