Assume that an average user of an iPhone application buys a plan that is worth $80. They tend to repeat this purchase two more times. And our profit margin is 25%.

Develop a calculation to calculate the life time value of a user?

please show detailed steps of your calculations

F. Pierce Products Inc. is considering changing its capital structure. F. Pierce currently has no debt and no preferred stock, but it would like to add some debt to take advantage of low interest rates and the tax shield. Its investment banker has indicated that the pre-tax cost of debt under various possible capital structures would be as follows:

F. Pierce uses the CAPM to estimate its cost of common equity, r_s and at the time of the analaysis the risk-free rate is 5%, the market risk premium is 8%, and the company's tax rate is 40%. F. Pierce estimates that its beta now (which is "unlevered" because it currently has no debt) is 1.15. Based on this information, what is the firm's optimal capital structure, and what would be the weighted average cost of capital at the optimal capital structure? Do not round intermediate calculations. Round your answers to two decimal places.

Selling price per unit $20.00

Variable costs per unit:

Direct materials $4.00

Direct manufacturing labor $1.60

Manufacturing overhead $0.40

Selling costs $2.00

Fixed costs $96,000

A. Calculate the number of units the company must sell to break even.

B. Calculate net profit/net lose if the company sold 9,500 units.

C. Calculate the number of units the company must sell to make a net profit of $144,000.

a certain hospital is considering setting up a new facility. Management estimates that it will cost $1.5 million to purchase the necessary equipment and renovate the building to support its long term care services. The projected net cash flows generated by the new facility over the next five years are given below:

Year 1 -0

Year 2 $380,000

Year 3 $400,000

Year 4 $420,000

Year 5 $440,000

Assuming a five year life and 8% cost of capital, compute the net present value of this proposal. On the merits of your net present value computation, should this hospital invest in this project?

Sigma Pty. Ltd. is evaluating whether to buy pieces of medical equipment each of which requires an up-front expenditure of $1.5 million. The projects are expected to produce the following net cash inflows:

Year Equipment A Equipment B

1 $500,000 $2,000,000

2 $1,000,000 $1,000,000

3   $2,000,000 $600,000

a. What is the internal rate of return for each piece of equipment?

b. What is the payback period for each machine?

c. What is the net present value of each machine if the cost of capital is 10 per cent? 5 per cent? 15 per cent?

d. Should Better Health buy both machines, only one, or none? Explain your answer

Please show working and explanation for me.

You are valuing an investment that will pay you $17,000 per year for the first ten years, $35,000 per year for the next ten years, and $48,000 per year the following ten years (all payments are at the end of each year). If the appropriate annual discount rate is 9.00%, what is the value of the investment to you today (in whole number)?

Project Q                      Project R

Investment                    100,000                        500,000

IRR                              15.5%                           12.3%

NPV                             $5500.00                      $6750.00

Profitability Index         1.055                            1.014

If the projects are mutually exclusive, which one should be selected? Why?

A company must develop the relevant cash flows for a replacement capital investment proposal. The proposed asset costs $50,000 and has installation costs of $3,000. The asset will be depreciated using a five-year recovery schedule. The existing equipment, which originally cost $25,000 and will be sold for $10,000, has been depreciated using an MACRS five-year recovery schedule and three years of depreciation has already been taken. The new equipment is expected to result in incremental before-tax net profits of $15,000 per year. The firm has a 40 percent tax rate. Note: Assume that both the old and the new equipment will have terminal values of $0 at the end of year 5. The WACC for the company is 10%.

1- determine the NPV

2- determine the IRR

3- should it reject or accept the replacement and explain why

PLEASE SHOW ALL WORK THROUGH EXCEL!!!!!!!!!

Wizard Corporation has analyzed their customer and order handling data for the past year and has determined the following costs:

Order processing cost per order $7

Additional costs if order must be expedited (rushed) $8.00

Customer technical support calls (per call) $12

Relationship management costs (per customer per year) $1200

In addition to these costs, product costs amount to 75% of Sales.

In the prior year, Wizard had the following experience with one of its customers, Chester Company:

Sales $15,500

Number of orders 160

Percent of orders marked rush 70%

Calls to technical support 80

Required: Calculate the profitability of the Chester Company account.

Explain important factors that cause differences in cash flow between subsidiaries versus parent companies

Discuss the benefits of Foreign Direct Investment. Find and discuss real world examples of FDI.

PowerDrive, Inc. produces a hard disk drive that sells for $175 per unit. The cost of producing 25,000 drives in the prior year was:

Direct material $625,000

Direct labor 375,000

Variable overhead 125,000

Fixed overhead 1,500,000

Total cost $2,625,000

At the start of the current year, the company received an order for 3,800 drives from a computer company in China. Management of PowerDrive has mixed feelings about the order. On the one hand they welcome the order because they currently have excess capacity. Also, this is the company’s first international order. On the other hand, the company in China is willing to pay only $135 per unit.

What will be the effect on profit of accepting the order?

Discuss the exchange rate risk exposures including transactions, economic and translation exposure for the proposed business. Business being clothing in Italy.

What does the efficient frontier represent?

Exactly two years ago an investor purchased a Portuguese government bond with a face value of EUR 10,000, an annually paid coupon of 5%, a remaining maturity of 10 years, and a YTM of 12%. Today, i.e., two years later, the bond has a YTM of 4%. What is the capital gain in EUR for this investor who bought the bond two years ago and sold it today (rounded to the nearest EUR)?