Equal end-of-period semiannual payments of $500, increasing by $100 with each subsequent payment, are made to a fund paying 10 percent compounded continuously. What will the fund amount to after 7 years? What is the present worth equivalent of the total set of payments? What is the equal semiannual equivalent amount of the payments?

Please, i need Unique answer, Use your own words (don't copy and paste). Please, don't use handwriting, Use your keyboard.

Q1. Discuss in your words the purpose of a bank reconciliation. (1 point)

Q2. Prepare general journal entries for the following transactions of this company for the current year: (2 points).

Apr. 25

Sold SAR 4,500 of merchandise to CBC Corp., receiving a 10%, 60-day, SAR 4,500 note receivable.

June 24

The note of CBC Corp., received on April 25 was dishonored.

The Sisyphean company has a bond outstanding with a face value of $1,000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payment are to be made semi-annually.

How much are each of the semi-annual coupon payments? Assuming the appropriate YTM on the Sisyphean bond is 8.8%, then at what price should this bond trade?

2. 2. A firm has the following three projections of revenue estimates:

Current Year1 Year 2 Year 3

Revenue $1,500 $1,650 $1,815 $2,000

EAT $95 $106 $117 $130

The company also receives a royalty net after taxes of $10 million per year. It is expected that the cash flows equal to depreciation will have to be reinvested to keep the firm operating. Further, capital expenditures equal to 60 percent of the net cash flow will need to be invested to keep the firm growing. Other items on the balance sheet remain unchanged. The CFO believes that it will just forecast for the first three years and then simply assume a 6 percent annual growth rate after the third year.

T-bills yield 8 percent and the market return is 13 percent. The company’s beta using Hamada equation is 1.2. What is the value of the company or what would you pay for the firm if you were interested in it.

45. Your firm buys another firm for vertically integration. The initial FCF’s are 1 million per year starting the year and expected to grow at 3% per year. To your surprise, the actual FCF’s turn out to be 1.2 million per year starting this year with the same growth rate. How much did you underpay from your original analysis assuming the WACC is 9%.

1. 3.6 million
2. 3.4 million
3. 2.8 million
4. 3.3 million

46. Answer the following true/false statements:

a. T/F For question 45, If they used the same amount of debt to buy the firm, the debt to ebitda ratio should decrease when the higher FCF’s were realized

b. T/F As the risk free rate goes up values of stocks and bonds should go down as the required returns will increase (assume dividends and FCF’s and growth remain constant)

c. T/F   If I feel the future cash flows of stock and bonds is more secure. The value of each will decrease

d. T/F Preferred stock gets paid out in a chapter 11 after stocks

Consider what you know about global tax strategies and capital budgeting (NPV) analysis. The current U.S. marginal corporate tax rate is 35%. This has provided an incentive to U.S.-based firms to create profit (therefore jobs) outside the United States (in low tax regimes) and leave it outside the United States.

Many in Congress are currently advocating a one-time, repatriation tax of 5% in order to create jobs. (i.e. any profits held outside the United States may be returned to United States and taxed at only 5%, rather than 35%. This would be a one-time event, the underlying tax law and rates would not be changed). Would the repatriation tax be likely – or unlikely – to have the desired effect of creating jobs in United States. Why or why not?

Which set of Cash Flows is worth more now?

Assume that your grandmother wants to give you generous gift. She wants you to choose which one of the following sets of cash flows you would like to receive:

Option A: Receive a one-time gift of $ 7500 today.

Option B: Receive a $1000 gift each year for the next 10 years. The first $1000 would be received 1 year from today.

Option C: Receive a one-time gift of $15,000 10 years from today.

Compute the Present Value of each of these options if you expect the interest rate to be 3% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $__________ today.

Option B would be worth $__________ today.

Option C would be worth $__________ today.

Financial theory supports choosing Option _______

Compute the Present Value of each of these options if you expect the interest rate to be 7% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $__________ today.

Option B would be worth $__________ today.

Option C would be worth $__________ today.

Financial theory supports choosing Option _______

Compute the Present Value of each of these options if you expect to be able to earn 10% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $__________ today.

Option B would be worth $__________ today.

Option C would be worth $__________ today.

Financial theory supports choosing Option _______

The break-even point tells a company the number of units or the amount of revenue that it must sell or earn in order to pay for all of its costs. At this point, the company has neither profit nor loss.

Companies have two main types of costs: variable costs and fixed costs.

Variable costs are those costs that vary with the number of units produced. Examples of variable costs are direct labor, direct materials and overhead.

Fixed costs are those costs that a company incurs that do not depend on production. For example, most selling, and all administrative costs are fixed. A company must pay these costs even if it does not have any production activity.

The formulas for computing break-even follow:

B/E _{(# units)} = .     Fixed Cost              .

                         Contribution Margin

B/E _(Revenue) = .     Fixed Cost              .

                     Contribution Margin Ratio

If you will notice, both formulas use something called Contribution Margin. Contribution Margin represents the amount of revenue available after all variable costs have been paid for. It represents what is left over to pay for the fixed costs. The Contribution Margin ratio is the percentage Revenue that the Contribution Margin represents. In concept this is similar to Gross Profit.

In Cost Accounting Variable Costs are grouped together, and Fixed Costs are grouped together to create a variation of the traditional Income Statement. This variation is called a Contribution Margin Income Statement.

Read the following ethical dilemma.

Spillproof Company produces molded plastic cup holders for automobiles. Below is a summary of its Contribution Margin Income Statement from last year:

• Revenues: $5,750,000
• Variable costs: $3,850,000
• Fixed costs: $2,000,000
• Net Loss: ($100,000)

Because the company’s CEO is very concerned about the firm’s net losses, she asks the production manager if there are any ways in which they can reduce costs.

A few weeks later, the production manager returns with a proposal to reduce variable costs to 53% of revenues by lowering the cost estimates that the company uses for environmental clean-up costs. Some years the company has to perform waste clean-up and other years it does not. Either way, the company records this estimated cost as part of Variable Cost since it is based on the number of units produced.

The CEO likes the new projected net income and new break-even point, but is concerned that this change in the estimate will misrepresent the potential liability. The manager disagrees. He feels that the company will not be violating any laws by changing their estimate, and that there is only a possibility of environmental costs in the future anyway.

Requirements for your Main thread post:

1. Calculate the CURRENT breakeven revenues using the current Contribution Margin Income Statement information above.  Show us your work!
2. Re-calculate the breakeven revenues if variable costs are 53% of revenues.  Show us your work!
3. Calculate Spillproof’s projected Net Income/Loss.   Show us your work!
4. Discuss the following:

• 1. What are the ethical issues involved in this case? Explain your answer.
  2. Do you feel that the Production Manager is acting improperly or immorally? Why or why not? Please explain your response.
  3. What stakeholders would be affected if the CEO implemented the Production Managers suggestions? Why?
  4. What should the CEO do?

Your firm may purchase certain assets from a struggling competitor. The competitor is asking $50,000,000 for the assets. Last year, the assets produced revenues of $15,000,000. Revenues earned in the next year (i.e., year 1) and in future years are estimated using the information in the table below.

Your staff expects that the following assumptions will hold over the operating period:

• The assets will be viable for another 10 years but will be worthless at the end of the 10 year period
• The assets are qualified by the IRS for depreciation using the straight-line method
• A constant tax rate of 20%

Your staff has also identified three key areas of uncertainty, which include

For this case, address the following goals (each goal should be shown in a separate worksheet in an Excel workbook; provide labels on each worksheet):

Goal 1- Develop the annual pro forma after-tax cash flow statement for each scenario.

Goal 2- Calculate the NPV and IRR for each scenario. Within the Goal 2 worksheet, discuss/interpret the NPV and IRR values that you have calculated in terms of whether the acquisition should be accepted or rejected.

Goal 3- Use the probability distribution given along with your estimates from Goals 1 and 2 to calculate the expected value of the NPV and IRR for acquiring the assets. Interpret the expected values for both capital budgeting measures (compare your estimate of the expected value of the IRR to a benchmark IRR of 14.8%).

Goal 5- Discuss three ways in which your financing modeling assumptions may be incorrect and state the associated impact on the ATCFs, NPV and IRR. Your discussion should be at least 250 words. Proof read before submitting.