Xonics Graphics, Inc., is evaluating a new technology for its reproduction equipment. The

technology will have a three-year life, will cost $1,000, and will have an impact on cash

flows that is subject to risk. Management estimates that there is a fifty-fifty chance that the

technology will either save the company $1,000 in the first year or save it nothing at all. If

nothing at all, savings in the last two years would be zero as well. Even here there is some

possibility that in the second year an additional outlay of $300 would be required to

convert back to the original process, for the new technology may decrease efficiency.

Management attaches a 40 percent probability to this occurrence if the new technology

“bombs out” in the first year. If the technology proves itself in the first year, it is felt that

second-year cash flows will be $1,800, $1,400, and $1,000, with probabilities of 0.20, 0.60,

and 0.20, respectively. In the third year, cash flows are expected to be either $200 greater

or $200 less than the cash flow in period 2, with an equal chance of occurrence. (Again,

these cash flows depend on the cash flow in period 1 being $1,000.)

Book: fundamentals-of-Financial Management_van-horne_wachowicz_13ed

You are trying to value Apple’s stock as of the end of their fiscal year 2018. You’ve calculated their EBITDA from 2016 to 2018 as $61,429, $83,772, and $71,877. You’ve forecast their future EBITDA for the next five years as $81,312, $89,493, $98,496, $108,406, and $119,313. You’ve calculated their unlevered free cash flows from 2016 to 2018 as $44,932, $65,051, and $43,942. You’ve forecast their future unlevered FCFs for the next five years as $45,303, $58,936, $64,865, $71,391, and $78,574. You believe that the FCF in the first year after your forecast horizon will be $82,503, and the FCFs will grow at a constant rate of 5% forever after that time. You’ve calculated the firm’s WACC (discount rate) as 15%. The company currently has $100,000 in capital structure debt, $250,000 in total liabilities, $25,000 in cash, $100,000 in current assets, no minority interest, no employee stock options outstanding, and 3,000 shares outstanding. What is Apple’s implied stock price per share, based on this information? What is their implied price per share if you calculate the terminal value assuming an EBITDA multiple of 7? What is the implied stock price if you value the firm today using an EV/EBITDA multiple of 8? Show your work (you can do this in Excel if you’d like, just include all of your work).

If you could show me the process to this that would be greatly appreciated, Thanks

Discuss the most common and current real-life uses of terminal values in cash flow analysis, and the pros and con's of this calculation process. (Words should be between 400 to 500 with at least 3 paragraphs.

Compute the expected return and risk on your portfolio using the following information: you invest 20%, 40%, and 40% in assets A, B, and C, respectively: Expected returns on assets A, B, and C: 10%, 5%, and 2%, respectively. Standard deviations of A, B, and C are 10%, 6%, and 1%, respectively. The Covariances between the assets are all zero but the covariance between B and C which is 1.

1. A borrower takes out a 30-year adjustable rate mortgage loan for $200,000 with monthly payments. The first two years of the loan have a “teaser” rate of 4%, after that, the rate can reset with a 5% annual payment cap. On the reset date, the composite rate is 6%. What would the Year 3 monthly payment be?

1. $955
2. $1,003
3. $1,067
4. $1,186
5. Because of the payment cap, the payment would not change.

1. If at the end of week three of a project you discover you that SV is negative but SPI is 1.06. What does this mean?

2. What is the difference between percent complete and percent complete with gates Earned value (EV) measurement rules? What advantage does the latter have over the former?

3. Cost Variance (CV) and Cost Performance Index (CPI) can both be used to determine whether a project is on budget, under budget, or over budget at a particular point in time. What should a PM look for when reviewing CV and CPI information? What additional EVM analyses/calculations are supported by CPI?

2. Advanced Medical Technology is a new, rapidly growing firm that produces specialized medical instruments. They sell to hospitals and other surgical units, and a substantial portion of their sales are to foreign governments. Typical payable terms in the industry are payment with 30 days.

They recently reported the following financial information:

            Sales                            $225,000          

            Cost of sales                  180,000          

            Inventory                           33,000         

            Accounts receivable          72,000         

            Accounts payable             30,000         

            # of Days per year               365          

Compute the additional working capital financing period for Advanced Medical.

Comment on their working capital financing period.   What actions might Advanced take to improve their situation?

Loki Labs is experience rapid growth due the increased demand for dog treat products that are low in calories and high in nutrition. Current sales of $125,000, which increased from $90,000 the previous month, are expected to grow at a 25 percent rate. Costs of sales are stable at 75% of sales revenue. Loki's sales are for 30 percent cash with the remaining 70 percent collected the following month. Inventory-on-hand is maintained at a level to support the following month's sales. Inventory is paid in full at the time of receipt. Loki's cash balance at the start of the period was $75,000.

A. For the current month and the following three months, determine Loki's

1. Revenue                                              
2. Inventory                                              
3. Cost of sales                                       
4. Accounts receivable                                         
5. Cash collections                                               
6. Cash disbursements                                         

B. Is Loki's gross profit increasing or declining?                       

C. Is Loki's cash flow increasing or declining?              

D. What is Loki's cash balance at the end of the four-month period?

What is Wealthtech in the future for you personally?

Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio.

Consider the following case:

Polk Software Inc. has a quick ratio of 2.00x, $32,850 in cash, $18,250 in accounts receivable, some inventory, total current assets of $73,000, and total current liabilities of $25,550. The company reported annual sales of $100,000 in the most recent annual report.

Over the past year, how often did Polk Software Inc. sell and replace its inventory?

8.01x

5.03x

2.86x

4.57x

The inventory turnover ratio across companies in the software industry is 5.027x. Based on this information, which of the following statements is true for Polk Software Inc.?

Polk Software Inc. is holding less inventory per dollar of sales compared with the industry average.

Polk Software Inc. is holding more inventory per dollar of sales compared with the industry average.

You are analyzing two companies that manufacture electronic toys—Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $100,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $255,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. You’ve collected data from the companies’ financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.)

Data Collected (in dollars)

Using this information, complete the following statements to include in your analysis.