3) Frank is considering the following two investment options that his broker has offered. Which one should he choose and why?
(show work)

Option 1) Deposit $50,000 today, and for the next 10 years make a payment of $1,000 at the end of each month. After 10 years, you will be able to withdraw a total of $300,000 from your account.

Option 2) Deposit $80,000 today, and for the next 10 years make a payment of $10,000 at the end of each year. After 10 years, you will be able to withdraw a total of $300,000 from your account.

Great company is going to issue new coupon bonds. The bond issue is going to have the following characteristics: bonds mature in 8 years from now and carry 4% coupon rate paid out quarterly. The par value of a bond is $5000 and the prevailing market interest rate for bonds with similar and maturity is 6%. Altogether 12000 bonds will be issued.

a) Find the value of a single bond issue by Great company

b) How much capital is company Inc. going to raise through the issue of bonds , If the issue costs amount to 0.45% of the par value of each bond.

Question 2:
The most commonly used method of valuation of shares in Australia is the price earnings (PE) multiple methodology.

Outline three limitations of using this methodology.

. Q Corp. has a Basic Earning Power (BEP) ratio of 15%, and has a TIE ratio of 6. Total assets are $100,000, and the debt-equity ratio of 1. The corporate tax rate is 40%.

Compute ROA and ROE?

You are a Japanese company that manufactures laptops in Japan. Your business model is mainly export based; you export to China. You also import the chips for your laptops from India. Think about and answer the following questions:

.A. If there was a 20% appreciation in the Yen (Japanese currency) as compared to the Chinese Yuan, how would this impact your laptop business?

B. If there was a 50% depreciation in the Indian Rupee as compared to the Yen, how would this impact your laptop business? (Hint: Remember you import chips from India).

minimum 200 words

Explain the concept of coordinated financial statements? In what ways are the major financial statements coordinated? (4points)

CASH FLOW AND CAPITAL BUDGETING Aus Car Execs (ACE) is set up as a sole trader and is analysing whether to enter the discount used rental car market. This project would involve the purchase of 100 used, late-model, midsized automobiles at the price of $9,500 each. In order to reduce their insurance costs, ACE will have a LoJack Stolen Vehicle Recovery System installed in each automobile at the cost of $1,000 per vehicle. ACE will also utilise one of their abandoned lots to store the vehicles. If ACE does not undertake this project, they could sublease this lot to an auto repair company for $80,000 per year. ACE will pay the $20,000 annual maintenance cost on this lot whether the lot is subleased or used for this project. Also, if this project is undertaken, the net working capital will increase by $50,000. For taxation purposes, the useful life of the automobiles is determined to be six years, and they will be depreciated using the diminishing value method. Each car is expected to generate $4,800 a year in revenue and have operating costs of $1,000 per year. Starting six years from now, one-quarter of the fleet is expected to be replaced every year with a similar fleet of used cars. This is expected to result in net cash flow (including acquisition costs) of $100,000 per year continuing indefinitely. This discount rental car business is expected to have a minimum impact on ACE’s regular rental car business where the net cash flow is expected to fall by only $25,000 per year. ACE expects to have a marginal tax rate of 32%. Based on this information, answer the following questions.

1. What is the initial cash flow (fixed asset expenditure) for this discount used rental car project?

2. Is the cost of installing the LoJack System relevant to this analysis?

6. Estimate the net cash flow for each of the next six years.

7. How are the possible cannibalisation costs considered in this analysis?

8. How does the opportunity to sublease the lot affect this analysis?

9. What do you estimate as the terminal value of this project at the end of year 6 (use a 12% discount rate for this calculation)?

Executive summary on Documents clearance?

Executive summary on operation department?

Introduction on documents clearance?

Taco Salad Manufacturing, Inc., plans to announce that it will issue $2.27 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with a coupon rate of 8 percent. The company is currently all-equity and worth $6.74 million with 210,000 shares of common stock outstanding. After the sale of the bonds, the company will maintain the new capital structure indefinitely. The annual pretax earnings of $1.51 million are expected to remain constant in perpetuity. The tax rate is 23 percent.

a. What is the expected return on the company’s equity before the announcement of the debt issue? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

d. What is the company’s stock price per share immediately after the repurchase announcement? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

e-1. How many shares will the company repurchase as a result of the debt issue? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

e-2. How many shares of common stock will remain after the repurchase? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

g. What is the required return on the company’s equity after the restructuring? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

New Business Ventures, Inc., has an outstanding perpetual bond with a coupon rate of 12 percent that can be called in one year. The bond makes annual coupon payments and has a par value of $1,000. The call premium is set at $145 over par value. There is a 60 percent chance that the interest rate in one year will be 14 percent, and a 40 percent chance that the interest rate will be 9 percent. If the current interest rate is 12 percent, what is the current market price of the bond? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Atlantic Manufacturing is considering a new investment project that will last for four years. The delivered and installed cost of the machine needed for the project is $23577 and it will be depreciated according to the three-year MACRS schedule. The project also requires an initial increase in net working capital of $293. Financial projections for sales and costs are in the table below. In addition, since sales are expected to fluctuate, NWC requirements will also fluctuate. The end-of-year NWC requirements are included below (hint: these NWC capital requirements DO NOT represent the change in NWC for the period). The $0 requirement for NWC at the end of year 4 means that all NWC is recovered by the end of the project. The corporate tax rate is 35% and the required return on the project is 12%.

What is the project’s NPV? (Round answer to 2 decimal places. Do not round intermediate calculations).

What information does current, quick, and debt ratios provide? If you were concerned about the result of the ratios, what could be done to adjust these ratios? In what ways could these ratios be negatively impacted? When assessing the results of these ratios, what advice would you have for this organization if it was considering securing financing for a major capital expense?

Kolby Corp. is comparing two different capital structures. Plan I would result in 33,000 shares of stock and $96,000 in debt. Plan II would result in 27,000 shares of stock and $288,000 in debt. The interest rate on the debt is 5 percent.

a. Ignoring taxes, compare both of these plans to an all-equity plan assuming that EBIT will be $130,000. The all-equity plan would result in 36,000 shares of stock outstanding. What is the EPS for each of these plans? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

b. In part (a), what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations.)

c. Ignoring taxes, at what level of EBIT will EPS be identical for Plans I and II? (Do not round intermediate calculations.) d-1. Assuming that the corporate tax rate is 24 percent, what is the EPS for each of the plans? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

d-2. Assuming that the corporate tax rate is 24 percent, what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations.)

d-3. Assuming that the corporate tax rate is 24 percent, when will EPS be identical for Plans I and II? (Do not round intermediate calculations.)

Briefly, describe the nature and use of the following corporate planning tools:

Organizational objectives