Questions
I don't really understand how to estimate revenue. I have been given revenues from previous years...

I don't really understand how to estimate revenue. I have been given revenues from previous years and I am being asked to estimate the revenue for FY2020 and explain my rationale. Please help thank you! Please show all relevant work so I can understand how you got to the answer. Thank you!

PS: if possible please use regression including a graph.

Year Revenue Collections
2002 $                      329,687
2003 $                      384,829
2004 $                      378,109
2005 $                      447,858
2006 $                      523,845
2007 $                      621,253
2008 $                      824,460
2009 $                      739,140
2010 $                      821,729
2011 $                  1,035,700
2012 $                      901,902
2013 $                      867,344
2014 $                      857,415
2015 $                      885,966
2016 $                      963,744
2017 $                  1,141,337
2018 $                  1,201,877
2019 $                  1,116,045
2020

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you are planning to borrow $10,000 to buy a new car. the loan is being made...

you are planning to borrow $10,000 to buy a new car. the loan is being made to you ag 8.0% annual percentage rate. you will make monthly payment for four years. how mi h of the third monthly payment will go to the paymebt of principal

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Price Volatility I: Given a $100 par value with a coupon rate of 8% paying semiannually,...

Price Volatility I: Given a $100 par value with a coupon rate of 8% paying semiannually, a term to maturity of 6 years; and an initial yield of 7%.

I.) What is the approximate duration using the shortcut formula by changing yields by 10 basis points?

ii.) What is the approximate convexity using the shortcut formula by changing yields by 10 basis points?

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A particular investment offers the following cash flows: none for 3 years, then $1500 per year...

A particular investment offers the following cash flows: none for 3 years, then $1500 per year for

5 years, then $2000 per year for 10 years. The required return is 6%.

a. What is the value of the investment today?

b. What is the value of the investment in 5 years?

c. What is the value of the investment in 8 years?

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An investor just purchased a 5-year $1,000 par value bond. The coupon rate on this bond...

An investor just purchased a 5-year $1,000 par value bond. The coupon rate on this bond is 10% annually, with interest paid every year. If the investor expects to earn 12% simple rate of return, how much the investor should pay for it?

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You purchased a house five years ago and borrowed $400,000 . The loan you used has...

You purchased a house five years ago and borrowed $400,000 .
The loan you used has 300 more monthly payments of $1,686 each, starting next month, to pay off the loan.
You can take out a new loan for $355,625 at 2.00% APR compounded monthly , with 300 more payments, starting next month to pay off this new loan.
If your investments earn 2.75% APR compounded monthly , how much will you save in present value terms by using the new loan to pay-off the original loan?

There may be rounding in this case, so pick the closest answer.

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bill clinton reportedly was paid an advance of$ 10.0million to write his book My LifeMy Life....

bill clinton reportedly was paid an advance of$ 10.0million to write his book My LifeMy Life. Suppose the book took three years to write. In the time he spent​ writing, Clinton could have been paid to make speeches. Given his​ popularity, assume that he could earn$ 8.4million a year​ (paid at the end of the​ year) speaking instead of writing. Assume his cost of capital is 9.8% per year.                           

a. What is the NPV of agreeing to write the book​ (ignoring any royalty​ payments)?

b. Assume​ that, once the book is​ finished, it is expected to generate royalties of $ 5.3

million in the first year​ (paid at the end of the​ year) and these royalties are expected to decrease at a rate of 30%

per year in perpetuity. What is the NPV of the book with the royalty​ payments?

a. What is the NPV of agreeing to write the book​ (ignoring any royalty​ payments)?

The NPV of agreeing to write the book is −10.963

I was able to get an answer for part a but can solve part b please help

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Consider the case of Alexander Industries: Alexander Industries is considering a project that requires an investment...

Consider the case of Alexander Industries:

Alexander Industries is considering a project that requires an investment in new equipment of $3,360,000. Under the new tax law, the equipment is eligible for 100% bonus depreciation at t = 0 so the equipment will be fully depreciated at the time of purchase. Alexander estimates that its accounts receivable and inventories need to increase by $640,000 to support the new project, some of which is financed by a $256,000 increase in spontaneous liabilities (accounts payable and accruals). The company's tax rate is 25%.

The after-tax cost of Alexander’s new equipment is_____________

Alexander’s initial net investment outlay is_______________

Suppose Alexander’s new equipment is expected to sell for $200,000 at the end of its four-year useful life, and at the same time, the firm expects to recover all of its net operating working capital (NOWC) investment. Remember, that under the new tax law, this equipment was fully depreciated at t = 0. If the firm’s tax rate is 25%, what is the project’s total termination cash flow?

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P9–17 Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measure...

P9–17 Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following weights: 40% long-term debt, 10% preferred stock, and 50% common stock equity (retained earnings, new common stock, or both). The firm’s tax rate is 40%. Debt The firm can sell for $980 a 10-year, $1,000-par-value bond paying annual
interest at a 10% coupon rate. A flotation cost of 3% of the par value is required
in addition to the discount of $20 per bond.
Preferred stock Eight percent (annual dividend) preferred stock having a par
value of $100 can be sold for $65. An additional fee of $2 per share must be paid
to the underwriters.
Common stock The firm’s common stock is currently selling for $50 per share.
The dividend expected to be paid at the end of the coming year (2016) is $4. Its
dividend payments, which have been approximately 60% of earnings per share in
each of the past 5 years, were as shown in the following table.
Year Dividend
2015 $3.75
2014 3.50
2013 3.30
2012 3.15
2011 2.85

It is expected that to attract buyers, new common stock must be underpriced $5 per share, and the firm must also pay $3 per share in flotation costs. Dividend payments are expected to continue at 60% of earnings. (Assume that rr = rs.)
a. Calculate the after-tax cost of debt.
b. Calculate the cost of preferred stock.
c. Calculate the cost of common stock.
d. Calculate the WACC for Dillon Labs.

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Suppose that you have $1 million and the following two opportunities from which to construct a...

Suppose that you have $1 million and the following two opportunities from which to construct a portfolio:

  1. Risk-free asset earning 10% per year.

  2. Risky asset with expected return of 25% per year and standard deviation of 33%.

If you construct a portfolio with a standard deviation of 26%, what is its expected rate of return?

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Company A makes annual USD payments of 6% on a notional of USD 2,265,000. Company A...

Company A makes annual USD payments of 6% on a notional of USD 2,265,000. Company A receives annual GBP payments of 7% on a notional of GBP 1,500,000. Assume that the USD and GBP interest rates are rUSD = 4% and rGBP = 6%. The swap currently has 4 years until it matures. The next cash flow exchange will occur one year from today. If the current USD/GBP spot rate XNUSD/GBP = 1.45, what is the value of this currency swap for company A?

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An All-Pro defensive lineman is in contract negotiations. The team has offered the following salary structure:...

An All-Pro defensive lineman is in contract negotiations. The team has offered the following salary structure:


Time Salary
0 $ 6,200,000
1 $ 4,800,000
2 $ 5,300,000
3 $ 5,800,000
4 $ 7,200,000
5 $ 7,900,000
6 $ 8,700,000

  

All salaries are to be paid in lump sums. The player has asked you as his agent to renegotiate the terms. He wants a $9.7 million signing bonus payable today and a contract value increase of $1,700,000. He also wants an equal salary paid every three months, with the first paycheck three months from now. If the interest rate is 5.2 percent compounded daily, what is the amount of his quarterly check? Assume 365 days in a year. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  

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Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt–equity ratio...

Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt–equity ratio of .68. It’s considering building a new $65.8 million manufacturing facility. This new plant is expected to generate aftertax cash flows of $7.83 million in perpetuity. There are three financing options:

  1. A new issue of common stock: The required return on the company’s new equity is 15 percent.
  2. A new issue of 20-year bonds: If the company issues these new bonds at an annual coupon rate of 7.3 percent, they will sell at par.
  3. Increased use of accounts payable financing: Because this financing is part of the company’s ongoing daily business, the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long-term debt of .13. (Assume there is no difference between the pretax and aftertax accounts payable cost.)


If the tax rate is 38 percent, what is the NPV of the new plant? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Round your answer to 2 decimal places, e.g., 32.16.)

Net present value            $

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Ward Corp. is expected to have an EBIT of $2,750,000 next year. Depreciation, the increase in...

Ward Corp. is expected to have an EBIT of $2,750,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $182,000, $119,000, and $132,000, respectively. All are expected to grow at 19 percent per year for four years. The company currently has $21,500,000 in debt and 820,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.0 percent indefinitely. The company’s WACC is 9.3 percent and the tax rate is 35 percent.

What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
  
Share price            $

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The most recently issued 4 week T-Bill is quoted at a discount of 1.91. a. What...

The most recently issued 4 week T-Bill is quoted at a discount of 1.91.

a. What is the price of this T-Bill?

b. What is the bond-equivalent yield?

Assume 4 weeks is 30 days, and the par value is $10,000. Express your answers rounded to two decimal places.

In: Finance