The market value for the JPM stock is $120 dollars. A6-month call option contract on JPM stock with a strike price of $140is traded at $4. In addition, a 6-month put option contract on JPM stock with strike price of $100 is traded at $4.Suppose you take a long position in the call and a long position in the put.

What is the cost of this strategy?

Draw the payoff diagram (or P/L diagram) of this strategy.

A property owner has provided you with the following information. Assume the owner has no other assets or liabilities. The annual gross revenue is $3,275,000. The debt service payment on the loan is $147,000 per month. The capitalization rate is 8%. Assets: Cash $ 1,000,000 Land 1,500,000 Building 29,500,000 Total Assets $ 32,000,000 Liabilities & Equity: Nonrecourse Liabilities $ 25,000,000 Partner’s Capital 7,000,000 Total Liabilities & Capital $ 32,000,000

14. What is the property’s NOI?

Calculate the Debt Service Coverage Ratio?

What is the Debt to Asset Ratio?

Last year’s Debt Ratio for the property was 74%. The industry average Debt to Asset ratio is 82%. Based on the available information would you consider this to be a low, normal or high risk investment and why?

What is the Effective Gross Income Multiplier?

Create an excel workbook for the following questions. Answer these questions under your Solver work for each respective problem.

1. Devos Inc. is building a hotel. It will have 4 kinds of rooms: suites where customers can smoke, suites that are non-smoking, budget rooms where the customers can smoke, and budget rooms that are non-smoking. When we build the hotel, we need to plan for how many rooms of each type we should have. The following are requirements for the hotel:

1. We want to figure out how many rooms of each type to build based on maximizing revenue if we fill up the hotel. We expect to charge $190 for a suite that is non-smoking and $140 for a budget room that is non-smoking. Smoking room customers for both suites and budget rooms will have to pay an additional $20 per night.
2. We can spend up to $7,500,000 on construction of our hotel. The cost to build a non-smoking budget room is $12,000. The cost to build a non-smoking suite is $15,000. It is $3,000 additional for a smoking room of either type for smoke detectors and sprinklers.
3. We require that the number of budget rooms be at least 1.5 times the number of suites, but no more than 3 the number of suites.
4. There needs to be at least 80 suites, but no more than 200.
5. Industry trends recommend that smoking rooms should be less than 50% of the non-smoking room and in addition, we require our builder gives us at least 4 smoking rooms.

Answer the following using your Solver answers:

1. How many of each room type should be built, and what would the revenue be for a night when our hotel was fully booked?
2. Without re-running Solver, what happens to our revenue if we get an additional $1,500,000 for building? Explain in words how you got this answer without re-running solver. Over what amount of construction costs can you use this procedure?
3. Over what range of room price can our budget non-smoking rooms vary over for us to get the same answer for the quantity of each type of room?

A stock currently has a market value of $10. The risk-free rate of return is 3%. In one year, the stock is expected to sell for either $14 or $9. a) What is the value of a twelve-month call option with a strike price of $12? (6 points) b) If the twelve-month call option is traded at $1.2, Recommend a riskless strategy by showing the positions in both shares and calls. (4 points).

A stock currently has a market value of $10. The risk-free rate of return is 3%. In one year, the stock is expected to sell for either $14 or $9.

a) What is the value of a twelve-month call option with a strike price of $12? (6 points)

b) If the twelve-month call option is traded at $1.2, Recommend a riskless strategy by showing the positions in both shares and calls. (4 points).

True or false with justification:

1. Financial Derivatives can be traded in the future markets. They include futures, options and bills.

2. Government bonds are issued by governments to finance the budget deficit, they are short term and less risky than stocks and corporate bonds.

3. The agency problem results from a manager’s concerns about corporate goals and can only be solved through stock options

The Starr Theater, owned by Meg Vargo, will begin operations in March. The Starr will be unique in that it will show only triple features of sequential theme movies. As of March 1, the ledger of Starr showed: Cash $2,950, Land $22,000, Buildings (concession stand, projection room, ticket booth, and screen) $10,000, Equipment $10,000, Accounts Payable $6,000, and Owner’s Capital $38,950. During the month of March, the following events and transactions occurred.

1.) Enter the beginning balances in the ledger.

2.) Journalize the March transactions. Starr records admission revenue as service revenue, rental of the concession stand as rent revenue, and film rental expense as rent expense.(Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

3.) Post the March journal entries to the ledger. (Post entries in the order of journal entries presented in the previous question.)

What are some of the contributing factors of the failure of the audit in halliburton in 2005? and also, did they have audit or accounting failures and if so, please give examples. thank you

At the beginning of 2012, Massachusetts Road Construction entered into a contract to build a road for the government. Construction will take 3 years. The following information as of December 31st, 2012 is available for the contract:

Assume that the company estimates percentage complete based on costs incurred as a percentage of total estimated costs. Under the Percentage-of-Completion method, how much revenue will be reported in 2012?

$6,000,000