(Related to Checkpoint 13.2 and Checkpoint​ 13.3) ​ (Comprehensive risk​ analysis) Blinkeria is considering introducing a new line of hand scanners that can be used to copy material and then download it into a personal computer. These scanners are expected to sell for an average price of ​$95 ​each, and the company analysts performing the analysis expect that the firm can sell 105,000 units per year at this price for a period of five​ years, after which time they expect demand for the product to end as a result of new technology. In​ addition, variable costs are expected to be ​$18 per unit and fixed​ costs, not including​ depreciation, are forecast to be ​$1,100,000 per year. To manufacture this​ product, Blinkeria will need to buy a computerized production machine for $9.1 million that has no residual or salvage​ value, and will have an expected life of five years. In​ addition, the firm expects it will have to invest an additional ​$304,000 in working capital to support the new business. Other pertinent information concerning the business venture is provided​ here: 

Initial cost of the machine    $9,100,000
Expected life    5 years
Salvage value of the machine    $0
Working capital requirement    $304,000
Depreciation method    straight line
Depreciation expense    $1,820,000 per year
Cash fixed costs—excluding depreciation    $1,100,000 per year
Variable costs per unit   $18
Required rate of return or cost of capital    9.1%
Tax rate    34%

a.  Calculate the​ project's NPV.

b.  Determine the sensitivity of the​ project's NPV to​ a(n) 8 percent decrease in the number of units sold.

c.  Determine the sensitivity of the​ project's NPV to​ a(n) 8 percent decrease in the price per unit.

d.  Determine the sensitivity of the​ project's NPV to​ a(n) 8 percent increase in the variable cost per unit.

e.  Determine the sensitivity of the​ project's NPV to​ a(n) 8 percent increase in the annual fixed operating costs.

f.  Use scenario analysis to evaluate the​ project's NPV under​ worst- and​ best-case scenarios for the​ project's value drivers. The values for the expected or​ base-case along with the​ worst- and​ best-case scenarios are listed​ here:

   Expected or Base Case   Worst Case   Best Case
Unit sales    105,000   72,450   137,550
Price per unit    $95   $83.60   $112.10
Variable cost per unit    $(18)   $(19.80)   $(16.56)
Cash fixed costs per year    $(1,100,000)   $(1,298,000)   $(1,001,000)
Depreciation expense    $(1,820,000)   $(1,820,000)   $(1,820,000)

Forecasted Statements and Ratios

Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Upton's balance sheet as of December 31, 2016, is shown here (millions of dollars):

Sales for 2016 were $225 million and net income for the year was $6.75 million, so the firm's profit margin was 3.0%. Upton paid dividends of $2.7 million to common stockholders, so its payout ratio was 40%. Its tax rate was 40%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2017. Do not round intermediate calculations.

1. If sales are projected to increase by $70 million, or 31.11%, during 2017, use the AFN equation to determine Upton's projected external capital requirements. Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Round your answer to two decimal places.
   $ million
   
2. Using the AFN equation, determine Upton's self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? Round your answer to two decimal places.
   %
   
3. Use the forecasted financial statement method to forecast Upton's balance sheet for December 31, 2017. Assume that all additional external capital is raised as a line of credit at the end of the year and is reflected (because the debt is added at the end of the year, there will be no additional interest expense due to the new debt).
   Assume Upton's profit margin and dividend payout ratio will be the same in 2017 as they were in 2016. What is the amount of the line of credit reported on the 2017 forecasted balance sheets? (Hint: You don't need to forecast the income statements because the line of credit is taken out on last day of the year and you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2017 addition to retained earnings for the balance sheet without actually constructing a full income statement.) Round your answers to the nearest cent.

   Upton Computers Pro Forma Balance Sheet December 31, 2017 (Millions of Dollars)
   Cash	$
   Receivables	$
   Inventories	$
   Total current assets	$
   Net fixed assets	$
   Total assets	$
   Accounts payable	$
   Notes payable	$
   Line of credit	$
   Accruals	$
   Total current liabilities	$
   Mortgage loan	$
   Common stock	$
   Retained earnings	$
   Total liabilities and equity	$

A stock is currently priced at $49.00. The risk free rate is 5.9% per annum with continuous compounding. In 8 months, its price will be $57.33 with probability 0.46 or $42.63 with probability 0.54.

Using the binomial tree model, compute the present value of your expected profit if you buy a 8 month European call with strike price $53.00. Recall that profit can be negative.

How are financial institutions profitable from risk management ?

A. What is the value today of a money machine that will pay $1,385.00 per year for 13.00 years? Assume the first payment is made 5.00 years from today and the interest rate is 6.00%.

B. What is the value today of a money machine that will pay $3,787.00 every six months for 29.00 years? Assume the first payment is made 4.00 years from today and the interest rate is 12.00%.

Financial information for Powell Panther Corporation is shown below:

Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)

Write out your answers completely. For example, 25 million should be entered as 25,000,000. Round your answers to the nearest dollar, if necessary. Negative values, if any, should be indicated by a minus sign.

1. What was net operating working capital for 2018 and 2019? Assume the firm has no excess cash.

   2018:  $   

   2019:  $   

2. What was the 2019 free cash flow?

   $   

3. How would you explain the large increase in 2019 dividends?

   1. The large increase in net income from 2018 to 2019 explains the large increase in 2019 dividends.
   2. The large increase in EBIT from 2018 to 2019 explains the large increase in 2019 dividends.
   3. The large increase in sales from 2018 to 2019 explains the large increase in 2019 dividends.
   4. The large increase in retained earnings from 2018 to 2019 explains the large increase in 2019 dividends.
   5. The large increase in free cash flow from 2018 to 2019 explains the large increase in 2019 dividends.

   -Select-IIIIIIIVVItem 4

question 7 chapter 3

Describe the purposes of the antitrust laws. What are the major anti-trust statutes / Acts and their stated objectives. What penalties, if any, are available to address violations of the major antitrust laws. Explain fully.

Pizza di Joey operates several food trucks that provide hot food and beverages in the Washington DC area. The company has annual sales of $625,400. Cost of goods sold average 32 percent of sales and the profit margin is 4.5 percent. The average accounts receivable balance is $34,700. Assume 365 days per year. [Please show your work on an Excel sheet]

a. On average, how long does it take the company to collect payment for its services?

b. What is the change in the Payables deferral period if the payables turnover has gone from an average of 10.50 times to 11.45 times per year?

c. What is the length of the company's cash conversion cycle after the change in the Payables deferral period if the inventory turnover is 22.20 times?

Edmonds Industries is forecasting the following income statement:

The CEO would like to see higher sales and a forecasted net income of $1,970,000. Assume that operating costs (excluding depreciation and amortization) are 55% of sales and that depreciation and amortization and interest expenses will increase by 10%. The tax rate, which is 25%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) What level of sales would generate $1,970,000 in net income? Round your answer to the nearest dollar, if necessary.

$ _____

chapter 3 question 9

A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following cash flows:

1. What is each project's NPV? Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent.

   Project A: $ ?

   Project B: $ ?

2. What is each project's IRR? Do not round intermediate calculations. Round your answers to two decimal places.

   Project A: ? %

   Project B: ? %

3. What is each project's MIRR? (Hint: Consider Period 7 as the end of Project B's life.) Do not round intermediate calculations. Round your answers to two decimal places.

   Project A: ? %

   Project B: ? %

4. Construct NPV profiles for Projects A and B. If an amount is zero, enter 0. Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent.

5. Discount Rate	NPV Project A	NPV Project B
   0%	$ ?	$ ?
   5	?	?
   10	?	?
   12	?	?
   15	?	?
   18.1	?	?
   24.18	?	?

6. Calculate the crossover rate where the two projects' NPVs are equal. Do not round intermediate calculations. Round your answer to two decimal places.

   ? %

7. What is each project's MIRR at a WACC of 18%? Do not round intermediate calculations. Round your answers to two decimal places.

   Project A: ? %

   Project B: ? %

Holmes Manufacturing is considering a new machine that costs $275,000 and would reduce pretax manufacturing costs by $90,000 annually. The new machine will be fully depreciated at the time of purchase. Management thinks the machine would have a value of $23,000 at the end of its 5-year operating life. Net operating working capital would increase by $25,000 initially, but it would be recovered at the end of the project's 5-year life. Holmes's marginal tax rate is 25%, and an 11% WACC is appropriate for the project.

1. Calculate the project's NPV. Negative value, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to the nearest cent.
   $   
   
   Calculate the project's IRR. Do not round intermediate calculations. Round your answer to two decimal places.
     %
   
   Calculate the project's MIRR. Do not round intermediate calculations. Round your answer to two decimal places.
     %
   
   Calculate the project's payback. Do not round intermediate calculations. Round your answer to two decimal places.
     years
2. 
   
3. Assume management is unsure about the $90,000 cost savings-this figure could deviate by as much as plus or minus 20%. What would the NPV be under each of these situations? Negative values, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest cent.
   20% savings increase: $   
   20% savings decrease: $   

Glitter Inc. uses one-quarter common stock and three-quarters debt to finance their operations. The after-tax cost of debt is 7 percent and the cost of equity is 13 percent.
The management of Glitter Inc. is considering an expansion project that costs $1.2 million. The project will produce a cash inflow of $45,000 in the first year and 150,000 in each of the following 10 years (i.e., $150,000 in years 2 through 11.. What is the WACC and should Glitter Inc. invest in this project?

a. 10 percent, no because the NPV is negative

b. 10 percent, yes because the NPV is positive

c. 8.5 percent, no because the NPV is negative

d. 8.5 percent, yes because the NPV is positive

HOW CAN I SOLVE IT BY HAND STEP BY STEP PLEASE

DO NOT USE EXCEL