Southern airline inc.announced that its net income in the first quarter jumped percent to $100 million as number of passenger climbed. The airline also booked of $40 million from the sales of 2 aircraft. According to the survey of 6 analysts average estimate of the first quarter net income for the airline was $200 miliion. After earning announcement what would be the possible movement of the company's stock. Please explain with any financial concepts and theories?

You own a 10-acre vineyard and earn income by selling your grapes to wineries. Your vineyard is currently planted to Merlot grapes, but you are thinking of replanting with Syrah grapes because they are commanding a higher market price per ton. Merlot fetches $1400 per ton but Syrah sells for $2900 per ton, those prices are expected to remain stable, and you produce 5 tons per year per acre (so 50 tons per year total). Either way, you plan to sell the vineyard 5 years from now (at the end of the year) for 4-times (4x) the annual income (in year 5) from the sale of grapes (that is, you'll get the income from grape sales and then sell the vineyard for 4 times that amount at the end of year 5). However, if you switch to Syrah, it will cost you $117,000 immediately and the vines won’t produce any grapes until year 4 (that is, years 1-3 will have no sales if you plant Syrah, but years 4 and 5 will). The applicable discount rate is 8% per year. What is the NPV of switching? Round to the nearest cent. ​[Hint: Create a timeline showing the incremental annual cash flows from switching and find their NPV. Some cash flows will be negative (first 3 years) and some (years 4 and 5) will be positive.]

One month ago, a share was worth $192. Today it is worth $216. What is the 1-month return on the stock?

Suppose you have $600 in your account. You bought 2 shares of Apple stock (AAPL) at $204/share and 1 share of Microsoft stock (MSFT) at $102/share. ___, the weight of MSFT is ____, and the weight of cash ____

The weight of AAPL in your portfolio is:

The weight of MSFT in your portfolio is:

The weight of Cash in your portfolio is:

Please give your answers as two decimals. For example "fifty percent" would be "0.50".

Prepare a 2018 balance sheet for Rogers Corp. based on the following information: Cash = $360,000; Patents and copyrights = $760,000; Accounts payable = $500,000; Accounts receivable = $159,000; Tangible net fixed assets = $3,500,000; Inventory = $235,000; Notes payable = $180,000; Accumulated retained earnings = $1,265,000; Long-term debt = $1,530,000. What is the common stock account balance for the company?

You are a freshman in college and are planning a trip to Europe when you graduate from college at the end of four years. You plan to save the following amounts annually, starting today: $550, $720, $720, and $800. If you can earn 7.15 percent annually, how much will you have at the end of four years? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.)

Replacement Analysis The Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $100,000. It had an expected life of 10 years when it was bought and its remaining depreciation is $10,000 per year for each year of its remaining life. As older flange-lippers are robust and useful machines, this one can be sold for $20,000 at the end of its useful life. A new high-efficiency digital-controlled flange-lipper can be purchased for $140,000, including installation costs. During its 5-year life, it will reduce cash operating expenses by $55,000 per year, although it will not affect sales. At the end of its useful life, the high-efficiency machine is estimated to be worthless. MACRS depreciation will be used, and the machine will be depreciated over its 3-year class life rather than its 5-year economic life, so the applicable depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%. The old machine can be sold today for $55,000.

The firm's tax rate is 35%, and the appropriate cost of capital is 13%. If the new flange-lipper is purchased, what is the amount of the initial cash flow at Year 0? Round your answer to the nearest whole dollar. $

What are the incremental net cash flows that will occur at the end of Years 1 through 5? Do not round intermediate calculations. Round your answers to the nearest whole dollar. CF1 $ CF2 $ CF3 $ CF4 $ CF5 $ What is the NPV of this project? Do not round intermediate calculations. Round your answer to the nearest whole dollar. $

Should Everly replace the flange-lipper?

You own a 10-acre vineyard and earn income by selling your grapes to wineries. Your vineyard is currently planted to Merlot grapes, but you are thinking of replanting with Syrah grapes because they are commanding a higher market price per ton. Merlot fetches $1600 per ton but Syrah sells for $2700 per ton, those prices are expected to remain stable, and you produce 5 tons per year per acre (so 50 tons per year total). Either way, you plan to sell the vineyard 5 years from now (at the end of the year) for 5-times (5x) the annual income (in year 5) from the sale of grapes (that is, you'll get the income from grape sales and then sell the vineyard for 5 times that amount at the end of year 5). However, if you switch to Syrah, it will cost you $106,000 immediately and the vines won’t produce any grapes until year 4 (that is, years 1-3 will have no sales if you plant Syrah, but years 4 and 5 will). The applicable discount rate is 10% per year. What is the NPV of switching? Round to the nearest cent. [Hint: Create a timeline showing the incremental annual cash flows from switching and find their NPV. Some cash flows will be negative (first 3 years) and some (years 4 and 5) will be positive.

Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000.

Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront.

Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront.

Assuming Ann makes payments for 30 years, what is Ann’s annualized IRR from mortgage B?

Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 2 years before she sells the house and pays the bank the balance, what is Ann’s annualized IRR from mortgage B?

1. A firm is considering two mutually exclusive projects, A and B. The projects are different in that they have different returns depending on general economic conditions. The firm forecasts that return on the market, and the returns on each project, along with their associated probabilities will be given by the following table. You can assume a 5% risk free rate and a 6% market risk premium. Assume the CAPM holds. Compare the expected returns to the cost of capital for each project and decide which project the firm should choose.

Here are data on two firms:

a-1. Calculate the higher economic value added? (Do not round intermediate calculations. Enter your answers in millions)

a-2. Which firm has the higher economic value added?

b-1. Calculate the higher economic value added per dollar of invested capital? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

b-2. Which has higher economic value added per dollar of invested capital?

 Sunrise Industries wishes to accumulate funds to provide a retirement annuity for its vice president of​ research, Jill Moran. Ms.​ Moran, by​ contract, will retire at the end of exactly 12 years. Upon​ retirement, she is entitled to receive an annual​ end-of-year payment of $ 42,000 for exactly 20 years. If she dies prior to the end of the 20-year period, the annual payments will pass to her heirs. During the 12 year "accumulation period," Sunrise wishes to fund the annuity by making​ equal, annual, ​ end-of-year deposits into an account earning 9.0 % interest. Once the 20 year "distribution period"​ begins, Sunrise plans to move the accumulated monies into an account earning a guaranteed 12.0% per year. At the end of the distribution​ period, the account balance will equal zero. Note that the first deposit will be made at the end of year 1 and that the first distribution payment will be received at the end of year 13.

To Do

a. Draw a time line depicting all of the cash flows associated with​ Sunrise's view of the retirement annuity.

b. How large a sum must Sunrise accumulate by the end of year 12 to provide the 20-year, $42,000 annuity?

c. How large must​ Sunrise's equal, ​ annual, end-of-year deposits into the account be over the 12​-year accumulation period to fund fully Ms.​ Moran's retirement​ annuity?

d. How much would Sunrise have to deposit annually during the accumulation period if it could earn

10.0 % rather than 9.0 % during the accumulation​ period?

e. How much would Sunrise have to deposit annually during the accumulation period if Ms.​ Moran's retirement annuity were a perpetuity and all other terms were the same as initially​ described?

A protective collar involves buying an out-of-the-money put and writing an out-of-the-money call on an underlying asset that you own. Let’s say you own an S&P 500 index security that is currently trading at $30/share. You bought the index at $10 per share so you currently have a big capital gain. You don’t want to sell your shares, but you want to lock in your profits with a protective collar for the next year. You want to make sure you can sell your shares for at least $29/share. The standard deviation of returns on the S&P 500 is 20% and the assume risk free rate is 2%.

a) How much would it cost to buy the put?

b) What strike price should you set on the call so that you make the same premium that you paid for the put (zero net cost)?

c) Draw the net profit diagram for the entire protective collar position (long stock, long put, short call) at maturity (including the premiums). Carefully label in detail all axis, strike prices, payoffs, etc.
 

Mary owns a U.S. based company and wants to open a store in Japan. She will have to exchange her USD for Yen in order to finance the rent and payroll. Which of the following situations would put her at the greatest advantage as far as the exchange rates go?