1. Calculate the NPV for the following project if the firm's cost of capital is 8.2%.

A.   $274,698
B.   $342,130
C.   $384,956
D.   $196,999

2.Assuming that the cash flows are reinvested at the company's cost of capital, which is 6.8%, what is the Modified Internal Rate of Return (MIRR) for the following project?

A.   4.127%
B.   9.836%
C.   10.241%
D.   6.507%

3.Calculate the Payback Period for the following investment.

A. 2.875 years
B.   2.325 years
C.   3.625 years
D.   4.175 years

QUESTION 41

1. Sally Homes invested in a diversified portfolio of equities about 5 years ago. Overall, the performance has been in line with the market. However, Stock A, which Sally has always thought was a good company, has recently been handily outperforming the averages. Despite recent news articles and analyst reports indicating a potential slowdown in earnings, Sally moved an additional 5% of her portfolio into Stock A. Which of the following behavioral mistakes may she have made?

   		a. Representativeness.
   		b. Cognitive dissonance.
   		c. Irrational escalation.
   		d. Both b & c.

QUESTION 42

1. John Bell, a money manager at a large regional investment firm, has been outperforming the market for several years. He's considering a large investment in Stock Q because the company's last three product introductions sold poorly. He thinks the company is well managed, but just had bad luck recently. He sorted through several analyst reports and found two that support his opinion. If he buys the stock, which behavioral mistakes may he be making? (1) Overconfidence. (2) Anchoring. (3) Gambler's fallacy. (4) Confirmation bias.

   		a. 1 and 2.
   		b. 2 and 3.
   		c. 1, 3 and 4.
   		d. 1, 2, 3 and 4.

QUESTION 5

1. A put option on UK pounds has a strike price of $2.05/£ and a cost of $0.02. What is the break-even price for the option?

QUESTION 6

1. Andrea Cujoli is a currency speculator who enjoys “betting” on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Andrea thinks the yen will move to ¥128.00/$ in the next six months. Andrea should _______ to profit from changing currency values.

QUESTION 7

1. A _______ is the term used to describe a foreign currency agreement between two parties to exchange a given amount of one currency for another, and after a period of time, to give back the original amounts.

QUESTION 8

1. An agreement to exchange interest payments based on a fixed payment for those based on a variable rate (or vice versa) is known as a/an:

QUESTION 9

1. Which following statement is Incorrect?

Corporation Income Statements (excerpt)

(dollars in millions) 2019 2018 Sales to customers $71,890 $70,074 Cost of products sold 21,685 21,536 Gross profit 50,205 48,538 Selling, marketing and administrative expenses 19,945 21,203 Research and development expense 9,095 9,046 In-process research and development 29 224 Interest income -368 -128 Interest expense, net of portion capitalized 726 552 Other (income)expense, net 484 -2,064 Restructuring 491 509 Earnings before provision for taxes on income 19,803 19,196 Provision for taxes on income 3,263 3,787 Net earnings $16,540 $15,409 Horizontal Analysis Compute the difference in each line item from 2018 to 2019. Using 2018 as a base year, determine the change and percentage change in each line item from 2018 to 2019. Did sales to customers increase or decrease from 2018 to 2019? Did net income increase for decrease from 2018 to 2019? What line item(s) is (are) driving the differences between sales to customers and net income from 2018 to 2019? Vertical Analysis Compute each line item as a percentage of sales for 2018 and 2019. Which line items makes up the largest proportion of sales in 2018 and 2019? (Keep in mind that some of the items like gross profit and earnings before provision for taxes on income are subtotals.) Comment of any changes in the income and expenses as a percent of sales from 2018 and 2019.

a. You have just purchased the options listed below. Based on the information given, indicate whether the option is in the money, out of the money, or at the money, whether you would exercise the option if it were expiring today, what the dollar profit would be, and what the percentage return would be. (Enter “0” if there is no profit or return from not exercising the option. Round your answer to 2 decimal places.)

b. Now suppose that time has passed and the stocks’ prices have changed as indicated in the table below. Recalculate your answers to part a.

You are attempting to value a put option with an exercise price of $105 and one year to expiration. The underlying stock pays no dividends, its current price is $105, and you believe it has a 50% chance of increasing to $122 and a 50% chance of decreasing to $88. The risk-free rate of interest is 10%. Calculate the value of a put option with exercise price $105. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Monitoring of Receivables

The Russ Fogler Company, a small manufacturer of cordless telephones, began operations on January 1. Its credit sales for the first 6 months of operations were as follows:

Throughout this entire period, the firm’s credit customers maintained a constant payments pattern: 10% paid in the month of sale, 50% paid in the first month following the sale, and 40% paid in the second month following the sale.

1. What was Fogler’s receivables balance at the end of March and at the end of June? Do not round intermediate calculations. Round your answers to the nearest dollar.

   March receivables: $  

   June receivables: $  

2. Assume 90 days per calendar quarter. What were the average daily sales (ADS) and days sales outstanding (DSO) for the first quarter and for the second quarter? Do not round intermediate calculations. Round ADS answers to the nearest dollar and DSO answers to one decimal place.

   1st Quarter ADS: $  

   1st Quarter DSO:       days

   2nd Quarter ADS: $  

   2nd Quarter DSO:      days

   What were the cumulative ADS and DSO for the first half-year? Do not round intermediate calculations. Round ADS answer to the nearest dollar and DSO answer to one decimal place.

   Cumulative Quarter ADS: $  

   Cumulative Quarter DSO:      days

3. Construct an aging schedule as of June 30. Use account ages of 0–30, 31–60, and 61–90 days. Do not round intermediate calculations. Round your answers for monetary values to the nearest dollar and for percentage values to the nearest whole number. If no entry is required, enter "0".

   Age of Accounts (days)		Dollar Value	Percent of Total
   0 - 30		$		%
   31 - 60
   61 - 90
   		$		%

4. Construct the uncollected balances schedule for the second quarter as of June 30. Do not round intermediate calculations. Round your answers for monetary values to the nearest dollar and for percentage values to the nearest whole number. If no entry is required, enter "0".

   Quarter 2		Sales		Receivables	Receivables/Sales
   April		$		$		%
   May
   June
   				$		%

A lease has five annual payments of $115,000. The leased asset would cost $500,000 to buy, would be depreciated straightline to a zero salvage value over 5 years, and has an actual salvage value of zero. The firm can borrow at 8 percent on a pretax basis and has a tax rate of 23 percent. What is the net advantage of leasing?

ABC Company is experiencing hard capital rationing and will not be able to invest more than $1,000,000 this year. The firm is considering four mutually exclusive projects with the cash flows presented below. If the firm’s cost of capital is 8% per year, answer the following questions:

-Find each project’s net present value and explain what the results suggest

-Find each project’s profitability index and explain what the results suggest

-Find each project’s internal rate of return and explain what the results suggest

-Given the above findings, which project(s) should the firm accept and why?

The State of Florida refused to expand Medicaid included in the Affordable Care Act (ACA).   Hence, the U.S. Department of Health and Human Services (DHHS) gave a stimulus grant of $100,000 to the Florida Department of Children and Families to spend on healthcare services. DCF is required to allocate the money in the way that saves the greatest number of quality-adjusted life-years (QALYs). After much analysis, DCF developed a list of possible programs and estimated their expected health benefits and resources costs. These are as follows:

Each program has benefits that are independent of the benefits of other programs. Moreover, each program is divisible into fractions.

Suppose the agency has a budget of $100,000. Which of the programs should the DCF fund? What are total costs and total benefits attributable to each funded program?

Rather than using the money for the program above, DCF decides to implement a screening program that it can implement in several locations. This program can be carried out at any of the five possible levels or variations listed below, but only one level will be implemented. Each level represents a different mix of behavioral activities. The costs and benefits of each level are as follows:

Which variation, if any, of the screening program should be undertaken given the agency’s budget? And in how many locations the selected program will be implemented?

Q1) Tawes & Co. has 100,000 semiannual coupon bonds outstanding, each with a par value of $1,000, coupon rate of 8%, and maturity of 15 years. Each bond sells at 110% of par. Tawes & Co. also has 1,000,000 shares of common stock outstanding that sell for $140 per share and have a beta of 1.7. The risk-free rate is 3%, market risk premium is 7%, and the corporate tax rate is 30%. What is Tawes & Co.'s weighted average cost of capital (WACC)?

answer by hand so I can see the steps.

A) 7.78%

B) 11.04%

C) 9.94%

D) 11.86%

E) 10.47%

Hali’s current stock price is $36.00, its last dividend was $2.40, and its required rate of return is 12%. If dividends are expected to grow at a constant rate, g, in the future, and if the required rate of return is expected to remain at 12%, what is Hali’s expected stock price 5 years from now?

Find out:

a) The constant growth rate

b) Expected stock price 5 years from now

Scenario 1: Leo is the sole owner of Leo Construction, a proprietorship whose profit was $500,000 for 2017, he had income of $10,000 from interest generated by his personal bank savings

Scenario 2: Leo and four nephews have equal ownership rights in a partnership called Leo and Nephews Construction Company. The company had a profit of $500,000 for 2017, and each of the five partners received $2,000 in interest income.

Scenario 3: Leo and his four nephews decide to incorporate their company as Leo Associates, Inc. In 2017, the corporation earnings before income taxes was $500,000 and all after-tax profit was distributed as dividends to the five shareholders, each one receiving the same amount. Also each of the five stakeholders received $2,000 in interest income.

(1) For the above three scenarios, assuming Leo and his four nephews are all married and filing jointly with no dependent children, and there is no other deductions. For each scenario: (a) How much federal income tax each individual should pay? (b) How much income tax the IRS would receive in total?