Johnsn and Hill formed a company, and 2018 was their first year of operation.

a) To establish Johnson & Hill each contributed a total of $55,000 in exchange for common stock.

b) Johnson & Hillt specializes in high-end parties. The first year they conducted 96 events and revenue for the first year amounted to $480,000, of which 95% was to be paid by the date of the event and the remainder due within 30 days of the event

c) Clients owe $16,000 at the end of the year from the services provided in December.

d) At the beginning of the year, a storage building was rented, signing a two-year lease for $15,000 per year and making a $4,000 refundable security deposit. The first year’s lease payment and the security deposit were paid at the beginning of the year.

e) At the beginning of the year, the company purchased a computerized stage and lighting for $120,000 expected to be useful for twelve years. The company paid 20% down in cash and signed a four-year note at the bank for the remainder (with 10% interest-only to be paid annually until maturity). They also purchased a flatbed trailer to haul it with, for $8,000, also with an expected 15 year life. Johnson & Hill must lease a large truck to haul the trailer for each event, which costs $1,000 per day.

f) Other operating expenses, including wages, deprecation on other equipment, utilities, and rent on the storage building noted in (d) and (e) above, totaled $136,000 for the first year. No expenses were accrued or unpaid at the end of the year.

g) Johson & Hill purchased other equipment (tables & carts, ice machine, food heating trays and bags, helium tanks, music system, etc) for $10000 with an estimated life of 10 years and no salvage value. Salaries and wages for the year total $109467 including payroll taxes.

h) The company declared and paid a $50,000 cash dividend at the end of the first year.

i) Johnson & Hill is in the 35% corporate tax bracket.

1. Did the company generate more or less cash flow from operations than it earned in net income? Explain why there is a difference.

2. Compute, explain & analyze the following ratios:

a) Gross Profit

b) Operating Leverage ratio

c) Return on common equity

d) Current ratio

e) Operating Cash flow to current liabilities

f) Long-term debt to assets

g) Interest coverage

In the following year, there is a 10% chance of a bear market, a 20% chance of a bull market, and a 70% chance of a neutral market.
Debt will return -2%, 5%, and 5% in the bear, bull and neutral market, respectively.
Equity will return -15%, 15%, and 8% in the bear, bull and neutral market , respectively .

What is the expected return of debt in %?  (round to 1 decimal place)

What is the volatility of equity in %? (round to 1 decimal place)

What is the covariance of debt and equity? (leave as a decimal; round to 5 decimal places)

What is the correlation of debt and equity?   (leave as a decimal; round to 3 decimal places)

What is the expected return of a risky portfolio made up of 70% bonds and 30% stock?  (units of %; round to 2 decimal places)  

What is the volatility of a risky portfolio made up of 70% bonds and 30% stock?    (units of %; round to 1 decimal places)   


What is the Sharpe ratio of the risky portfolio made up of 70% bonds and 30% stock? (round to 2 decimal places)

Johnsn and Hill formed a company, and 2018 was their first year of operation.

a) To establish Johnson & Hill each contributed a total of $55,000 in exchange for common stock.

b) Johnson & Hillt specializes in high-end parties. The first year they conducted 96 events and revenue for the first year amounted to $480,000, of which 95% was to be paid by the date of the event and the remainder due within 30 days of the event

c) Clients owe $16,000 at the end of the year from the services provided in December.

d) At the beginning of the year, a storage building was rented, signing a two-year lease for $15,000 per year and making a $4,000 refundable security deposit. The first year’s lease payment and the security deposit were paid at the beginning of the year.

e) At the beginning of the year, the company purchased a computerized stage and lighting for $120,000 expected to be useful for twelve years. The company paid 20% down in cash and signed a four-year note at the bank for the remainder (with 10% interest-only to be paid annually until maturity). They also purchased a flatbed trailer to haul it with, for $8,000, also with an expected 15 year life. Johnson & Hill must lease a large truck to haul the trailer for each event, which costs $1,000 per day.

f) Other operating expenses, including wages, deprecation on other equipment, utilities, and rent on the storage building noted in (d) and (e) above, totaled $136,000 for the first year. No expenses were accrued or unpaid at the end of the year.

g) Johson & Hill purchased other equipment (tables & carts, ice machine, food heating trays and bags, helium tanks, music system, etc) for $10000 with an estimated life of 10 years and no salvage value. Salaries and wages for the year total $109467 including payroll taxes.

h) The company declared and paid a $50,000 cash dividend at the end of the first year.

i) Johnson & Hill is in the 35% corporate tax bracket.

1. Prepare a balance sheet as of the end of the first year.

2. Prepare a statement of retained earnings as of the end of the first year.

3. Prepare a statement of cash flows for the first year using the direct method in the Operating Activities section.

4. Complete a vertical analysis of the Income statement.

5. Did the company generate more or less cash flow from operations than it earned in net income? Explain why there is a difference.

6. Compute, explain & analyze the following ratios:

a) Gross Profit

b) Operating Leverage ratio

c) Return on common equity

d) Current ratio

e) Operating Cash flow to current liabilities

f) Long-term debt to assets

g) Interest coverage

Find a story in the news in the past year that was partially or fully retracted or corrected after it was discovered that the field research was not done properly. Explain what was done incorrectly that led to the error, and what steps should have been taken in order to avoid the issue. Be sure to include the news story in your submission.

At the end of the year, a company offered to buy 4,520 units of a product from X Company for a special price of $12.00 each instead of the company's regular price of $17.00 each. The following information relates to the 66,200 units of the product that X Company made and sold to its regular customers during the year:

Fixed cost of goods sold for the year were $141,668, and fixed period costs were $69,510. Variable period costs include selling commissions equal to 2% of revenue.

6. Profit on the special order is

7. Assume the following two changes for the special order: 1) variable cost of goods sold will decrease by $0.84 per unit, and 2) there will be no selling commissions. What would be the effect of these two changes on the special order profit?

8. There is concern that regular customers will find out about the special order, and X Company's regular sales will fall by 600 units. As a result of these lost sales, X Company's profits would fall by

Below are the prices on the first and last day of the year for Netflix common stock for several recent years.

Netflix paid no dividends over this period. Calculate the return that an investor would have earned in each calendar year. What is the average of these annual​ returns? Next, calculate the average annual growth rate in Netflix stock from the first day of 2014 to the last day of 2017. Compare these two answers.

The rate of return for 2017 is _____​%. ​(Enter as a percentage and round to the nearest whole​ percent.)

The rate of return for 2016 is _____​%.​(Enter as a percentage and round to the nearest whole​ percent.)

The rate of return for 2015 is _____​%. ​(Enter as a percentage and round to the nearest whole​ percent.)

The rate of return for 2014 is _____​%.​(Enter as a percentage and round to the nearest whole​ percent.)

The average of these returns is _____​%.​(Enter as a percentage and round to two decimal​ places.)

The average annual growth rate is _____% ​(Enter as a percentage and round to two decimal​ places.)

It is given that the effective rate of interest for the n-th year period is in = 0.01 + e^(−n)

(a) Find a(t) for t being an integer.

(b) If the principal is $100, find the total amount of interest earned in year 3, 4 and 5.

Consider a stock that plans to pay a dividend in year of 4$. The dividends will increase from that point forward permanently at a rate of 2% per year. The required return is 14%.

a. What is the stock price today, in two years, and in 16 years?

b. What are the dividend yield and capital gains yield for this stock this year, in two years, and in 16 years?

Thank you.

Mohr Company purchases a machine at the beginning of the year at a cost of $30,000. The machine is depreciated using the straight-line method. The machine’s useful life is estimated to be 8 years with a $4,000 salvage value. The book value of the machine at the end of year 2 is:

PLEASE HELP!!

1. The provost at the University of Chicago claimed that the entering class this year is larger than the entering class from previous years but their mean SAT score is lower than previous years. He took a sample of 20 of this year’s entering students and found that their mean SAT score is 1,501 with a standard deviation of 53. The University’s record indicates that the mean SAT score for entering students from previous years is 1,520. He wants to find out if his claim is supported by the evidence at a 5% level of significance. Round final answers to two decimal places. Solutions only.

(A) The parameter the president is interested in is:
(a) the mean number of entering students to his university this year.
(b) the mean number of entering students to all U.S. universities this year.
(c) the mean SAT score of the entering students to his university this year.
(d) the mean SAT score of the entering students to all U.S. universities this year.

(e) None of the above.

(B) The population the president is interested in is:
(a) all entering students to all universities in the U.S this year.

(b) all entering students to his university this year.
(c) all SAT test centers in the U.S. this year.
(d) the SAT scores of all students entering universities in the U.S. this year.

(e) None of the above.

(F) True, False, or Uncertain: The null hypothesis would be rejected.

(G) True, False, or Uncertain: The null hypothesis would be rejected if a 10% probability of committing a Type I error is allowed.

(I) True, False, or Uncertain: The evidence proves beyond a doubt that the mean SAT score of the entering class this year is lower than previous years.

(J) True, False, or Uncertain: If these data were used to perform a two-tail test, the p-value would be 0.1254.