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.   

Explain the key ideas to be kept in mind before moving from part-time to full-time entrepreneurship.

True or false

1. The earnings multiple approaches are based on the notion that you want to replace a stream of annual income that's lost due to the death of a breadwinner.
2. An advantage of term insurance is that the cost falls each time the policy is renewed.
3. Term life insurance provides protection for a specified amount of time; typically, 1-30 years.
4. Cash-value insurance is any policy that provides both a death benefit and an opportunity to accumulate cash value.
5. One of the provisions of the Affordable Care Act is to prevent insurance companies from offering coverage to consumers with preexisting conditions.
6. Most major health care policies cover hospital, surgical, and physician coverages.
7. Group insurance premiums are generally more expensive than individual policies with the same coverage.
8. Your insurance's copayment and deductible are the expenses that the insured must pay before the insurance company will pay any benefits.
9. Long-term care insurance provides money to help pay for nursing home and home health care expenses

ALL OF THEM PLEASE!!!

A company is going public at $20 and will use the ticker XYZ. The underwriters will charge a 7 percent spread. The company is issuing 16 million shares, and insiders will continue to hold an additional 32 million shares that will not be part of the IPO. The company will also pay $2.5 million of audit fees, $3.5 million of legal fees, and $900,000 of printing fees. The stock closes the first day at $23. What are the total costs of going public for XYZ as a percentage of the total pre-cost equity value? In calculating the pre-cost equity value, use the closing price of the stock at the end of the first day as the pre-cost equity value. Include underpricing in the calculation of the total costs of the offering. Do not round intermediate calculations. Round your answer to two decimal places.

Sean Thornton has invested in a convertible bond issued by Cohn Enterprises The conversion ratio is 20. The market price of Cohan common stock I $60 per share. The face value is $1000. The coupon rate is 8 percent and the annual interest is paid until the maturity date 10 years from now. similar nonconvertible bonds are yielding 12 percent (YTM) in the marketplace. a.)Calculate the straight bond value of this bond. b.) Calculate the conversion value of the Cohan Enterprises convertible bond. Please do not use Excel or any other programs to compute. Thank you.

You are considering buying a beach house as an investment property. The price today for the
beach house is $240,000. You can fully depreciate the house on a straight-line basis over a
thirty year period (and deduct this depreciation expense from your income taxes). The rent
you will charge on an annual basis will be $10,000. You will face maintenance costs of
$2,000 every year (also tax deductible). You intend to sell the property in ten years, and you
expect that during the next ten years the market value of the property will appreciate at an
annual rate of 5%. Assume that the tax rate for income on the property is 40%, and the tax
rate for capital gains on the property is 20%. Also, assume that the appropriate discount rate
for your calculations is 12%.

a) What is the NPV of the purchase of the property?
b) What is the IRR of the purchase of the property? Could you predict whether the IRR was
higher or lower than 12% without calculating it? If so, how?

Question 4:

Footwear Inc. manufactures a complete line of men’s women’s dress shoes for independent merchants. The average selling price of its finished product is $84 per pair. The variable cost for this same pair of shoes is $42. Footwear Inc. incurs fixed costs of $168,000 per year.

a) Calculate the profit or loss at the following units of production sold: 7,000 pairs of shoes? 9,000 pairs of shoes? b) Calculate the operating leverage. c) What is the meaning of operating leverage? Explain how operating leverage affects both profitability and risk of the firm.

1.A stock is currently trading for $35. The company has a price–earnings multiple of 10. There are 100 million shares outstanding. Your model indicates that the stock is actually worth $40. The company announces that it will use $340 million to repurchase shares.

1. After the repurchase, what is the value of the stock, according to your model? Do not round intermediate calculations. Round your answer to the nearest cent.

   $  

2. After the repurchase, what is the actual price–earnings multiple of the stock? Do not round intermediate calculations. Round your answer to two decimal places.

3. If the company had used the $340 million to pay a cash dividend instead of doing a repurchase, how would the value of the stock have changed, according to your model? Do not round intermediate calculations. Round your answer to the nearest cent.

   The market value of the stock is now $   .

2.A stock is currently trading for $33. The company has a price–earnings multiple of 10. There are 100 million shares outstanding. Your model indicates that the stock is actually worth $28. The company announces that it will use $350 million to repurchase shares.

1. After the repurchase, what is the value of the stock, according to your model? Do not round intermediate calculations. Round your answer to the nearest cent.

   $  

2. After the repurchase, what is the actual price–earnings multiple of the stock? Do not round intermediate calculations. Round your answer to two decimal places.

3. If the company had used the $350 million to pay a cash dividend instead of doing a repurchase, how would the value of the stock have changed, according to your model? Do not round intermediate calculations. Round your answer to the nearest cent.

   The market value of the stock is now $   .

4. If the company had used the $350 million to pay a cash dividend instead of doing a repurchase, what would be the actual price–earnings multiple after the dividend? Do not round intermediate calculations. Round your answer to two decimal places.