What are the three different forms of business organization? Explain with examples.

An old two-flat can be purchased for $200,000 cash. The two units can bring in a total of $2,500 per month (allowing for normal vacancies). The total operating expenses for property taxes, repairs, gardening, and so forth are estimated to be $200 per month. For tax purposes, straight-line depreciation over a 20-year remaining life with to a zero salvage value will be used.

Of the total $200,000 cost of the property, $50,000 is the value of the land. Assume a 38% marginal income tax bracket (combined state and federal taxes) applies throughout the 20 years. This tax rate applies to ordinary income and capital gains/losses.

Since there is no growth expected in rents or expenses, depreciation is straight-line, and the tax rate doesn’t change, the ATCF’s for each year, 1 to 20, will be the same.

What after-tax IRR would you expect assuming that the property is held for twenty years and then sold for $50,000?

What after-tax IRR would you expect assuming that the property is held for twenty years and then sold for $150,000?

Discuss whether Johnson & Johnson has been successful in all of their acquisitions.

Simtek currently pays a $2.50 dividends per share next year 's dividend is expected to be $3 per share. after next year , dividends are expected to increase at a 9% annual rate for 3years and a 6% annual rate thereafter.

a. what is the current value of a share of Simtek stock to an investor who requires a 15% return on his or her investment.

b. if the dividend in year 1 is expected to be $3 and the growth rate over the following three years is expected to be only 7% and then 6% thereafter, what will the new stock price be?

Review and analyse Cash Flow Statement of Vodafone and DT.

Specify your key observations.

Consider a one-year, 10 percent coupon bond with a face value of $1,000 issued by a private corporation. The one-year risk-free rate is 10 percent. The corporation has hit on hard times, and the consensus is that there is a 20 percent probability that it will default on its bonds. If an investor were willing to pay at most $775 for the bond, is that investor risk neutral or risk averse?

Explain (in no more than 3 sentences) why we, for example, tend to use put options for X ≤ $228.82 to back-out the IV(implied volatility), but for X > $228.82, we use the call options. For your information, the last traded price for Tesla Inc. on 25 July 2019 was $228.82.

2.  Use the following balance sheet and simplified income statement in answering parts (a) – (c) below: BALANCE SHEET Cash $75,000 Accounts receivables100,000 Inventory95,000 Fixed assets$500,000 Total assets$770,000 Account payable$135,000 Other current liabilities50,000 Long-term debt150,000 Stockholders’ equity (75,000 shares)$435,000 Total liability and equity$770,000 INCOME STATEMENT Sales$1,250,000 Less:  Cost of goods sold635,000 Less:  All expenses (incl. taxes)370,000 Net Income$245,000 a.)  Based on the financial information above, conduct a liquidity analysis for this firm by determining the current ratio, net working capital, the ratio of current assets/total assets, and the cash conversion period. b.)  What is the current market price of the firm’s stock (P0) if the firm’s P/E ratio is 11.5?   Hint:  Note that a firm’s earnings per share = NI/S, where NI = earnings.  Therefore P0 = P/E x E/S c.)  A proposal is made by this firm’s CFO to increase the current ratio to 2x.  The CFO suggests that the firm issue 5,000 new shares of common stock (ignore any flotation costs) and the estimated price per share based on secondary market conditions will be $28.50.  The proceeds from the equity issue will be added to the firm’s cash account.  Assuming everything else remains the same, determine: i)  The impact on the firm’s liquidity position by re-calculating the current ratio, net working capital, the ratio of current assets/total assets, and the cash conversion period as you did in part (a) above. ii)  The new market price (assume the P/E ratio is constant at 11.5). iii)  Based on your estimate of the new price per share of this company’s stock, should the firm adopt the changes suggested by the CFO?  Briefly explain.

Swink Electric, Inc., has just developed a solar panel capable of generating

200 percent more electricity than any solar panel currently on the market. As a

result, Swink is expected to experience a 15 percent annual growth rate for the

next five years. When the five-year period ends, other firms will have developed

comparable technology, and Swink’s growth rate will slow to 5 percent per year

indefinitely. Stockholders require a return of 12 percent on Swink’s stock.

The firm’s most recent annual dividend (D0), which was paid yesterday, was

$1.75 per share.

The Pan American Bottling Co. is considering the purchase of a new machine that would increase the speed of bottling and save money. The net cost of this machine is $57,000. The annual cash flows have the following projections. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

a.    If the cost of capital is 11 percent, what is the net present value of selecting a new machine? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

What is the Net present value? ________________

b..

what is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

What is the Internal rate of return? _______________%

c, Should the project be accepted? Yes or No.

Please give a calculated solution using a calculator. Thanks!