Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The assets required for the project were fully depreciated at the time of purchase. The financial staff has collected the following information on the project: Sales revenues $25 million Operating costs 20 million Interest expense 2 million The company has a 25% tax rate, and its WACC is 10%. Write out your answers completely. For example, 13 million should be entered as 13,000,000. What is the project's operating cash flow for the first year (t = 1)? Round your answer to the nearest dollar. $ If this project would cannibalize other projects by $1.5 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar. The firm's OCF would now be $ .

1. Bad Boys, Inc. is evaluating its cost of capital. Under consultation, Bad Boys, Inc. expects to issue new debt at par with a coupon rate of 8% and to issue new preferred stock with a $2.50 per share dividend at $25 a share. The common stock of Bad Boys, Inc. is currently selling for $20.00 a share. Bad Boys, Inc. expects to pay a dividend of $1.50 per share next year. An equity analyst foresees a growth in dividends at a rate of 5% per year. The Bad Boys, Inc. marginal tax rate is 35%. If Bad Boys, Inc. raises capital using 45% debt, 5% preferred stock, and 50% common stock, what is Bad Boys, Inc.’s cost of capital?
   
2. If Bad Boys, Inc. raises capital using 30% debt, 5% preferred stock, and 65% common stock, what is Bad Boys, Inc.’s cost of capital?

New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,160,000, and it would cost another $19,000 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $558,000. The machine would require an increase in net working capital (inventory) of $12,500. The sprayer would not change revenues, but it is expected to save the firm $410,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 35%. What is the Year 0 net cash flow?

What are the net operating cash flows in Years 1, 2, and 3? Do not round intermediate calculations.

Round your answers to the nearest dollar.

Year 1 $ =

Year 2 $ =

Year 3 $=

What is the additional Year 3 cash flow (i.e, the after-tax salvage and the return of working capital)?

Do not round intermediate calculations. Round your answer to the nearest dollar. $ If the project's cost of capital is 11 %, what is the NPV of the project? Do not round intermediate calculations. Round your answer to the nearest dollar. $ Should the machine be purchased?

Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $169,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $104,000, variable costs of $27,600, and fixed costs of $12,200. The project will also require net working capital of $2,800 that will be returned at the end of the project. The company has a tax rate of 34 percent and the project's required return is 9 percent. What is the net present value of this project?

7. Suppose you bought a new home for $240,000 using a 30-year mortgage with monthly payments of $1,516.96. The annual interest rate of the mortgage is 6.5%. After the first 2 years (24 monthly payments), how much money have you paid in interest and how much in principal?

(a) Interest: $36,407.12; Principal: $5,544.74 (b) Interest: $1,516.96; Principal: $234,455.26 (c) Interest: $30,862.38; Principal $1,516.96 (d) Interest: $30,862.38; Principal: $5,544.74

13. A young couple just had their first baby and they wish to insure that enough money will be available to pay for her college education. They decide to make deposits into an educational savings account on each of their daughter’s birthdays, starting with her first birthday in one year (year 1). The educational savings account pays an interest rate of 9.0%. The parents deposit $2,100 on their daughter’s first birthday and plan to increase the size of their deposits by 8.0% each year. Assuming that the parents have already made the deposit for their daughter’s 18th birthday (year 18), then the amount available for college expenses on her 18th birthday is:

(a) $151,431.19 (b) $86,732.81 (c) $32,102.46 (d) $145,990.78

With celebrity​ bonds, celebrities raise money by issuing bonds to investors. The royalties from sales of the music are used to pay interest and principal on the bonds. In April of​ 2009, EMI announced that it intended to securitize its back catalogue with the help of the Bank of Scotland. The bond was issued with a coupon rate of 6.8​% and will mature on this day 34 years from now. The yield on the bond issue is currently 6​%.

At what price should this bond trade​ today, assuming a face value of ​$1,000 and annual​ coupons? The price of the bond today should be

.

F-I is the answers I need

Stock A and Stock B produced the following returns during the past five years (Year -1 is one year ago, Year -2 is two years ago, and so forth):

Year                            Stock A’s Returns,   Stock B’s Returns,

-1                                        –18.00%                                   –14.50%

-2                                          33.00                                         21.80

-3                                          15.00                                         30.50

-4                                          –0.50                                         –7.60

-5                                          27.00                                         26.30

1. Calculate the average rate of return for each stock during the past five years.
2. Assume that someone held a portfolio consisting of 50 percent Stock A and 50 percent Stock B. What would have been the realized rate of return on the portfolio in each year for the past five years? What would have been the average return on the portfolio during this period?
3. Calculate the standard deviation of returns for each stock and for the portfolio.
4. Calculate the coefficient of variation for each stock and for the portfolio. If you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? Why?
5. Assume a third stock, Stock C, is available for inclusion in the portfolio. Stock C produced the following returns during the past five years:

Year                               Stock C’s Return, σ

-1                                            32.00%

-2                                          –11.75

-3                                            10.75

-4                                            32.25

-5                                            –6.75

Input these values and calculate the average return, standard deviation, and coefficient of variation for Stock C.

6. Assume that the portfolio now consists of 33.33 percent Stock A, 33.33 percent Stock B, and 33.34 percent Stock C. How does this composition affect the portfolio return, standard deviation, and coefficient of variation versus when 50 percent was invested in A and in B?
7. Make some other changes in the portfolio, making sure that the percentages sum to 100 percent. For example, enter 25 percent for Stock A, 25 percent for Stock B, and 50 percent for Stock C. Notice that remains constant and that s_p changes. Why do these results occur?
8. In part b, you should see that the standard deviation of the portfolio decreased only slightly because Stocks A and B were highly positively correlated with each other. The addition of Stock C causes the standard deviation of the portfolio to decline dramatically, even though s_C = s_A = s_B. What does this change indicate about the correlation between Stock C and Stocks A and B?
1. Would you prefer to hold a portfolio consisting only of Stocks A and B or a portfolio that also includes Stock C? If others react similarly, how might this fact affect the stocks’ prices and rates of return?

Calculate the value of a stock with the following expectations for dividend payments: $1.75 in Year 1, $2.00 in Year 2, and then annual dividend growth of 1.5% per year indefinitely. Assume a discount rate of 9%. Solve the problem two different ways: first by using the algebraic formula for the Gordon Growth Model combined with PV of uneven dividend payments, then by using Excel to calculate and sum the dividends and their respective present values for the next 150 years