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?

A company is projected to have a free cash flow of $357 million next year, growing at a 6% rate until the end of year 3. After that, cash flows are expected to grow at a stable rate of 2.4% in perpetuity. The company's cost of capital is 9.1%. The company owes $96 million to lenders and has $14 million in cash. If it has 207 million shares outstanding, what is your estimate for its stock price? Round to one decimal place. (e.g., $4.32 = 4.3)

Use the following information for Stock K and Stock M to solve the following problems

What is the expected return for stock K? For stock M?

What is the variance for Stock K? For Stock M?

What is the standard deviation for Stock K? For Stock M?

An individual plans to invest $5,000: $3,000 in Stock K and $2,000 in Stock M. What are the portfolio weights for this portfolio?

Using the portfolio weights just computed, what is the expected return for the portfolio?

Given the weight, computer the variance and standard deviation of the portfolio?

Create a 10 year savings plan for yourself, the source where the money will come from and calculate the interest you expect to receive year over year. Also share where/how you will invest the money (stocks, bonds, 401K). If you plan to have multiple sources, share that as well.

Your first job out of college will pay you $63,000 in year 1 (exactly one year from today), growing at a rate of 2.9% per year thereafter. You will also receive a one time bonus of $41,000 at the same time as your first salary. You plan to retire in 38 years (you'll receive 38 years of salary). If the applicable discount rate is 6%, what is the present value of these future earnings today? Round to the nearest cent.

Tatum can borrow at 6.7 percent. The company currently has no debt, and the cost of equity is 12.9 percent. The current value of the firm is $595,000. The corporate tax rate is 21 percent. What will the value be if the company borrows $310,000 and uses the proceeds to repurchase shares? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.