Valeri invested $5000 at 9.25% compounded quarterly. After 18 months, the rate changed to 9.75% compounded semi-annually. What amount will Valeri have 3 years after the initial investment?

In a pro forma income statement, do you think a finance manager make changes in the prior year's percentages for different line items? Give an example of a line item that you would expect to vary in percentage every year as sales forecasts grow or changes for Facebook. Be sure to cite and reference your sources if possible.

What is meant by a poison pill, in corporate management? Give an example of how the concept is applied.

Currently, Warren Industries can sell 20 dash year​, ​$1, 000​-par-value bonds paying annual interest at a 11​% coupon rate. Because current market rates for similar bonds are just under 11​%, Warren can sell its bonds for ​$1 ,050 ​each; Warren will incur flotation costs of ​$30 per bond. The firm is in the 29​% tax bracket.

a.  Find the net proceeds from the sale of the​ bond.

b.  Calculate the​ bond's yield to maturity​ (YTM​) to estimate the​ before-tax and​ after-tax costs of debt.

c.  Use the approximation formula to estimate the​ before-tax and​ after-tax costs of debt.

Consider the Three Gorges Dam Project on the Yangtzee River in the People’s Republic of China.(For example, see National Geography September 1997 for more information)

(A) Suppose the Ministry of Water Projects announces that the Project Benefit to Cost Ratio (BCR) for the Project is 2.0. Indicate how you would constructively criticize the BCR given. Explain using course concepts.

(B) Suppose the Net Present Value (NPV) of Market Benefits and the Environmental Costs of the current location of the dam in comparison to other locations are as follows:

Project                         NPV of Market Benefits                     Environmental Costs

Current                                    1,000,000,000                                     Large

Alternative 1                              750,000,000                                     Medium

Alternative 2                              600,000,000                                     Medium

Alternative 3                              500,000,000                                     Small

Indicate criteria to help compare the above Projects, identify the Best Option and explain using Course Concepts.

Quad Enterprises is considering a new 3 year expansion project that requires an initial fixed asset investment of $2.592 million. the fixed asset will be depreciated straight-line to zero over its 3-year tax life, after which time it will have a market value of $201,600. The project requires an initial investment in net working capital of $288,000. The project is estimated to generate $2,304,000 in annual sales, with costs of $921,600. The tax rate is 23 percent and the required return on the project is 10 percent.   

1) What is the projects Year 0 net cash flow?

A. $ -2,880,000   B. $ -3,024,000 C. $ -3,168,000   D. $ -2,736,000 E. $ -2,592,000

2) What is the projects Year 1 net cash flow?

A. $1,263,168   B. $1,326,326 C. $1,389,485   D. $1,200,010 E. $1,136,851

3) What is the projects Year 2 net cash flow?

A. $1,263,168 B. $1,326,326   C. $1,389,485   D. $1,200,010 E. $1,136,851

4) What is the projects Year 3 net cash flow?

A. $1,706,400 B. $1,791,720 C. $1,877,040 D. $1,621,080 E. $1,535,760

5) What is the NPV?

A. $594,319 B. $(605,285)    C. $2,136,380 D. $549,312 E. $624,035

Your firm is contemplating the purchase of a new $850,000 computer-based order entry system. The system will be depreciated straight-line to zero over its 5 year life. It will be worth $75,000 at the end of that time. You will save $320,000 before taxes per year in order processing costs and you will be able to reduce working capital by $105,000 (this is a one-time reduction). the net working capital will be restored to its original level when the project ends.The tax rate is 35%. Assume the discount rate 10%.

A) What is the annual OCF for the project?

B)What is the CAPEX BEFORE THE PROJECT STARTS (i.e.,at t=0)and when the project ends?

C) What is change in NWC before the project stars (i.e.,at t=0) and when the project ends ??

D) What are the cash flows in each year for this project??

E) What is the IRR for this project?

F) What is the NPV for this project?

plz answers with showing your work AND THE FORMULA

General Importers announced that it will pay a dividend of $3.65 per share one year from today. After that, the company expects a slowdown in its business and will not pay a dividend for the next 4 years. Then, 6 years from today, the company will begin paying an annual dividend of $1.75 forever. The required return is 11.4 percent. What is the price of the stock today?

After reading this chapter, it isn’t surprising that you’re becoming an investment wizard. With your newfound expertise, you purchase 100 shares of KSU Corporation for $37 per share. Assume the price goes up to $45 per share over the next 12 months and you receive a qualified dividend of $0.50 per share. What would be your total return on your KSU Corporation investment? Assuming you continue to hold the stock, calculate your after-tax return. How is your realized after-tax return different if you sell the stock? In both cases, assume you are in the 25 percent federal marginal tax bracket and 15 percent long-term capital gains and qualified dividends tax bracket and there is no state income tax on investment income.

A company has a 13% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:

1. What is each project's NPV? Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent.

   Project A: $  

   Project B: $  

2. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places.

   Project A:   %

   Project B:   %

3. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round your answers to two decimal places.

   Project A:   %

   Project B:   %

4. Construct NPV profiles for Projects A and B. If an amount is zero, enter 0. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent.

   Discount Rate	NPV Project A	NPV Project B
   0%	$	$
   5
   10
   12
   15
   18.1
   24.18

5. Calculate the crossover rate where the two projects' NPVs are equal. Do not round intermediate calculations. Round your answer to two decimal places.

     %

6. What is each project's MIRR at a WACC of 18%? Do not round intermediate calculations. Round your answers to two decimal places.

   Project A:   %

   Project B:   %

Project L costs $65,000, its expected cash inflows are $12,000 per year for 8 years, and its WACC is 9%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places.

A store has 5 years remaining on its lease in a mall. Rent is $2,100 per month, 60 payments remain, and the next payment is due in 1 month. The mall's owner plans to sell the property in a year and wants rent at that time to be high so that the property will appear more valuable. Therefore, the store has been offered a "great deal" (owner's words) on a new 5-year lease. The new lease calls for no rent for 9 months, then payments of $2,500 per month for the next 51 months. The lease cannot be broken, and the store's WACC is 12% (or 1% per month).

1. Should the new lease be accepted? (Hint: Be sure to use 1% per month.)
2. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and old leases? (Hint: Find FV of the old lease's original cost at t = 9; then treat this as the PV of a 51-period annuity whose payments represent the rent during months 10 to 60.) Do not round intermediate calculations. Round your answer to the nearest cent.
3. The store owner is not sure of the 12% WACC—it could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases? (Hint: Calculate the differences between the two payment streams; then find its IRR.) Do not round intermediate calculations. Round your answer to two decimal places.
     

Consider the following possible stock prices in one year for STY stock.

Possible Outcome Price Probability

Pessimistic 150 25%

Most likely 220 45%

Optimistic 250 30%

A) If the STY stock is currently trading at $200, What is the expected return of STY stock? Enter your answer as a percent, do not include the % sign. Round your final answer to two decimals.

B) If the STY stock is currently trading at $200, What is the standard deviation of STY stock returns? Enter your answer as a percent, do not include the % sign. Round your final answer to two decimals.

An electric utility is considering a new power plant in northern Arizona. Power from the plant would be sold in the Phoenix area, where it is badly needed. Because the firm has received a permit, the plant would be legal; but it would cause some air pollution. The company could spend an additional $40 million at Year 0 to mitigate the environmental problem, but it would not be required to do so. The plant without mitigation would cost $270.22 million, and the expected cash inflows would be $90 million per year for 5 years. If the firm does invest in mitigation, the annual inflows would be $93.42 million. Unemployment in the area where the plant would be built is high, and the plant would provide about 350 good jobs. The risk adjusted WACC is 16%.

1. Calculate the NPV and IRR with mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places.
   NPV: $   million
   IRR:   %

   Calculate the NPV and IRR without mitigation. Enter your answer for NPV in millions. For example, an answer of $10,550,000 should be entered as 10.55. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to two decimal places.
   NPV: $   million
   IRR:   %

2. How should the environmental effects be dealt with when evaluating this project?
   1. The environmental effects should be treated as a sunk cost and therefore ignored.
   2. If the utility mitigates for the environmental effects, the project is not acceptable. However, before the company chooses to do the project without mitigation, it needs to make sure that any costs of "ill will" for not mitigating for the environmental effects have been considered in the original analysis.
   3. The environmental effects should be treated as a remote possibility and should only be considered at the time in which they actually occur.
   4. The environmental effects if not mitigated would result in additional cash flows. Therefore, since the plant is legal without mitigation, there are no benefits to performing a "no mitigation" analysis.
   5. The environmental effects should be ignored since the plant is legal without mitigation.
3. Should this project be undertaken?
   1. The project should be undertaken since the NPV is positive under both the "mitigation" and "no mitigation" assumptions.
   2. Even when no mitigation is considered the project has a negative NPV, so it should not be undertaken.
   3. The project should be undertaken only if they do not mitigate for the environmental effects. However, they want to make sure that they've done the analysis properly due to any "ill will" and additional "costs" that might result from undertaking the project without concern for the environmental impacts.
   4. The project should be undertaken only under the "mitigation" assumption.
   5. The project should be undertaken since the IRR is positive under both the "mitigation" and "no mitigation" assumptions.