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ARTICLE BELOW:

"Wendy's Co. said it will bring back breakfast across its U.S. restaurants next year as fast-food chains compete to lure diners during more of the day.

The burger chain said Monday that it will spend $20 million to add more menu items and longer hours at its 5,813 domestic restaurants. Wendy's said it and its franchisees will hire some 20,000 workers to help roll out the expanded offerings.

Shares fell about 4% after hours to $21.01 when Wendy's said the investments had prompted it to adjust guidance for its current fiscal year. The company said it expects earnings per share adjusted for one-time items to decline between 3.5% and 6.5%, down from its previous forecast for growth of 3.5% to 7.0%.

Earlier

* McDonald's Tests Robot Fryers and Voice-Activated Drive-Throughs (June 20)

* McDonald's Makes Over All-Day Breakfast to Speed Up Wait Times (May 14)

Breakfast has become an increasingly competitive part of the day for major fast-food companies. McDonald's Corp. has pointed to competition in breakfast as a key area of concern. Guest growth in breakfast is starting to recover for McDonald's after a slide, the company has said, but progress remains slow.

"There's been a lot of new entrants into that space," McDonald's Chief Financial Officer Kevin Ozan said during a July call to discuss the company's most recent earnings report.

Wendy's currently sells breakfast items at about 300 restaurants after earlier efforts to expand nationwide were scrapped. The company abandoned a 2012 push into breakfast at more of its restaurants after a year. Too eclectic a mix of healthy and indulgent options as well as competition from McDonald's and Starbucks Corp. were seen as problems at the time, analysts said.

A Wendy's spokesperson said the company is confident in this launch. The new Wendy's morning menu features a bacon breakfast sandwich, a chicken biscuit and one of the chain's Frosty shakes made with coffee. Working those popular Wendy's items into breakfast foods will help the chain's menu stand out, Chief Executive Todd Penegor said on Monday."

The Nelson Company has $1,080,000 in current assets and $400,000 in current liabilities. Its initial inventory level is $280,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.5? Round your answer to the nearest cent. $ What will be the firm's quick ratio after Nelson has raised the maximum amount of short-term funds? Round your answer to two decimal places.

Consider the three stocks in the following table.

1. Calculate the rate of return on an equally weighted index of the three stocks.

2. Calculate the rate of return on a price-weighted index of the three stocks.

3. Calculate the rate of return on a market-weighted index of the three stocks.

3. What benchmark would you use to calculate materiality? Why? ((a)Net Income, (b) Assets, (c) Revenue, or (d)Equity.) (Pick 1 letter & Explain why)

a. 5 percent to 10 percent of net income before taxes.

b. ½ percent to 1 percent of total assets.

c. ½ percent to 1 percent of total revenues.

d. ½-1 percent of total equity.

4. Would you use a higher percentage or a lower percentage for the benchmark you selected in Q3 above. (EX: 5% of Net Income vs 10% of Net Income)? Explain why?

5. Using the choices from Q3 & Q4 above calculate “overall materiality” for your audit for 2019? (ex: Benchmark %(1%) * Assets ($25m)= $250K (Overall Materiality)).

You just won the lottery. Congratulations! The jackpot is $85,000,000 paid in eight equal annual payments. The first payment on the lottery jackpot will be made today. In present value terms, you really won ______ assuming annual interest rate of 11.00%. Show work or formula in excel.

Williamson Industries has $5 billion in sales and $1.6 billion in fixed assets. Currently, the company's fixed assets are operating at 90% of capacity.

1. What level of sales could Williamson Industries have obtained if it had been operating at full capacity? Write out your answer completely. For example, 25 billion should be entered as 25,000,000,000. Round your answer to the nearest cent.
   $
2. 
   
3. What is Williamson's target fixed assets/sales ratio? Round your answer to two decimal places.
   %
4. 
   
5. If Williamson's sales increase 13%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Write out your answer completely. For example, 25 billion should be entered as 25,000,000,000. Round your answer to the nearest cent. Negative amount should be indicated by a minus sign. Do not round intermediate calculations.
   $

Consider the three stocks in the following table. P_t represents price at time t, and Q_t represents shares outstanding at time t. Stock C splits two-for-one in the last period.

a. Calculate the rate of return on a price-weighted index of the three stocks for the first period (t = 0 to t = 1). (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. What will be the divisor for the price-weighted index in year 2? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

c. Calculate the rate of return of the price-weighted index for the second period (t = 1 to t = 2).

Business Finance Question

5-16.

Suppose today is January 2, 2019, and investors expect the annual risk-free interest rates in 2023 and 2024 to be:

Year    One-Year Rate

2023    4.5%

2024    2.3

Currently, a four-year Treasury bond that matures on December 31, 2022, has an interest rate equal to 2.5 percent. What is the yield to maturity for Treasury bonds that mature at the end of (a) 2023 (a five-year bond) and (b) 2024 (a six-year bond)? Assume the bonds have no risks.

1. How do you differentiate between assets and liabilities on the balance sheet?

2. What is the basic Balance Sheet equation and why is it important?

You have been hired as a risk manager for Acorn Savings and Loan.​ Currently, Acorn's balance sheet is as follows​ (in millions of​ dollars):

When you analyze the duration of​ loans, you find that the duration of the auto loans is 1.8 ​years, while the mortgages have a duration of 7.1

years. Both the cash reserves and the checking and savings accounts have a zero duration. The CDs have a duration of 2.1

​years, and the​ long-term financing has a 9.6-year duration.

a. What is the duration of​ Acorn's equity?

b. Suppose Acorn experiences a rash of mortgage​ prepayments, reducing the size of the mortgage portfolio from $ 152.8 million to $ 101.9

​million, and increasing cash reserves to $ 99.7 million. What is the duration of​ Acorn's equity​ now? If interest rates are currently4 % and were to fall to 3 %

estimate the approximate change in the value of​ Acorn's equity.​ (Assume interest rates are APRs based on monthly​ compounding.)

c. Suppose that after the prepayments in part (b​), but before a change in interest​ rates, Acorn considers managing its risk by selling mortgages​ and/or buying 10​-year Treasury STRIPS​ (zero coupon​ bonds). How many should the firm buy or sell to eliminate its current interest rate​ risk?

Bonds of RCY Corporation with a face value of $1000 sells for $960, mature in 5 years, and have a 7% coupon rate paid semiannually. Calculate the investor's RCY by assuming the following: - Bond sold to yield at 7% and the end of the 3-year holding period. - Reinvestment rate 6% APR during this holding period. - PS: state what assumption(s) you need to make in calculating this RCY.