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.)

What is the after-tax cost of debt for a firm with 4% bonds priced at 93% of par with 23 years to maturity and semi-annual coupons?

- Alpha Company is looking at two different capital structures, one an all-equity firm and the other a leveraged firm with $2 million of debt financing at 8% interest. The all-equity firm will have a value of $4 million with 400,000 shares outstanding. The leveraged firm will have 200,000 shares outstanding. Assume there are no taxes. a. What is the EPS for the unlevered and levered capital structures assuming operating income is $240,000? b. What is the EPS for the unlevered and levered capital structures assuming operating income is $400,000? c. At what operating income would Alpha Company be indifferent between the two capital structures? d. Create a graph with operating income on the horizontal axis and EPS on the vertical axis. Show on the graph how EPS varies with operating income for the two capital structures.

2. List and define the five categories of ratios generally used in financial statement analysis.

1. Explain the key items of interest to the following groups of people when completing a financial statement analysis:

-investors,

-creditors

-and management.

1. A company is considering an investment in a new project which would require $39,000 worth of capital expenditures and an increase of $45,000 in net working capital that will be recovered at the end of the project. Each year, starting at the end of the first year, the operating cash flows of the project will be $32,000 for 3 years. The project is so risky and so crazy its WACC is 16%. What is the net present value of the project?

   		($14.42)
   		$10.99
   		$12.97
   		$153.36
   		None of these