Caffieneland is a small country in Central America. The main product of the country is coffee, which is currently priced at $1.20 per cup. Inflation is expected to be 3% per year, and the nominal interest rate is 10% per year.

a. Calculate the real interest rate.

b. Suppose you wanted to borrow 1000 cups of coffee now, and pay back the loan next year. How many cups of coffee would you owe? What is the interest rate for this coffee loan? Hint: Borrow money now and use it to buy coffee at the current price. Then calculate how much you owe in dollars next year. Use next year’s coffee price to determine how much you owed in terms of “cups of coffee.”

c. Juan Valdez, a brilliant local scientist, has invented a coffee replicator. The replicator works as follows: At time 0, you insert 1,000 cups of coffee. These cups are consumed by the machine, that is you have to ‘invest 1,000 cups now to make the replicator operate. Then, for each of the next five years, the replicator produces 300 cups of coffee. You get 300 cups at time 1, another 300 cups at time 2, and so on. After five years the replicator is used up. Calculate the PV of the replicator in terms of dollars.

d. Now calculate the PV of the replicator in terms of coffee. Hint: Use cups of coffee as your currency. Make a Coffee-Flow diagram and then calculate the PV. Be sure to use the coffee interest rate in your PV calculations. e. Convert the PV in terms of coffee from part d into dollars. Multiply the answer from d by the current price of coffee.

show work please!

3-1 Looking back on 4 March 2008 when the interest rate was set at 7.25% by RBA (Reserve Bank Australia), however since then RBA gradually reduced the interest rate to its lowest 1% on 3 July 2019. Present an overview on the expectations or motivations behind such interest rate cut by RBA? (summary)

[Note: In the early 1990s the interest rate was 17.5%, you don’t need to go back such distant past, your analysis should focus between 2008 to 2019]

3-2 Identify the possible impact of interest rate cut on investments in the capital market in Australia.

[Note: Here you can investigate the differences in impact between debt instruments and equity instruments in the capital market, you can use table, chart, graph wherever you would find it appropriate]

3-3 Identify the possible impact of interest rate cut on the Real Estate market in Australia.

[Note: You can analyse the differences in impact between foreign sourced investment and local sourced investment in the Real Estate Market, you can use table, chart, graph wherever you would find it appropriate]

3-4 There are four countries (Japan, Sweden, Denmark and Switzerland) have negative interest rates. What could be the expectations/ motivations to drop interest rate below zero?

Could you please give me a quick summary of the solution to each question so that I may expand on this. It is for my current job.

Medical Research Corporation (Comprehensive time value of money) Dr. Harold Wolf of Medical Research Corporation (MRC) was thrilled with the response he had received from drug companies for his latest discovery, a unique electronic stimulator that reduces the pain from arthritis. The process had yet to pass rigorous Federal Drug Administration (FDA) testing and was still in the early stages of development, but the interest was intense. He received the three offers described following this paragraph. (A 10 percent interest rate should be used throughout this analysis unless otherwise specified.)

Offer I - $1,000,000 now plus $200,000 from year 6 through 15. Also, if the product did over $100 million in cumulative sales by the end of year 15, he would receive an additional $3,000,000. Dr. Wolf thought there was a 70 percent probability this would happen.

Offer II - Thirty percent of the buyer’s gross profit on the product for the next four years. The buyer in this case was Zbay Pharmaceutical. Zbay’s gross profit margin was 60 percent. Sales in year one were projected to be $2 million and then expected to grow by 40 percent per year.

Offer III - A trust fund would be set up for the next eight years. At the end of that period, Dr. Wolf would receive the proceeds (and discount them back to the present at 10 percent). The trust fund called for semiannual payments for the next eight years of $200,000 (a total of $400,000 per year).

The payments would start immediately. Since the payments are coming at the beginning of each period instead of the end, this is an annuity due. To look up the future value of an annuity due in the tables, add 1 to n (16 + 1) and subtract 1 from the value in the table. Assume the annual interest rate on this annuity is 10 percent annually (5 percent semiannually). Determine the present value of the trust fund’s final value.

Required: Find the present value of each of the three offers and indicate which one has the highest present value.

Consider John Smith, a new freshman who has just received a study loan and started college. He plans to obtain the maximum loan at the beginning of each year. Although John Smith does not have to make any payments while he is still in school, the 6.5 percent interest per year compounded monthly owed accrued and is added to the balance of the loan.

After graduation, John Smith gets a six-month grace period. This means that monthly payments are still not required, but interest is still accruing. After the grace period, the standard repayment plan is to amortize the debt using monthly payments for 10 years.

Required:

Using the standard repayment plan and a 6.8 percent APR interest rate, compute the monthly payments John Smith owes after the grace period.

Describe the role of finance in the healthcare field?

Suppose that an investor opens an account by investing $1,000. At the beginning of each of the next four years, he deposits an additional $1,000 each year, and he then liquidates the account at the end of the total five-year period. Suppose that the yearly returns in this account, beginning in year 1, are as follows: −9 percent, 17 percent, 9 percent, 14 percent, and −4 percent.

a. Calculate the arithmetic and geometric average returns for this investment. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Arithmetic Return _______%

Geometric Return_______%

b. Determine what the investor’s actual dollar-weighted average return was for this five-year period. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Dollar-weighted average return

Holt Enterprises recently paid a dividend, D₀, of $1.00. It expects to have nonconstant growth of 13% for 2 years followed by a constant rate of 4% thereafter. The firm's required return is 8%.

1. How far away is the horizon date?
   1. The terminal, or horizon, date is Year 0 since the value of a common stock is the present value of all future expected dividends at time zero.
   2. The terminal, or horizon, date is the date when the growth rate becomes nonconstant. This occurs at time zero.
   3. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the beginning of Year 2.
   4. The terminal, or horizon, date is the date when the growth rate becomes constant. This occurs at the end of Year 2.
   5. The terminal, or horizon, date is infinity since common stocks do not have a maturity date.
   
   -Select-
   
2. What is the firm's horizon, or continuing, value? Round your answer to two decimal places. Do not round your intermediate calculations.
   
   $
   
3. What is the firm's intrinsic value today, P̂₀? Round your answer to two decimal places. Do not round your intermediate calculations.
   
   $

The director of capital budgeting for Giant Inc. has identified two mutually exclusive projects, L and S, with the following expected net cash flows: Expected Net Cash Flows Year Project L Project S 0 ($100) ($100) 1 10 70 2 60 50 3 80 20 Both projects have a cost of capital of 12 percent. What is Project S's MIRR? What is Project L's MIRR?

Zane Corporation has an inventory conversion period of 63 days, an average collection period of 33 days, and a payables deferral period of 37 days. Assume 365 days in year for your calculations.

What is the length of the cash conversion cycle? Round your answer to two decimal places.

__days

If Zane's annual sales are $2,679,070 and all sales are on credit, what is the investment in accounts receivable? Round your answer to the nearest cent. Do not round intermediate calculations. $

How many times per year does Zane turn over its inventory? Assume that the cost of goods sold is 75% of sales. Use sales in the numerator to calculate the turnover ratio. Round your answer to two decimal places. Do not round intermediate calculations.

In the following ordinary annuity, the interest is compounded with each payment, and the payment is made at the end of the compounding period. Find the required payment for the sinking fund. (Round your answer to the nearest cent.)

Yearly deposits earning 12.9% to accumulate $2500 after 12 years. The Oseola McCarty Scholarship Fund at the University of Southern Mississippi was established by a $150,000 gift from an 87-year-old woman who had dropped out of sixth grade and worked for most of her life as a washerwoman. How much would she have had to save each week in a bank account earning 3.9% compounded weekly to have $150,000 after 75 years? (Round your answer to the nearest cent.)

Imagine that there are only two countries in the world: America and China. Each country produces and consumes two goods – a tradable good (T) and a non-tradable good (NT). The production of these goods involves the use of labour, but no other resources are used in the production process. This is of course a ridiculous assumption, but it is one we will make for the purposes of this assignment. There are perfectly competitive markets for the non-tradable good (NT) in each country, but no trade in this good between the countries. There is a perfectly competitive global market in the traded good (T). Labour is homogeneous within America. An hour of labour produces 10 units of the traded good (T) or 5 units of the non-traded good (NT) in America. Labour costs are 10 dollars (USD) an hour in America. Labour is also homogenous within China. An hour of labour produces 5 units of the traded good (T) or 5 units of the non-traded good (NT) in China. Labour costs are 10 yuan (CNY) an hour in China.

Suppose that over time the productivity per hour of labour in China in the tradable good industry increases to 10 units of T, while the other three productivity figures do not change. What will happen to the real exchange rate? (1 mark)

Nonconstant Growth Stock Valuation

Assume that the average firm in your company's industry is expected to grow at a constant rate of 4% and that its dividend yield is 7%. Your company is about as risky as the average firm in the industry and just paid a dividend (D₀) of $2.25. You expect that the growth rate of dividends will be 50% during the first year (g_0,1 = 50%) and 20% during the second year (g_1,2 = 20%). After Year 2, dividend growth will be constant at 4%. What is the estimated value per share of your firm’s stock? Do not round intermediate calculations. Round your answer to the nearest cent.

$

Amy is going to need R145 000 in three years’ time, to pay for a holiday overseas. She immediately starts
to make monthly deposits into an account earning 11,05% interest per year, compounded monthly. Amy’s
monthly deposit is
[1] R3 384,18.
[2] R3 415,34.
[3] R4 027,78.
[4] R4 707,20.
[5] R4 750,55.

Can I get whole answeres for this case?

The case and questions in your side but I can see only five questions' answers but I need to see all solutions.

The Sunrise Bakery Corporation was originally founded.......

6. What is the after-tax net income in each of the six years? 7. Calculate the change in working capital each year from the projected financial statements. 8. What is the terminal value of the project at the end of year 6? 9. Compute the free cash flows for each year. 10. What is the IRR? 11. Calculate the NPV. 12. Using Payback Analysis, how many years until the project pays off the investment? 13. What is the return on invested capital? 14. Should Sunrise Bakery purchase the new oven?

Capstone Case: Sunrise Bakery Expansion The Sunrise Bakery Corporation was originally founded in Houston, TX in 1991 by Griffin Harris, who currently serves as the company's Chief Executive Officer. About four years ago, Griffin's daughter, Erica, moved into the company to serve as Chief Financial Officer. Erica had graduated from college a few years ago and had worked for a few years in retail. However, for the past two years, she had been working quite successfully on an online accounting degree, but she still felt a little uncomfortable in her new role as CFO of the family business. Sunrise produces and markets a variety of bakery products throughout southeast Texas and Louisiana. They operate mostly through warehouse delivery and produce fresh breads, buns, rolls, and snack cakes under a few of their own regional brands but also including some licensed "big name" national brands. In total, they operate five bakeries with one very large facility and four smaller production sites. For the past three years, sales have averaged about $15 Million, generating about $650 Thousand in Net Income per year. However, sales have been roughly flat for the past six years as growth has slowed and production capacity has reached nearly 100%. In order to grow sales, Sunrise Bakery needs to invest in further production capacity. Griffin Harris has been looking to purchase more space, build additional bakeries, or even perhaps acquire one of their smaller competitors, but nothing specific has worked out yet. Erica has an alternative short-term plan to modernize the production process at their main plant. Her idea involves the purchase of a new, significantly faster, integrated commercial oven that she recently saw displayed at a trade show. Few other bakeries in the region have invested in this modern equipment, and she expects it may cut costs and improve output efficiency. Her sales representative suggests the new oven could raise incremental sales at their large bakery by 15%. Installation of the oven could be mostly executed over the upcoming Labor-day long weekend and shouldn't disrupt sales or production too much. However, the new oven requires an expenditure of $350,000, which would be a large capital expenditure for Sunrise. To reflect the wear and tear on the oven, tax law allows for a 10% annual reduction in the value of the oven as a depreciation expense. That is, Erica’s financial forecast includes a non-cash expense of $35,000 for each of the next six years. After six years, Erica’s sales representative expects the oven to be worth about $140,000, which is just equal to the accounting book value of the oven after six years of accumulated depreciation ($140,000 = $350,000 – 6 * 10%*$350,000). Operation of the oven also requires a small initial investment in an inventory of spare parts of $15,000. The inventory should be fully recoverable for $15,000 if the machine is sold. The investment in inventory represents an increase in other current assets (inventory) that should be included as a change in working capital requirements for Sunrise Bakery. Sunrise estimates receivables at 1.5% of revenues and payables at 2% of revenues each year. At the end of the project, Erica expects to recover all of the working capital invested in the project. In other words, she expects a cash flow equal to the amount of Non-Cash Current Assets less Current Liabilities in the last year of the project. Erica’s financial forecast for the new oven does not require any significant change in financing. Sunrise started with one small bakery entirely paid for with cash from Griffin Harris and a mortgage on the bakery property. Currently, Sunrise maintains a rough capital structure of about 25% debt and 75% equity. In Erica's forecast, she expects to purchase the new oven with available cash and retained earnings (Sunrise's own money) and without any additional drawdown on their bank line of credit (no new debt). Sunrise currently pays about 4.5% on their debt, and that rate is not expected to change with the additional purchase of the oven. No additional external financing should be needed, and after discussions with her loan office, Erica expects the bank will approve the purchase of the oven without any effect on their line of credit. Overall, the cash purchase of the oven is not expected to change the capital structure of the Sunrise Corporation. However, since the oven will become part of the assets of Sunrise, the bank could seize the oven should Sunrise fail to make payments on their current debt. Erica remembered from her online classes that she needs to assess the risk of her business when making important financial decisions. In researching similar large public bakery and other food manufacturers, she found that firms in her industry with about the same level of risk mostly had stock market betas around 0.80 on average. She also noted that many analysts used a ballpark equity risk premium of 5.5% and a current yield on U.S. treasury bonds (risk-free rate) of about 3%. Sunrise has a corporate tax rate of 30%. To help understand the costs and benefits of the decision, Erica worked closely with her director of operations, plant manager, marketing team, and her father to produce some realistic sales, costs, and financial forecasts. Her team felt uncomfortable forecasting more than 5 or 6 years into the future. Her focus was on how the new oven might improve incremental revenue generation at their large plant. The case exhibits below contain Erica's financial projections for the project. In discussing her plan to purchase the new oven, Erica's father seems more than a little worried that the new machinery is not worth the cost and that Erica's motivations may not be based on sound financial decision making. As Erica looked over the financial forecasts, market data, line of credit agreement, and the intimidating $350,000 invoice that would soon follow, she wondered how she could convince her father, and herself, that purchasing the new oven would be a sound financial decision. Sunrise Bakery Capstone Case questions In this case analysis, our objective is to will bring together all the tools we picked up throughout the four modules incorporating discounted cash flows, estimating free cash flow forecasts, analyzing the cost of capital and computing various capital budgeting tools. The open-ended platform of a case study is to put the tools and concepts we have developed into a more real-world and practical setting. Using this information given in the case, your job is to figure out whether or not to make the investment by computing all of the capital budgeting tools that we covered in week 2. This involves calculation of the free cash flows following the process we outlined in week 3 and computing the discount rate we covered in week 4. Exhibit 2 below provides a worksheet for calculating the free cash flows using the financial statement forecast given in Exhibit 1. In addition to the worksheet provided in Exhibit 2, a spreadsheet template has also been uploaded. Please feel free to use this template to complete the case using the spreadsheet tools we covered in weeks one and two.

Bright Lighting Ltd is considering a new range of product based on a specific type of intelligent stage lighting after extensive market research costing $60,000, which was paid yesterday. Bright expects that this range will increase the firm’s revenues by $1,565,000 in the first year of operations. Thereafter, revenues will only increase by 15% p.a. The additional material will cost $850,000 p.a., additional labour cost is expected to be $350,000 p.a. and other miscellaneous costs are estimated to be $52,000 p.a. After the first year, Bright expect these costs will increase by 2.5% p.a. each year. [Assume that all revenues are received and that all costs are paid at the end of each year.] The initial outlay of $2,125,000 will be depreciated on a straight-line basis to zero salvage value over the 8-year productive life of the project. It is estimated the various components of equipment can be sold for $100,000 at the completion of the project. The firm requires a 12.5% p.a. required rate of return and the tax rate is 30%. Tax is paid in the year in which net earnings are received. Calculate the incremental cash flows for each year (Y0 to Y8 inclusive). PLZ consider Y0. Calculate the net present value, that is, the net benefit or net loss in present value terms of the project.