Use the Black-Scholes formula for the following stock:

Recalculate the value of the call with the following changes:

Calculate each scenario independently. (Round your answers to 2 decimal places.)

Broussard Skateboard's sales are expected to increase by 25% from $8.8 million in 2016 to $11.00 million in 2017. Its assets totaled $4 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 3%, and the forecasted payout ratio is 70%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Round your answer to the nearest dollar. Do not round intermediate calculations.

of the financial ratios we have covered which do you feel is the most important in assessing the financial health of a company? Why? I offer 2 suggestions: 1) be specific and 2) be sure you understand exactly what financial information a particular ratio conveys (and include that in your answer).

New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $1,070,000, and it would cost another $16,500 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 $595,000. The machine would require an increase in net working capital (inventory) of $20,000. The sprayer would not change revenues, but it is expected to save the firm $376,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 30%. What is the Year 0 net cash flow? $ -1,106,500 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 15 %, what is the NPV of the project? Do not round intermediate calculations. Round your answer to the nearest dollar

0. After a detailed analysis on the risks and returns of the stock market and Stock XYZ (current price=€50), you conclude that the price of XYZ is unlikely to change a lot during the course of the next 3 months. You decide to bet on this analysis and establish a short straddle position, by simultaneously writing 100 puts and 100 calls with maturity of 3 months and a strike price of €50. The premium you receive for writing each put/call is €2.50.

   •  What is the maximum profit of your position? What should the stock price be, in order to realize this maximum gain?

   •  Report the lower and higher bounds for XYZ’s price 3 months from now that provide you with a non-negative return on your position.

   •  Draw a profit diagram separately for your a) short position on puts, b) short position on calls, and c) total position

You have just landed your dream summer internship, and your boss asks you to analyze a project that has an investment cost of 3,500,000, to be paid today (t = 0), and will generate a cash-flow of 350,000 in the first year (t = 1). The cash-flow will then grow at 12% per year for the next eight years (the last time the cash-flow grows at 12% is from t = 8 to t = 9). Afterwards, as competition increases, cash-flow growth is expected to be only 4% per year in perpetuity. (The cash-flow grows at 4% from t = 9 to t = 10 and forever thereafter.) The discount rate is 18%.

a. (3 points) Start by drawing the timeline, showing the cash flows at t = 0, 1, 2, 3, 8, 9, 10, 11 (the amount and how you calculated it).

b. (10 points) What is the NPV of this project? Please show how to do by hand and excel ( i have got totally different numbers so please show both)

c. (3 points) Do you recommend accepting or rejecting the project? Why? (Three sentences at most.)

d. (4 points) Write down the equation for the IRR of this project. (You don’t have to solve for the IRR, just write the equation whose solution is the IRR.) Please show how to do by hand

Find PPE + Installation in Year 0 of CASH FLOWS

Find Opportunity Costs/Benefits in YEAR 0

Find Opportunity Costs/Benefits in YEAR 5

Find Salvage Value in Year 5

Find Tax Impact of Salvage in Year 5

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Tesla is considering expanding their production facilities to meet the growing demand for Tesla cars. You are given the following information:

The expansion would be a 5-year project. The expansion would take place on a plot of land that Elon Musk (the founder of Tesla) already owns. If the expansion doesn’t take place, the land could be sold today for $7,000,000.

Tesla commissioned a study on the feasibility of expansion three months ago, and paid $2,500,000 to consultants for the report.

To build the factory on the land would require a $80,000,000 up front investment in plant and property and an additional $15,000,000 in installation costs for the machinery.

Running the factory and machines will result in $7,000,000 of fixed costs per year.

Net Working Capital would have to increase by $1240000 at the beginning of the project (this money could be released at the end of the 5-year project).

Tesla would depreciate the factory and machinery using a 5-year MACRS schedule.

The factory and machinery can be sold off at the end of the 5-year project for $21,000,000.

-----> Elon Musk’s land can be sold off at the end of the 5-year project for $3500000.

Assume that the corporate tax rate is 21%. The new retail price for Tesla’s cars in yar 1 will equal $35,000, the existing retail price for the cheapest model (google "Tesla retail price") This price will increase by 5% per year during each year of the project.

Due to the expansion, Tesla will sell 12,000 (incremental) cars in Year 1, 15,000 in Year 2, and 18,000 in each of Years 3-5 of the project.

You bought one of Great White Shark Repellant Co.’s 11 percent coupon bonds one year ago for $780. These bonds make annual payments and mature 7 years from now. Suppose you decide to sell your bonds today when the required return on the bonds is 13 percent. If the inflation rate was 3 percent over the past year, what was your total real return on investment?

Consider the following abbreviated financial statements for Cabo Wabo, Inc.:
  

a. What is owners’ equity for 2015 and 2016? (Do not round intermediate calculations and round your answers to the nearest whole number, e.g., 32.)
  

b. What is the change in net working capital for 2016? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Change in net working capital            $

c. In 2016, the company purchased $5,941 in new fixed assets. The tax rate is 30 percent.

1. How much in fixed assets did the company sell? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Fixed assets sold            $

2. What is the cash flow from assets for the year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Cash flow from assets            $

d. During 2016, the company raised $1,885 in new long-term debt.

1. What is the cash flow to creditors? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Cash flow to creditors            $

2. How much long-term debt must the company have paid off during the year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Debt retired            $

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 $

Lucas Corp. has a debt-equity ratio of .9. The company is considering a new plant that will cost $108 million to build. When the company issues new equity, it incurs a flotation cost of 7.8 percent. The flotation cost on new debt is 3.3 percent.

a. What is the initial cost of the plant if the company raises all equity externally? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole dollar amount, e.g., 1,234,567.)

b. What is the initial cost of the plant if the company typically uses 60 percent retained earnings? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole dollar amount, e.g., 1,234,567.)

c. What is the initial cost of the plant if the company typically uses 100 percent retained earnings? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole dollar amount, e.g., 1,234,567.)