Parker Prints is in negotiation with two of its largest customers to increase the​ firm's sales dramatically. The increase will require that Parker expand its production facilities at a cost of $30 million. Parker expects to pay out $8 million in dividends to its shareholders next year. Parker maintains a 20 percent debt ratio in its capital structure.

a. If Parker earns $12 million next​ year, how much common stock will the firm need to sell in order to maintain its target capital​ structure?

b. If Parker wants to avoid selling any new​ stock, how much can the firm spend on new capital​ expenditures?

You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $5,200,000, and it would be depreciated straight-line to zero over five years. Because of radiation contamination, it actually will be completely valueless in five years. The tax rate is 22 percent and you can borrow at 6 percent before taxes. What would the lease payment have to be for both lessor and lessee to be indifferent about the lease? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Financing Deficit Garlington Technologies Inc.'s 2016 financial statements are shown below: Balance Sheet as of December 31, 2016 Cash $ 180,000 Accounts payable $ 360,000 Receivables 360,000 Notes payable 156,000 Inventories 720,000 Line of credit 0 Total current assets $1,260,000 Accruals 180,000 Fixed assets 1,440,000 Total current liabilities $ 696,000 Common stock 1,800,000 Retained earnings 204,000 Total assets $2,700,000 Total liabilities and equity $2,700,000 Income Statement for December 31, 2016 Sales $3,600,000 Operating costs 3,279,720 EBIT $ 320,280 Interest 18,280 Pre-tax earnings $ 302,000 Taxes (40%) 120,800 Net income 181,200 Dividends $ 108,000 Suppose that in 2017 sales increase by 10% over 2016 sales and that 2017 dividends will increase to $170,000. Forecast the financial statements using the forecasted financial statement method. Assume the firm operated at full capacity in 2016. Use an interest rate of 10%, and assume that any new debt will be added at the end of the year (so forecast the interest expense based on the debt balance at the beginning of the year). Cash does not earn any interest income. Assume that the all new-debt will be in the form of a line of credit. Round your answers to the nearest dollar. Do not round intermediate calculations. Garlington Technologies Inc. Pro Forma Income Statement December 31, 2017 Sales $ Operating costs $ EBIT $ Interest $ Pre-tax earnings $ Taxes (40%) $ Net income $ Dividends: $ Addition to RE: $ Garlington Technologies Inc. Pro Forma Balance Statement December 31, 2017 Cash $ Receivables $ Inventories $ Total current assets $ Fixed assets $ Total assets $ Accounts payable $ Notes payable $ Accruals $ Total current liabilities $ Common stock $ Retained earnings $ Total liabilities and equity $

An electric utility company is considering a new power plant in northern New Mexico. Electricity generated at the plant would be sold in the Albuquerque market where it is badly needed. The firm has the possibility of building a plant that will meet their production needs for the next several years that will cost $300 M. They also have the option of building a larger facility that will have a higher production capacity and will allow them to sell some excess power to another utility company under a long-term contract. The larger facility will cost $600M. The anticipated cash flows for each plant are as follows:

At the end of ten years, both facilities will need significant upgrades and the company plans to conduct further analysis at that time. The risk adjusted cost of capital for this project is 12 percent.

1. Choose a course of action for the company and justify your decision for the managers of the company.

Suppose we are thinking about replacing an old computer with a new one. The old one cost us $1,660,000; the new one will cost, $2,001,000. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about $435,000 after five years.

The old computer is being depreciated at a rate of $352,000 per year. It will be completely written off in three years. If we don’t replace it now, we will have to replace it in two years. We can sell it now for $549,000; in two years, it will probably be worth $159,000. The new machine will save us $373,000 per year in operating costs. The tax rate is 25 percent, and the discount rate is 12 percent.

a-1.  
Calculate the EAC for the the old computer and the new computer. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

a-2.   What is the NPV of the decision to replace the computer now? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

FarmCo, Inc. follows a policy of paying out cash dividends equal to the residual amount that remains after funding 40 percent of its planned capital expenditures. The firm tries to maintain a 40 percent debt and 60 percent equity capital structure and does not plan on issuing more stock in the coming year.​ FarmCo's CFO has estimated that the firm will earn $12 million in the current year.

a. If the firm maintains its target financing mix and does not issue any equity next​ year, what is the most it could spend on capital expenditures next year given its earnings​ estimate?

b. If​ FarmCo's capital budget for next year is $10 million, how much will the firm pay in dividends and what is the resulting dividend payout​ percentage?

Solve with financial calculator, not exel. Please include steps

1. Emerald Isle is an on-line retailer in California that is considering a new six-year expansion project that would greatly increase its capacity to import and distribute high quality hand-made items from Ireland. The project will require an initial fixed asset investment of $1.6 million. The fixed asset will be depreciated straight–line to zero over its six-year tax life. The fixed asset will have a market value of $250,000 at the end of the project. The project will also require an initial investment in net working capital of $200,000 that will be returned at the end of the project. The project is estimated to generate $1,450,000 in annual sales with costs of $950,000. The tax rate for the firm is 30%. The required return for firm investments is 15%. What is the NPV of this project? What is the IRR?

EXCESS CAPACITY

Williamson Industries has $5 billion in sales and $1.6 billion in fixed assets. Currently, the company's fixed assets are operating at 90% of capacity.

1. What level of sales could Williamson Industries have obtained if it had been operating at full capacity? Write out your answer completely. For example, 25 billion should be entered as 25,000,000,000. Round your answer to the nearest cent.
   $ (the answer is NOT 5,555,555,556)
2. 
   
3. What is Williamson's target fixed assets/sales ratio? Round your answer to two decimal places.
   28.8 %
4. 
   
5. If Williamson's sales increase 15%, how large of an increase in fixed assets will the company need to meet its target fixed assets/sales ratio? Write out your answer completely. For example, 25 billion should be entered as 25,000,000,000. Round your answer to the nearest cent. Negative amount should be indicated by a minus sign. Do not round intermediate calculations.
   $

What is the coefficient of variation

You hold $10 million in stock with a portfolio beta of 1.15. You write three APR 750 OEX puts

at a $25.00 premium and write three APR 700 OEX calls at a $25.00 premium. Estimate the total

portfolio gain if, at option expiration, the S&P 100 index is 775.00 and the current level of the

index is 725.00?

The variance of the daily cash flows for the Pele Bicycle Shop is $890,000. The opportunity cost to the firm of holding cash is 4.1 percent per year. What should the target cash level and the upper limit be if the tolerable lower limit has been established as $160,000? The fixed cost of buying and selling securities is $300 per transaction.

A. C*=$172,106.86; H*=$196,520.59

B. C*=$172,206.86; H*=$196,620.59

C. C*=$173,206.86; H*=$197,620.59

D. C*=$175,206.86; H*=$199,620.59

Stocks have averaged 17.4% per year, with a standard deviation of 32.7%. When would returns be between 50.1% and -15.3%?

One of Modular Products (MP) customers would like to obtain a 6-month option to purchase 500,000 tables for $119 each. These tables currently sell for $110 each. Assume u equals 1.0994 and d equals .9096. What price should MP charge for this option if the annual risk-free rate is 3.2 percent? Round your answer to the nearest $100.

Group of answer choices

a. $338,400

b. $421,900

c. $598,100

d. $479,900

e. $533,600

On July 1, 2017, Jones Limited had the following share structure:

Required:
Complete the following table based on three independent cases involving share transactions: (Round your par value answers to 2 decimal places.)