A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm’s production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $25,234.00 per year for 8 years and costs $104,851.00. The UGA-3000 produces incremental cash flows of $27,583.00 per year for 9 years and cost $125,853.00. The firm’s WACC is 9.27%. What is the equivalent annual annuity of the GSU-3300? Assume that there are no taxes.

Answer format: Currency: Round to: 2 decimal places.

A firm is must choose to buy the GSU-3300 or the UGA-3000. Both machines make the firm’s production process more efficient which in turn increases incremental cash flows. The GSU-3300 produces incremental cash flows of $25,989.00 per year for 8 years and costs $99,366.00. The UGA-3000 produces incremental cash flows of $29,404.00 per year for 9 years and cost $125,776.00. The firm’s WACC is 8.41%. What is the equivalent annual annuity of the UGA-3000? Assume that there are no taxes.

Answer format: Currency: Round to: 2 decimal places.

Could really use the help!! Please show all steps (not excel) for better understanding :D Thank You.

Acme corporation is considering a project to make gizmos. The cash flow would be $425,000 per year. The project cost is $2.6 million and no matter when the project is started, gizmos would become obsolete in 10 years.

However, the technology to produce gizmos is becoming cheaper by the year and the project costs are likely to decline by $230,000 per year until it reaches $1.45 million, after which there would be no more reduction in the project cost, Acme’s required return is 12 percent. Should the project be undertaken and if so, when?

7.10) Harrimon Industries bonds have 5 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 8%.

1. What is the yield to maturity at a current market price of
   1. $785? Round your answer to two decimal places.

         %

   2. $1,095? Round your answer to two decimal places.

         %

2. Would you pay $785 for each bond if you thought that a "fair" market interest rate for such bonds was 13%—that is, if r_d = 13%?
   1. You would not buy the bond as long as the yield to maturity at this price is greater than your required rate of return.
   2. You would not buy the bond as long as the yield to maturity at this price is less than the coupon rate on the bond.
   3. You would buy the bond as long as the yield to maturity at this price is greater than your required rate of return.
   4. You would buy the bond as long as the yield to maturity at this price is less than your required rate of return.
   5. You would buy the bond as long as the yield to maturity at this price equals your required rate of return.

BETHESDA MINING COMPANY

Bethesda Mining is a midsized coal mining company with 20 mines located in Ohio, Pennsylvania, West Virginia, and Kentucky. The company operates deep mines as well as strip mines. Most of the coal mined is sold under contract, with excess production sold on the spot market.

The coal mining industry, especially high-sulfur coal operations such as Bethesda, has been hard-hit by environmental regulations. Recently, however, a combination of increased demand for coal and new pollution reduction technologies has led to an improved market demand for high-sulfur coal. Bethesda has just been approached by Mid-Ohio Electric Company with a request to supply coal for its electric generators for the next four years. Bethesda Mining does not have enough excess capacity at its existing mines to guarantee the contract. The company is considering opening a strip mine in Ohio on 5,000 acres of land purchased 10 years ago for $4 million. Based on a recent appraisal, the company feels it could receive $6.5 million on an aftertax basis if it sold the land today.

Strip mining is a process where the layers of topsoil above a coal vein are removed and the exposed coal is removed. Some time ago, the company would simply remove the coal and leave the land in an unusable condition. Changes in mining regulations now force a company to reclaim the land; that is, when the mining is completed, the land must be restored to near its original condition. The land can then be used for other purposes. Because it is currently operating at full capacity, Bethesda will need to purchase additional necessary equipment, which will cost $95 million. The equipment will be depreciated on a seven-year MACRS schedule. The contract runs for only four years. At that time the coal from the site will be entirely mined. The company feels that the equipment can be sold for 60 percent of its initial purchase price in four years. However, Bethesda plans to open another strip mine at that time and will use the equipment at the new mine.

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The contract calls for the delivery of 500,000 tons of coal per year at a price of $86 per ton. Bethesda Mining feels that coal production will be 620,000 tons, 680,000 tons, 730,000 tons, and 590,000 tons, respectively, over the next four years. The excess production will be sold in the spot market at an average of $77 per ton. Variable costs amount to $31 per ton, and fixed costs are $4,100,000 per year. The mine will require a net working capital investment of 5 percent of sales. The NWC will be built up in the year prior to the sales.

Bethesda will be responsible for reclaiming the land at termination of the mining. This will occur in Year 5. The company uses an outside company for reclamation of all the company’s strip mines. It is estimated the cost of reclamation will be $2.7 million. In order to get the necessary permits for the strip mine, the company agreed to donate the land after reclamation to the state for use as a public park and recreation area. This will occur in Year 6 and result in a charitable expense deduction of $6 million. Bethesda faces a 38 percent tax rate and has a 12 percent required return on new strip mine projects. Assume that a loss in any year will result in a tax credit.

QUESTION:

You have been approached by the president of the company with a request to analyze the project. Calculate the payback period, profitability index, net present value, and internal rate of return for the new strip mine. Should Bethesda Mining take the contract and open the mine?

Rentz Corporation is investigating the optimal level of current assets for the coming year. Management expects sales to increase to approximately $4 million as a result of an asset expansion presently being undertaken. Fixed assets total $2 million, and the firm plans to maintain a 60% debt-to-assets ratio. Rentz's interest rate is currently 9% on both short-term and long-term debt (which the firm uses in its permanent structure). Three alternatives regarding the projected current assets level are under consideration: (1) a restricted policy where current assets would be only 45% of projected sales, (2) a moderate policy where current assets would be 50% of sales, and (3) a relaxed policy where current assets would be 60% of sales. Earnings before interest and taxes should be 11% of total sales, and the federal-plus-state tax rate is 40%.

1. What is the expected return on equity under each current assets level? Round your answers to two decimal places.
   

   Restricted policy		%
   Moderate policy		%
   Relaxed policy		%

2. In this problem, we assume that expected sales are independent of the current assets investment policy. Is this a valid assumption?
   1. Yes, this assumption would probably be valid in a real world situation. A firm's current asset policies have no significant effect on sales.
   2. Yes, sales are controlled only by the degree of marketing effort the firm uses, irrespective of the current asset policies it employs.
   3. Yes, the current asset policies followed by the firm mainly influence the level of long-term debt used by the firm.
   4. Yes, the current asset policies followed by the firm mainly influence the level of fixed assets.
   5. No, this assumption would probably not be valid in a real world situation. A firm's current asset policies may have a significant effect on sales.
   
   -Select-IIIIIIIVVItem 4
3. How would the firm's risk be affected by the different policies?
   
   The input in the box below will not be graded, but may be reviewed and considered by your instructor.

10.1The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 8.2 million shares outstanding, is now (1/1/20) selling for $77.00 per share. The expected dividend at the end of the current year (12/31/20) is 60% of the 2019 EPS. Because investors expect past trends to continue, g may be based on the historical earnings growth rate. (Note that 9 years of growth are reflected in the 10 years of data.)

The current interest rate on new debt is 11%; Foust's marginal tax rate is 25%; and its target capital structure is 50% debt and 50% equity.

1. Calculate Foust's after-tax cost of debt. Round your answer to two decimal places.

   %

   Calculate Foust's cost of common equity. Calculate the cost of equity as r_s = D₁/P₀ + g. Do not round intermediate calculations. Round your answer to two decimal places.

   %

2. Find Foust's WACC. Do not round intermediate calculations. Round your answer to two decimal places.

   %

Summarize the action(s) taken by the FOMC as per its Press Release and the Decisions Regarding Monetary Policy Implementation on March 15th, 2020.

The following table gives Foust Company's earnings per share for the last 10 years. The common stock, 8.1 million shares outstanding, is now (1/1/20) selling for $70.00 per share. The expected dividend at the end of the current year (12/31/20) is 50% of the 2019 EPS. Because investors expect past trends to continue, g may be based on the historical earnings growth rate. (Note that 9 years of growth are reflected in the 10 years of data.)

The current interest rate on new debt is 11%; Foust's marginal tax rate is 25%; and its target capital structure is 40% debt and 60% equity.

1. Calculate Foust's after-tax cost of debt. Round your answer to two decimal places.

     %

   Calculate Foust's cost of common equity. Calculate the cost of equity as r_s = D₁/P₀ + g. Do not round intermediate calculations. Round your answer to two decimal places.

     %

2. Find Foust's WACC. Do not round intermediate calculations. Round your answer to two decimal places.

     %

Bellinger Industries is considering two projects for inclusion in its capital budget, and you have been asked to do the analysis. Both projects' after-tax cash flows are shown on the time line below. Depreciation, salvage values, net operating working capital requirements, and tax effects are all included in these cash flows. Both projects have 4-year lives, and they have risk characteristics similar to the firm's average project. Bellinger's WACC is 11%. 0 1 2 3 4 Project A -1,050 700 425 210 260 Project B -1,050 300 360 360 710

What is Project A's payback? Do not round intermediate calculations. Round your answer to four decimal places. years

What is Project A's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places. years

What is Project B's payback? Do not round intermediate calculations. Round your answer to four decimal places. years

What is Project B's discounted payback? Do not round intermediate calculations. Round your answer to four decimal places. years

What are the similarities and differences been property/casualty insurance companies and life insurance companies

Your portfolio is contains $11,845 invested in a mutual fund with a beta of 1.3, and $4,740 invested in an ETF with a beta of 0.8. You want to re-balance your portfolio so that it will have an overall beta of 0.8. You plan on selling shares of one asset to buy shares of the other. How many shares of the mutual fund will need to sell (or buy) to achieve your goal? The ETF is trading at $16.40 and the mutual fund is trading at $7.80. Write your answer as positive if you are buying shares of the mutual fund, and write it as negative if you are selling the shares of the fund. Round your answer to one decimal place. Answer:(1,518.6)

Your portfolio is contains $11,385 invested in a mutual fund with a beta of 2.4, and $980 invested in an ETF with a beta of 0.4. How much (in $) should you transfer from the mutual fund to the ETF so that your overall portfolio beta is 0.9? You will not add any money to the portfolio, you are just transferring money from one asset to another.

If re-balancing requires transferring money from the ETF to the mutual fund, write the answer as a negative number.

Answer is 8,294 need to know how to arrive to that number

The market is expected to yield 9.4% and the risk free rate is 1.2%. You currently hold a portfolio with a beta of 0.7 worth $24,400. You want to invest in another portfolio with a beta of 1.8. How much will you have to invest in the new risky asset so that the resulting portfolio will have an expected return of 11.4%? Note: You are adding funds to the new asset and to the overall portfolio. answer in $ not in percentage.

Answer is 23,864.90 but I am getting 20,328.14