Amanda, who is in the 32% marginal tax bracket, must decide between two investment opportunities, both of which require an initial cash outlay of $150,000 at the beginning of year 1. Investment A: This investment will yield $25,500 before-tax cash flow at the end of years 1, 2 and 3. This cash represents ordinary taxable income. At the end of year 3, Amanda can liquidate the investment and recover her $150,000 cash outlay. She must pay a nondeductible (for tax purposes) $750 annual fee at the end of years 1, 2, and 3 to maintain Investment A. Investment B: This investment will not yield any before-tax cash flow during the period over which Amanda will hold the investment. At the end of year 3, Amanda will be able to sell Investment B for $215,000 cash. Her $65,000 profit on the sale will be a capital gain. Required: Assuming a 6% discount rate and end-of-year tax payments, determine which investment has the greater net present value.

Good day, I trust you are well. Kindly assist with below...

The company is an online retailer of books, CDs and DVDs. The company was set up five years ago by a wealthy entrepreneur, David Nile, and has now grown to the point where the board of directors have decided that a listing should be sought on the local stock exchange. David Nile owns 80% of the ordinary shares and has agreed to sell all of these as part of the public offering.

Recently, the board of directors began to debate the future dividend policy of the company, assuming the stock exchange listing would be successful. However, there was a clear divergence of views. The chairman felt that the current dividend policy was unacceptable and needed to be changed. He argued that the company had been investing heavily in its distribution methods and in advertising in the early years and that dividend policy had not been a pressing issue. However, the proposed listing must now lead to a reconsideration of the importance of dividends. The chief operating officer, on the other hand, felt that the chairman’s concerns were unfounded as the pattern of dividends had no effect on the shareholder wealth.

Information concerning the company since it was first set up is as follows:

3.1 Evaluate the views expressed by the chief operating officer and by the Chairman. (12)

3.2 Analyse the dividend policy that has been pursued to date and discuss whether a change would be in the interests of shareholders. (8)

3.3 Discuss the key points that should be considered when establishing an appropriate dividend policy for the company. (5)

A Restaurant is open only for 25 days in a month. Expenses for the restaurant include raw material for each sandwich at $6.00 per slice, $1,004.00 as monthly rental and $470.00 monthly as insurance. They consider the cost of lost sales as $5.00 per item. They are able to sell any leftover sandwiches for $3. They prepares 200.00 sandwiches and sells them at a rate of $12.00/sandwich. Today there was a party at nearby office so the demand for sandwiches rose to 226.00. How much profit did the restaurant earn today?

For both questions, please show what you typed into the TVM solver.

N:

I:

PV:

PMT:

FV:

Time of month: End or beginning

1. Rachel, who just turned 18, deposits a $15,000 gift into an interest-bearing account earning a 7.5% annual rate of interest. How much will she have in the account when she retires at age 60, assuming all interest is reinvested at the 7.5% rate? If Rachel decided she only needed $300,000 at retirement, could she retire at 59? Explain.

2. James deposited $800 at the end of the past 16 years to purchase his granddaughter, Kali, a car, James earned 8% interest compounded annually on his investment. If the car Kali chooses costs $22,999, would she have enough money in the account to purchase the vehicle? What would be the deficit or surplus?

You currently have $620k in savings. You plan on living off of a growing perpetuity which grows at 3% per year (and passing it on to your kids). You plan on retiring exactly 12 years from today, at which point you collect your first cash payment. You will not contribute any more money to the savings account before retirement, but your current $620k in savings will grow at the discount rate until you retire. How much will the first payment of the growing perpetuity be if the appropriate discount rate is 6%?

A bond issued for the purpose of building a tunnel between New Jersey and New York in which tolls are expected to pay the coupon and principal payments to the bondholders is most likely characterized as a(n):

The most likely reason an organization would issue commercial paper is to:

Which of the following is (are) correct regarding average returns?

A mortgage-backed security can be characterized as having:

Which of the following statements concerning risk is not correct?

A financial institution hopes to form an equity mutual fund that invests solely in blue-chip stocks. The most likely piece of legislation that dictates the law surrounding the fund is the:

I included the chart I would develop to identify the problem's time value of money variables for the calculation. Please use a financial calculator or financial calculator application for all problems. To receive credit for your calculations, please include the appropriate time value of money variables chart with your response. There is no need to document the time value of money formula used, as provided in the textbook.

Using a financial calculator or online application, calculate the following:

(a) The amount a person would need to deposit today to be able to withdraw $6,000 each year for ten years from an account earning 6 percent.

(b) A person is offered a gift of $5,000 now or $8,000 five years from now. If such funds could be expected to earn 8 percent over the next five years, which is the better choice?

(c) A person wants to have $3,000 available to spend on an overseas trip four years from now. If such funds could be expected to earn 6 percent, how much should be invested in a lump sum to realize the $3,000 when needed?

(d) A person invests $50,000 in an investment that earns 6 percent. If $6,000 is withdrawn each year, how many years will it take for the fund to run out?

Topperton Company has developed a new industrial product. An outlay of $8 million is required for equipment to produce the new product, and additional net working capital of $400,000 is required to support production and marketing. In addition, a one-time $400,000 (before-tax) expense will be incurred the year that the equipment is placed into service. The equipment will be depreciated on a straight-line basis to a zero book value over 6 years. Although the depreciable life is 6 years, the project is expected to have a productive life of 8 years, and it is estimated that the equipment can be sold for $1 million at that time. Revenues minus expenses are expected to be $3 million per year. The cost of capital for this project is 14%, and the relevant tax rate is 30%. What is the NPV of the new product?

Group of answer choices

$2,956,923

$3,326,891

$3,002,696

None of these

You are planning on buying $100,000 face value of Australian Commonwealth Government Bonds. The bonds mature on 15 February 2027 and have a coupon rate of 4.75%. If your purchase will settle on 27 April 2012, and the quoted yield for the bond is 5.81%, what is the cash price of the bonds to the nearest dollar?

The Securities and Exchange Commission (SEC) has the legal authority to regulate the form and content of financial statements. However, the SEC relies on the following organizations for implementation:

Financial Accounting Standards Board (FASB). Industry Committees of the American Institute of Certified Public Accountants (AICPA.)Principles and Practices Board of the Healthcare Financial Management Association (HFMA). Should the preparation and presentation of financial accounting data be regulated?

Consider the following stock price and shares outstanding information.

1. Compute the beginning and ending values for a price-weighted index and a market-value-weighted index. Assume a base value of 100 and Year 1 as the base period. Do not round intermediate calculations. Round your answers to two decimal places.

             PWI_{Year 1}:

             PWI_{Year 2}:

             VWI_{Year 1}:

             VWI_{Year 2}:

2. Compute the percentage change in the value of each index during the year. Do not round intermediate calculations. Round your answers to two decimal places.

   Percentage change in PWI:   %

   Percentage change in VWI:   %

3. Compute the percentage change for an unweighted index assuming $1,000 is invested in each stock. Do not round intermediate calculations. Round your answer to two decimal places.

     %

1.

Calculate a Standard& Poor's Index for days 1 through 5 using a beginning index value of 10. Do not round intermediate calculations. Round your answers to three decimal places.

Day 1:

Day 2:

Day 3:

Day 4:

Day 5:

2.

Calculate a Dow Jones Industrial Average for days 1 through 5. Do not round intermediate calculations. Round your answers to three decimal places.

Day 1:  

Day 2:  

Day 3:  

Day 4:  

Day 5:  

You need to accumulate $10,000. To do so, you plan to make deposits of $1,400 per year - with the first payment being made a year from today - into a bank account that pays 11% annual interest. Your last deposit will be less than $1,400 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal? Do not round intermediate calculations. Round your answer up to the nearest whole number.