This is all one question, thank you so much in advance!

You must evaluate the purchase of a proposed spectrometer for the R&D department. The base price is $200,000, and it would cost another $30,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold after 3 years for $100,000. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The equipment would require a $13,000 increase in net operating working capital (spare parts inventory). The project would have no effect on revenues, but it should save the firm $73,000 per year in before-tax labor costs. The firm's marginal federal-plus-state tax rate is 40%.

1. What is the initial investment outlay for the spectrometer, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent. Negative amount should be indicated by a minus sign.
   $

2. What are the project's annual cash flows in Years 1, 2, and 3? Round your answers to the nearest cent.

   In Year 1 $

   In Year 2 $

   In Year 3 $

3. If the WACC is 13%, should the spectrometer be purchased?

This is all one question, thank you so much in advance.

The Bigbee Bottling Company is contemplating the replacement of one of its bottling machines with a newer and more efficient one. The old machine has a book value of $575,000 and a remaining useful life of 5 years. The firm does not expect to realize any return from scrapping the old machine in 5 years, but it can sell it now to another firm in the industry for $265,000. The old machine is being depreciated by $115,000 per year, using the straight-line method.

The new machine has a purchase price of $1,100,000, an estimated useful life and MACRS class life of 5 years, and an estimated salvage value of $120,000. The applicable depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. It is expected to economize on electric power usage, labor, and repair costs, as well as to reduce the number of defective bottles. In total, an annual savings of $205,000 will be realized if the new machine is installed. The company's marginal tax rate is 35%, and it has a 12% WACC.

1. What initial cash outlay is required for the new machine? Round your answer to the nearest dollar. Negative amount should be indicated by a minus sign.
   $
   
2. Calculate the annual depreciation allowances for both machines and compute the change in the annual depreciation expense if the replacement is made. Round your answers to the nearest dollar.

   Year	Depreciation Allowance, New	Depreciation Allowance, Old	Change in Depreciation
   1	$	$	$
   2
   3
   4
   5

3. What are the incremental net cash flows in Years 1 through 5? Round your answers to the nearest dollar.

   Year 1	Year 2	Year 3	Year 4	Year 5
   $	$	$	$	$

4. Should the firm purchase the new machine? Yes or No?

This is all one question, thank you so much in advance!

You must evaluate a proposal to buy a new milling machine. The base price is $102,000, and shipping and installation costs would add another $10,000. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $61,200. The applicable depreciation rates are 33%, 45%, 15%, and 7%. The machine would require a $7,500 increase in net operating working capital (increased inventory less increased accounts payable). There would be no effect on revenues, but pretax labor costs would decline by $52,000 per year. The marginal tax rate is 35%, and the WACC is 14%. Also, the firm spent $5,000 last year investigating the feasibility of using the machine.

1. How should the $5,000 spent last year be handled?
   1. The cost of research is an incremental cash flow and should be included in the analysis.
   2. Only the tax effect of the research expenses should be included in the analysis.
   3. Last year's expenditure should be treated as a terminal cash flow and dealt with at the end of the project's life. Hence, it should not be included in the initial investment outlay.
   4. Last year's expenditure is considered as an opportunity cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   5. Last year's expenditure is considered as a sunk cost and does not represent an incremental cash flow. Hence, it should not be included in the analysis.
   
   -Select-IIIIIIIVVItem 1

2. What is the initial investment outlay for the machine for capital budgeting purposes, that is, what is the Year 0 project cash flow? Round your answer to the nearest cent.
   $

3. What are the project's annual cash flows during Years 1, 2, and 3? Round your answer to the nearest cent. Do not round your intermediate calculations.

   Year 1 $

   Year 2 $

   Year 3 $

4. Should the machine be purchased?

X Company is considering the purchase of a new processor that costs $200,000. Shipping and setup costs for the processor are estimated to be $15,000. X’s working capital requirement is expected to increase by $17,000 when the new processor begins operation and is expected to be fully recoverable at the end of the project. The processor’s useful life is expected to be 5 years and its salvage value at that point is estimated to be $25,000. Estimated revenues and expenses before tax for each year are shown in the table below.

The processor will be depreciated to a zero book value using the following annual depreciation rates that are applied to the original installed cost.

Assume a tax rate of 35% and a cost of capital of 12%. Show the calculations for the initial outlay and the CFAT for each year. Then use your financial calculator to find the NPV and IRR for the project. Based on the NPV and IRR, should company X invest in the new processor?

Check Answers: Initial Investment: $232,000, NPV = -$15,574

St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has no salvage value. However, even though it is old, it is still functional as originally designed and can be used for quite a while longer. The new welder will cost $181,000 and have an estimated life of 8 years with no salvage value. The new welder will be much more efficient, however, and this enhanced efficiency will increase earnings before depreciation from $26,000 to $82,000 per year. The new machine will be depreciated over its 5-year MACRS recovery period, so the applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. The applicable corporate tax rate is 40%, and the project cost of capital is 14%. Should the old welder be replaced by the new one? Do not round intermediate calculations. Round your answer to the nearest cent. Negative value, if any, should be indicated by a minus sign.

The NPV of the project is $ _______ ?  

Old welder -Select-should be replaced.

A Canadian company issues an 8-year term bond with face value of​ $1,000 and​ 6% coupon rate. If the market prevailing effective rate of interest is​ 5.75%, what is the price an investor will have to​ pay? Note: The bond pays a​ $60 coupon​ (or interest) payment at the end of each of the 8 years and pays the face value at the end of the 8 years.

A.​$1,150.00

B.​$1,200.00

C.​$1,015.85

D.​$1,215.00

Procter and Gamble​ (PG) paid an annual dividend of $ 1.62$1.62 in 2009. You expect PG to increase its dividends by 8.1 %8.1% per year for the next five years​ (through 2014), and thereafter by 2.9 %2.9% per year. If the appropriate equity cost of capital for Procter and Gamble is 7.3 %7.3% per​ year, use the​ dividend-discount model to estimate its value per share at the end of 2009.

The price per share is ​$____?  (Round to the nearest​ cent.)

Non-constant growth model:
Do=$2.00 required return on equity= 5%

g= 9% n=1,2

g=7% n=3,4

g=3% n=5 and thereafter

No spreadsheet, worked out

1. According to Mike Taft of RVK, the “Markets Group” is an important unit of the Federal Reserve. What is the ‘Markets Group,” and what is their main responsibility?

Show your work please

1. What is the discount yield, bond equivalent yield, and effective annual return on a $2 million Treasury bill that currently sells for 99.90 percent of its face value and is 28 days from maturity?

1. Based on the loanable funds theory, explain how each of the following changes should impact interest rates (increase or decrease):
   1. Covenants on borrowing become more restrictive.
   2. The Federal Reserve increases the money supply.
   3. Total household wealth increases.

LUVE produces bracelets. Each band generates $460 in revenue and requires one
ounce of gold as an input. LUVE plans to produce and sell one widget in exactly
one year. The c.c. risk-free rate is zero percent.

1. LUVE is considering hedging their gold exposure with a long forward contract.
   The one-year forward price of gold is $420 per ounce. If the spot price of gold is $450
   per ounce in one year, what is LUVE's hedged profit?

The answer I got was 30

2. LUVE is considering hedging their gold exposure with a call option. The premium on a one-year call option on gold with a strike of $420 per ounce is $8.77. If the
price of gold is $450 per ounce in one year, what is LUVE’s hedged profit?

I got 21.23

3. The call option hedge outperforms the long forward hedge (in terms of profits) whenever the gold price is below S*. What value of S* makes this statement true?

I got -38.77

(The following data apply to the next three questions.)

Assume the following cost and revenue data for General Hospital: Fixed costs = $15,000,000. Variable cost per inpatient day = $250. Revenue per inpatient day = $1,000.

1. What is the expected profit at a volume of 25,000 inpatient days?

a. -$3,750,000 b. $ 0 c. $1,750,000 d. $2,750,000 e. $3,750,000

2. What revenue per inpatient day is required to obtain a profit of $1,000,000 at a volume of 25,000 patient days?

a. $750 b. $790 c. $850 d. $890 e. $950

3. Which of the follow statements best describes the contribution margin?

a. The contribution margin is defined as fixed costs minus variable costs.

b. Under fee-for-service, the contribution margin is the dollar amount of each unit of service that is available first to cover fixed costs and then to contribute to profit. c. Under capitation, the contribution margin is the dollar amount of each PMPM premium that is available to pay for administration overhead.

d. The contribution margin is defined as revenues minus fixed costs.

e. Under capitation, the total contribution margin is the contribution margin multiplied by the PMPM premium rate.