​Beryl's Iced Tea currently rents a bottling machine for $ 53000 per​ year, including all maintenance expenses. It is considering purchasing a machine​ instead, and is comparing two​ options: A. Purchase the machine it is currently renting for $ 150000. This machine will require $ 20000 per year in ongoing maintenance expenses. B. Purchase a​ new, more advanced machine for $ 250000. This machine will require $ 15000 per year in ongoing maintenance expenses and will lower bottling costs by $ 10000 per year.​ Also, $ 40000 will be spent upfront training the new operators of the machine. Suppose the appropriate discount rate is 8 % per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each​ year, as is the rental of the machine. Assume also that the machines will be depreciated via the​ straight-line method over seven years and that they have a​ ten-year life with a negligible salvage value. The marginal corporate tax rate is 30 %. Should​ Beryl's Iced Tea continue to​ rent, purchase its current​ machine, or purchase the advanced​ machine? To make this​ decision, calculate the NPV of the FCF associated with each alternative.​ (Note: the NPV will be​ negative, and represents the PV of the costs of the machine in each​ case.)

(Real options and capital budgeting​) You have come up with a great idea for a​ Tex-Mex-Thai fusion restaurant. After doing a financial analysis of this​ venture, you estimate that the initial outlay will be $5.7 million. You also estimate that there is a 50 percent chance that this new restaurant will be well received and will produce annual cash flows of $760,000 per year forever​ (a perpetuity), while there is a 50 percent chance of it producing a cash flow of only ​$240,000 per year forever​ (a perpetuity) if it​ isn't received well.

a. What is the NPV of the restaurant if the required rate of return you use to discount the project cash flows is 12 ​percent?

b. What are the real options that this analysis may be​ ignoring?

c. Explain why the project may be worthwhile even though you have just estimated that its NPV is​ negative?

DEF stock currently trades at $112. Use the chart for the questions.

1. What is the exercise value of the 115 Feb. put option? Round intermediate steps to four decimals and your final answer to two decimals. Do not use currency symbols or words when entering your response.

2. Assuming that the annual risk-free rate is 5% and the time until expiration is 6 months, an investor could earn an arbitrage profit by shorting a synthetic 110 Jan. put option and buying a 110 Jan. put option in the marketplace.

a. true

b. false

3. Suppose that you decided to set up a short strip position using the Jan. 105 options. Find your profit/loss if the stock trades for $110 when the options expire. Round intermediate steps to four decimals and your final answer to two decimals.

$350

4. Suppose that you decided to set up a long strap position using the Feb. 110 options. Find your profit/loss if the stock trades for $127 when the options expire. Round intermediate steps to four decimals and your final answer to two decimals.

$2,025

I've bolded the answers I got and I would just like to check my work. Thank you!

STATEMENT OF CASH FLOWS W.C. Cycling had $55,000 in cash at year-end 2014 and $25,000 in cash at year-end 2015. The firm invested in property, plant, and equipment totaling $250,000. Cash flow from financing activities totaled $170,000. a. What was the cash flow from operating activities? b. If accruals increased by $25,000, receivables and inventories increased by $100,000, and depreciation and amortization totaled $10,000, what was the firm’s net income?

If a firm’s ROE is low and management wants to improve it, explain how using more debt might help.

Profit margins and turnover ratios vary from one industry to another. What differences would you expect to find between the turnover ratios, profit margins, and DuPont equa- tions for a grocery chain and a steel company?

1- Your firm is has equity of $2,460,000.00 and debt of $1,480,000.00 and the cost of the equity is 11.70% and the cost of the debt is 6.60%. Given that the tax rate is 15.00%, what is your firm's weighted average cost of capital (WACC)? (enter your value as a percent (i.e. 20.5 for 20.5%) tolerance is 0.1)

2- Your firm is has equity of $2,270,000.00 and debt of $4,060,000.00. The firm has been estimate to have a beta of 1.50 and the expected market risk premium (MRP) is 4.72% with the risk-free rate at 3.58%. The firm just recently issued bonds which traded at $905.58 on it's issue date and they have a 10-year maturity (assume standard corporate bonds). The stated rate on the bonds was 3.60%. What is your firm's weighted average cost of capital (WACC) if the tax rate is 30.00%? (enter your value as a percent (i.e. 20.5 for 20.5%) tolerance is 0.1)

The Kretovich Company had a quick ratio of 1.2, a current ratio of 3.0, a days sales outstanding of 36.5 days (based on a 365-day year), total current assets of $795,000, and cash and marketable securities of $130,000. What were Kretovich's annual sales? Do not round intermediate calculations. Round your answer to the nearest dollar.

Assume you are considering a portfolio containing two​ assets, L and M. Asset L will represent 56 % of the dollar value of the​ portfolio, and asset M will account for the other 44 %. Assume that the portfolio is rebalanced at the end of each year. The expected returns over the next 6​ years, 2018dash2023​, for each of these assets are summarized in the following​ table:

a. Calculate the expected portfolio​ return, r Subscript p​, for each of the 6 years. b. Calculate the average expected portfolio​ return, r overbar Subscript p​, over the​ 6-year period. c. Calculate the standard deviation of expected portfolio​ returns, s Subscript p​, over the​ 6-year period. d. Assume that asset L represents 44 % of the portfolio and asset M 56 %. Calculate the average expected return and standard deviation of expected portfolio returns over the​ 6-year period. e. Compare your answers to the answers from parts b and c.

Assume you are considering a portfolio containing two​ assets, L and M. Asset L will represent 44 % of the dollar value of the​ portfolio, and asset M will account for the other 56 %. The projected returns over the next 6​ years, 2018-2023​, for each of these assets are summarized in the following​ table: a. Calculate the projected portfolio​ return, r p​, for each of the 6 years. b. Calculate the average expected portfolio​ return, r overbar Subscript p​, over the​ 6-year period. c. Calculate the standard deviation of expected portfolio​ returns, s Subscript p​, over the​ 6-year period. d. How would you characterize the correlation of returns of the two assets L and​ M? e. Discuss any benefits of diversification achieved through creation of the portfolio.

Two friends, Kyle and Wes, graduated college and started working on their career at the same time. Both friends were 25 at the time.

As soon as Kyle was eligible for the 401K benefit he started depositing $100 per month for the next ten years.

Wes decided he so enjoyed having a real income that he wanted to spend it on fast cars, awesome threads, the most recent smart phone and video game system, and clubbing every weekend. Wes chose not to invest in his 401K for a while.

After ten years, Kyle decided to buy a house and couldn't afford to invest in his 401K anymore, so he stopped with his $100 per month deposit, but never touched his balance.

After ten years, Wes's party days were slowing down, he no longer needed the fancy clothes, and didn't need the newest gadgets as much, so he started investing $100 per month in his 401K for the next twenty years.

Both friends averaged 8% over the life of their investment in a mixed mutual fund.

At age 55, the friends decided to see where they stood for retirement savings. Calculate the following:

1. What is Wes' total investment after investing $100 per month for 20 years?

2. Who has the higher balance?

3. What does this tell us about the time value of money?

Respond to the following paragraph :

The features that drive the valuations that differ in Vegas Chips are: The forecasted rate of growth of earnings per year, the way the ratios change over the years and the dividend pay ratio of earnings.

The additional information that would be required by the investors to gain confidence in the projections would be to look at the reports done by the analysts and see the connection in the investing pattern. With that information they should plan whether to invest in the project or not. They should see what factors are affecting the companies growth, the competition in the industry, the probability of multiple projections, earning and dividend payouts.

Note: This problem is for the 2018 tax year.

On November 1, 2008, Janet Morton and Kim Wong formed Pet Kingdom, Inc., to sell pets and pet supplies. Pertinent information regarding Pet Kingdom is summarized as follows:

Pet Kingdom's business address is 1010 Northwest Parkway, Dallas, TX 75225; its telephone number is (214) 555-2211; and its e-mail address is [email protected].

The employer identification number is 11-1111111, and the principal business activity code is 453910.

Janet and Kim each own 50% of the common stock; Janet is president and Kim is vice president of the company. No other class of stock is authorized.

Both Janet and Kim are full-time employees of Pet Kingdom. Janet's Social Security number is 123-45-6789, and Kim's Social Security number is 987-65-4321.

Pet Kingdom is an accrual method, calendar year taxpayer. Inventories are determined using FIFO and the lower of cost or market method. Pet Kingdom uses the straight-line method of depreciation for book purposes and accelerated depreciation (MACRS) for tax purposes.

During 2018, the corporation distributed cash dividends of $250,000.

Pet Kingdom's financial statements for 2018 are shown below.

*Depreciation for tax purposes is $136,000.

During 2018, Pet Kingdom made estimated tax payments of $56,000 each quarter to the IRS.

If an answer is zero, enter "0".

Enter all amounts as positive numbers.

If required, round final answers to the nearest dollar.

Please help with Schedule M-1, M-2, M-3