I’m going to put $100,000 into an investment at the beginning of year 1. At the end of year 3, I am going to add $50,000 more to the investment. In year 4, I will start to remove $20,000 per year (on the first day of the year). If the interest rate on the investment is 8.2%/year (compounded annually), how long (to the nearest year) before the balance in the investment drops to zero?

PLEASE SOLVE BY HAND!

A stock is selling today for $50 per share. At the end of the year, it pays a dividend of $3 per share and sells for $58.

a. What is the total rate of return on the stock? (Enter your answer as a whole percent.)

b. What are the dividend yield and percentage capital gain? (Enter your answers as a whole percent.)

c. Now suppose the year-end stock price after the dividend is paid is $42. What are the dividend yield and percentage capital gain in this case? (Negative amounts should be indicated by a minus sign. Enter your answers as a whole percent.)

d. Is there any change in the dividend yield calculated in parts (b) and (c)?

On December 1 of the current year, the following accounts and their balances appear in the ledger of Latte Corp., a coffee processor:

At the annual stockholders’ meeting on March 31, the board of directors presented a plan for modernizing and expanding plant operations at a cost of approximately $11,000,000. The plan provided (a) that a building, valued at $3,360,000, and the land on which it is located, valued at $945,000, be acquired in accordance with preliminary negotiations by the issuance of 123,000 shares of common stock, (b) that 38,800 shares of the unissued preferred stock be issued through an underwriter, and (c) that the corporation borrow $3,700,000. The plan was approved by the stockholders and accomplished by the following transactions:

Journalize the entries to record the May transactions. Refer to the Chart of Accounts for exact wording of account titles.

Chart of Accounts

Journal

Journalize the entries to record the May transactions. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

The number of floods that occur in a certain region over a given year is a random variable having a Poisson distribution with mean 2, independently from one year to the other. Moreover, the time period (in days) during which the ground is flooded, at the time of an arbitrary flood, is an exponential random variable with mean 5. We assume that the durations of the floods are independent. Using the central limit theorem, calculate (approximately)
(a) the probability that over the course of the next 50 years, there will be at least 80 floods in this region. Assume that we do not need to apply half-unit correction for this question.

(b) the probability that the total time during which the ground will be flooded over the course of the next 50 floods will be smaller than 200 days.

Consider a stock with a beginning of the year price of 21. The stock's dividends and quarterly stock price are as follows:

The effective annual yield on this stock is ____________.

You are offered an investment with returns of $ 1,752 in year 1, $ 4,823 in year 2, and $ 5,748 in year 3. The investment will cost you $ 6,757 today. If the appropriate Cost of Capital (quoted interest rate) is 7.9 %, what is the Profitability Index of the investment? Enter your answer to the nearest .01. Do not use the $ sign or commas in your answer. If the NPV is negative, use the - sign.

You are offered an investment with returns of $ 2,847 in year 1, $ 4,914 in year 2, and $ 3,048 in year 3. The investment will cost you $ 7,014 today. If the appropriate Cost of Capital (quoted interest rate) is 9.1 %, what is the Profitability Index of the investment? Enter your answer to the nearest .01. Do not use the $ sign or commas in your answer. If the NPV is negative, use the - sign.

The Winston Company estimates that the factory overhead for the following year will be $716,400. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 39,800 hours. The total machine hours for the year was 54,400 hours. The actual factory overhead for the year was $993,000.

Required:

1. You will be paying $34,000 a year in tuition expenses at the end of the next two years. Bonds currently yield 10%. (20 points)

1. What is the present value and duration of your obligation?
2. What maturity zero-coupon bond would immunize your obligation?
3. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 11%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? What if rates fall to 9%?

You will be paying $10,200 a year in tuition expenses at the end of the next two years. Bonds currently yield 9%. a. What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.) Present value $ Duration years b. What is the duration of a zero-coupon bond that would immunize your obligation and its future redemption value? (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Future redemption value" to 2 decimal places.) Duration years Future redemption value $ You buy a zero-coupon bond with value and duration equal to your obligation. c-1. Now suppose that rates immediately increase to 10%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? (Enter your answer as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) Net position changes by $ c-2. What if rates fall to 8%? (Enter your answer as a positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) Net position changes by $