Following her 18th birthday, Madison began investing $26 at the end of each week in an account earning 6% per year compounded weekly. She plans to continue making weekly investments until she turns 68. If she had waited until she turned 48, how much would she have to invest weekly in order to have the same retirement nest egg at age 68? Round to the nearest cent.

What is the accumulated (future) sum of monthly contributions of $500 invested at an average return of 5% p.a. over 30 years? What if the average return increases to 8% from the 16th year?

Prof. Finance decides to buy a 2019 Mazda 6 Signature Edition. After paying a down payment and taxes, Prof. Finance can finance the rest of the purchase price with a loan of $24,000 for 60 months at a special finance rate offered by Mazda of 1.9% APR compounded monthly.

• He finds out that Mazda has a second offer of $1000 cash back (rebate) in place of the special 1.9% finance rate offered with the cash back being an additional down payment. Prof. Finance finds he can get 2.9% APR financing online for 60 months if he takes the $1000 cash back offer. Answer the following questions.

1. What is the effective annual rate for each loan?

2. What would be the monthly car loan payment under the Mazda’s 1.9% APR financing offer (assume a 60-month loan term)?

3. What would be the monthly car loan payment under the Mazda’s $1000 cash back offer and the 2.9% APR pre-approved financing (assume a 60-month loan term)?

4. At what APR would Prof. Finance be indifferent between the two offers? In other words, what APR (assuming a 60-month loan term) for the $1000 cash back offer would have the same monthly payment with the 1.9% APR financing offer?

5. Let’s assume you go with the offer in question #3. Construct an amortization schedule for the loan for all 60 monthly payments (see section 5-18 of the textbook). What is your loan balance after 36 months?

6. The local Mazda dealer has found a special 2.49% APR loan rate for 60 months from Citibank that Prof. Finance qualifies for if he elects the $1000 cash back option. Prof. Finance says that’s great! What would be the monthly payment under this loan?

7. Prof. Finance is more than happy with the 2.49% APR and $1000 cash back offer but wants a monthly payment of $375 (assume a 60-month loan term) and realizes he will have to put more money down. How much additional money will Prof. Finance have to put down in order to achieve his target monthly payment? Note: original loan amount with cash back was $23,000.

Both the internal and external sources of finance are very important means of funding for
entrepreneurs. How?

Your company currently has $1,000 par, 6% coupon bonds with 10 years to maturity and a price of $1,082. If you want to issue new 10-year coupon bonds at par, what

coupon rate do you need to​ set? Assume that for both​ bonds, the next coupon payment is due in exactly six months.

Can you send the excel file if I provide an email address?

This is a question on managerial decision making with excel spreadsheet. A step wise how to solve this will be appreciated for homework and not any exam. A model in excel will really help.

John’s Truck

John owns John’s Truck Rental, which is currently for sale for $650,000. He would like you to develop a five-year spreadsheet model to assist buyers in their evaluation of the company.

The company currently has a fleet of 100 trucks, which are rented out for $15,000 per year. At this rental rate, the average utilization of the fleet is 62%. He believes that for every $1,500 decrease in the annual rental rate, the utilization will increase by 7%. Conversely, the same size increase in the rental rate will lead to a decrease of the same amount. The spreadsheet model should be able to handle a change in rental rate and calculate the corresponding change in utilization- the user should not be limited to increments of $1,500 only (assume that fractional values of utilization are acceptable as these are annual averages of utilization). The annual rental rate should be set once and held steady for all five years of the model.

The cost of maintaining the fleet runs $4,800 per truck per year (regardless of utilization), which includes inspection fees, licenses, normal maintenance, and storage. These maintenance costs are expected to increase by 9% per year. The company has fixed office costs of $60,000 per year, which are expected to remain stable, and pays property taxes of $35,000, which is expected to grow at a rate of 3% per year. Profits are subject to a 30% income tax rate (and losses, if incurred, are not taxed).

At the end of five years, it is assumed that the buyer will resell the business for cash. John estimates the selling price at that time to be three times the gross revenue in that final year. Cash flow in the final year would include cash from the sale of the business, which would be taxed at the same rate as annual income (and we will assume full depreciation of the trucks has already occurred, thus no tax effects). Investment profit for the buyers is defined to be the Net Present Value of the annual cash flows (all operating revenues and expenses are in cash), computed at a discount rate of 10%. The calculation of NPV includes the purchase price, incurred at the beginning of Year 1, and net income from the operations (include the sale price in Year 5) over five years.

To do

1. Build the spreadsheet model to solve this problem. Make sure you follow the guidelines for good spreadsheet design including proper cell referencing, good flow/layout, etc. Your grade on this portion of the HW reflects having correct calculations, following guidelines and creating a well-designed and easy-to-use worksheet.
   • Use Excel functions to help you, as necessary.

2. John is thinking about raising the selling price. Use Goal Seek to find the point at which the NPV hits $1 million (John considers the point at which it might be hard to find a buyer).
   • What is the selling price at which this NPV occurs? Write the answer to this question somewhere (easy to find) on your worksheet.
   • Make sure to reset the selling price to the base value before proceeding to Task 3!

3. John would to have some additional analysis available on the spreadsheet to provide the potential buyers with information that might help inform their decision. He would like you to analyze the effect of the annual rental rate on the NPV. You recommend using a Data Table. Build this table on the same worksheet as your model, using values of annual rental rate ranging from $10,500 to $19,500 in increments of $1,500. Beyond including the corresponding NPV output values, you want to include the utilization rates in this table to confirm for the potential buyer that these changes are being calculated correctly.
   • Based on the results of the table alone, what is the annual rental rate that is most attractive to a potential buyer?

Homework Submission Instructions:

• Upload your completed Excel workbook
• Make sure that your model has the correct base-case input values and results!
• Use at least 2 decimal places for any fractional value.

Are rising inflation rates a threat to healthcare companies?

Compute the Earning After Tax using both FIFO & LIFO inventory evaluation methods from the following data:

Ratios are mostly calculated using data drawn from the financial statements of a firm. However, another group of ratios, called market value ratios, relate to a firm’s observable market value, stock prices, and book values, integrating information from both the market and the firm’s financial statements.

Consider the case of Green Caterpillar Garden Supplies Inc.:

Green Caterpillar Garden Supplies Inc. just reported earnings after tax (also called net income) of $9,250,000 and a current stock price of $12.00 per share. The company is forecasting an increase of 25% for its after-tax income next year, but it also expects it will have to issue 3,000,000 new shares of stock (raising its shares outstanding from 5,500,000 to 8,500,000).

If Green Caterpillar’s forecast turns out to be correct and its price/earnings (P/E) ratio does not change, what does the company’s management expect its stock price to be one year from now? (Round any P/E ratio calculation to four decimal places.)

$9.71 per share

$12.00 per share

$7.28 per share

$12.14 per share

One year later, Green Caterpillar’s shares are trading at $55.80 per share, and the company reports the value of its total common equity as $16,507,000. Given this information, Green Caterpillar’s market-to-book (M/B) ratio is__.

Can a company’s shares exhibit a negative P/E ratio?

Yes

No

Which of the following statements is true about market value ratios?

Companies with high research and development (R&D) expenses tend to have low P/E ratios.

Companies with high research and development (R&D) expenses tend to have high P/E ratios.

Explain “child” in tax law and the conditions to apply for a tax relief that comes with a “child” in malaysia. [8 marks]

RATIO ANALYSIS

Data for Barry Computer Co. and its industry averages follow.

1. Calculate the indicated ratios for Barry. Round your answers to two decimal places.

   Ratio	Barry	Industry Average
   Current	x	2.28x
   Quick	x	1.36x
   Days sales outstandinga	days	24.40 days
   Inventory turnover	x	7.06x
   Total assets turnover	x	2.05x
   Profit margin	%	1.40%
   ROA	%	2.87%
   ROE	%	6.18%
   ROIC	%	7.00%
   TIE	x	2.54x
   Debt/Total capital	%	39.21%

   
   ^aCalculation is based on a 365-day year.
   
2. Construct the DuPont equation for both Barry and the industry. Round your answers to two decimal places.

   	FIRM	INDUSTRY
   Profit margin	%	1.40%
   Total assets turnover	x	2.05x
   Equity multiplier	x	x