A business process outsourcing has the following avoided costs, incurred costs, and other characteristics:

• Costs avoided by outsourcing:
  • Salaries, wages, and benefits = $450,000 a year
  • Furniture and equipment = $100,000 a year
  • Supplies = $150,000 a year
  • Software = $10,000 a year
  • Facility rent/lease = $75,000 a year
  • Utilities and communications = $20,000 a year
  • Transition revenue now
    • Sale of unused assets = $10,000
• Costs incurred by outsourcing:
  • Payments to supplier = $440,000 a year
  • Contract administration = $30,000 a year
  • Transition cost now
    • Severance pay = $40,000
• 4-year time horizon
• Discount rate = 4% per year
• Assume all cash flows occur at the beginning of each year
• Assume “now” is the beginning of Year 1.

Use Excel to answer the following question. Based on the NPV of the cash flows, should this business process be outsourced?

Please show all the formulas used in excel.

13. How long will it take $800 to double if it earns the following rates? Compounding occurs once a year. Round your answers to two decimal places.

1. 6%.

   year(s)

2. 9%.

   year(s)

3. 19%.

   year(s)

4. 100%.

   year(s)

14. Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent.

1. $600 per year for 10 years at 14%.

   $  

2. $300 per year for 5 years at 7%.

   $  

3. $800 per year for 5 years at 0%.

   $  

4. Rework parts a, b, and c assuming they are annuities due.

   Future value of $600 per year for 10 years at 14%: $  

   Future value of $300 per year for 5 years at 7%: $  

   Future value of $800 per year for 5 years at 0%: $  

Part 1) Linda just sold all the shares of company A stock that she owned for $156/share. She purchased the stock one year ago for $150/share. Over the year, she received $1/share in dividend. Calculate the return on her investment.

Part 2) The interest rate on one-year Treasury-bond is 0.4%, the rate on two-year Treasury bond is 0.8%, the rate on three-year T-bond is 1.1%.

a. Compute the expected interest rate in the second year (year 2)

b. Compute the expected interest rate in the third year (year 3).

Part 3) The expected inflation rate for the next three years are estimated: 2.5% for 2020, 3.5% for 2021, and 4.2% for 2022. Calculate the inflation premiums (IP) for 1-year bond, for 2-year bond and 3- year bond.

Question 5:

The country of Pantherville produces two goods: footballs and basketballs. Below is a table showing prices and quantities of output for three years:

1. Calculate Nominal GDP for Years 1, 2 and 3

2. Using Year 1 as the base Year, calculate Real GDP for years 1, 2 and 3

3. What is the economic growth rate from year 1 to 2 and from year 2 to 3?

4. What is the GDP per capita in Pantherville in years 1, 2 and 3?

5. What is the inflation rate from year 1 to year 2 and from year 2 to year 3?

Miglietti Restaurants is looking at a project with the following forecasted​ sales: ​ first-year sales quantity of 35,000​, with an annual growth rate of 4.00​% over the next ten years. The sales price per unit will start at $44.00 and will grow at 2.00% per year. The production costs are expected to be 55​% of the current​ year's sales price. The manufacturing equipment to aid this project will have a total cost​ (including installation) of $2,300,000. It will be depreciated using​ MACRS, and has a​seven-year MACRS life classification. Fixed costs will be ​$330,000 per year. Miglietti Restaurants has a tax rate of 40​%. What is the operating cash flow for this project over these ten​ years? Find the NPV of the project for Miglietti Restaurants if the manufacturing equipment can be sold for $140,000 at the end of the​ ten-year project and the cost of capital for this project is 7​%.

a) What is the operating cash flow for this project in year​ 1? year 2? year 3? year 4? year 5? year 6? year 7? year 8? year 9? year 10?

b) What is the after tax cash flow of the project of disposal?

c) What is the NPV of the project?

You receive an inheritance of a thirty-year annuity, which pays 1 at the end of the first year, 2 at the end of the second year, 1 at the end of the third year, 4 at the end of the fourth year, 1 at the end of the fifth year, etc. This pattern will continue such that 1 will be paid out at the end of 29th year and 30 will be paid out at the end of the 30th year. Find the present value of this inheritance if the annual effective interest rate is 4%(Answer: 120.17)

Program 3: Give a baby $5,000! Did you know that, over the last century, the stock market has returned an average of 10%? You may not care, but you’d better pay attention to this one. If you were to give a newborn baby $5000, put that money in the stock market and NOT add any additional money per year, that money would grow to over $2.9 million by the time that baby is ready for retirement (67 years)! Don’t believe us? Check out the compound interest calculator from MoneyChimp and plug in the numbers!

To keep things simple, we’ll calculate interest in a simple way. You take the original amount (called the principle) and add back in a percentage rate of growth (called the interest rate) at the end of the year. For example, if we had $1,000 as our principle and had a 10% rate of growth, the next year we would have $1,100. The year after that, we would have $1,210 (or $1,100 plus 10% of $1,100). However, we usually add in additional money each year which, for simplicity, is included before calculating the interest.

Your task is to design (pseudocode) and implement (source) for a program that 1) reads in the principle, additional annual money, years to grow, and interest rate from the user, and 2) print out how much money they have each year. Task 3: think about when you earn the most money!

Lesson learned: whether it’s your code or your money, save early and save often…

Sample run 1:

Enter the principle: 2000

Enter the annual addition: 300

Enter the number of years to grow: 10

Enter the interest rate as a percentage: 10

Year 0: $2000

Year 1: $2530

Year 2: $3113

Year 3: $3754.3

Year 4: $4459.73

Year 5: $5235.7

Year 6: $6089.27

Year 7: $7028.2

Year 8: $8061.02

Year 9: $9197.12

Year 10: $10446.8

Sample run 2 (yeah, that’s $9.4MM):

Enter the principle: 5000

Enter the annual addition: 1000

Enter the number of years to grow: 67

Enter the interest rate as a percentage: 10

Year 0: $5000

Year 1: $6600

Year 2: $8360

Year 3: $10296

Year 4: $12425.6

Year 5: $14768.2

.

.

Year 59: $4.41782e+06

Year 60: $4.86071e+06

Year 61: $5.34788e+06

Year 62: $5.88376e+06

Year 63: $6.47324e+06

Year 64: $7.12167e+06

Year 65: $7.83493e+06

Year 66: $8.61952e+06

Year 67: $9.48258e+06

please in pseudocode and c++. thank you! sorry about that.

A project requires an initial investment of $350,000 and will return $140,000 each year for six years.

If taxes are ignored and the required rate of return is 10%, what is the project's net present value (rounded to the nearest dollar)?

Group of answer choices

$259,742

$114,803

$340,000

$109,742

A project requires an initial investment of $350,000 and will return $140,000 each year for six years.

Ignoring qualitative issues and income taxes, should the company invest in this project?

Group of answer choices

No, because the net present value shows a return that is less than the company's required rate of return.

There is not enough quantitative information to answer this question.

No, because the internal rate of return cannot be calculated.

Yes, because the net present value shows a return that is above the company's required rate of return.

Clothing Products LLC manufactures shirts. The company is interested in outsourcing production to a reputable manufacturing company that can supply the shirts for $10 per unit. Clothing Products LLC produces 20,000 shirts each year. Variable production costs are $4 per unit and annual fixed costs are $160,000. If production is outsourced, all variable costs and 60 percent of annual fixed costs will be eliminated. Ignoring qualitative factors and income taxes, which is the best alternative?

Group of answer choices

Producing the shirts internally is the best option and results in $24,000 in savings compared to outsourcing production.

Outsourcing production is the best option and results in $64,000 in savings.

Producing the shirts internally is the best option and results in $64,000 in savings compared to outsourcing production.

Outsourcing production is the best option and results in $24,000 in savings.

Sugar Land Company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by a MBA student. The production line would be set up in unused space in Sugar Land’ main plant. Total cost of the machine is $260,000. The machinery has an economic life of 4 years, and MACRS will be used for depreciation. The machine will have a salvage value of 40,000 after 4 years.


The new line will generate Sales of 1,350 units per year for 4 years and the variable cost per unit is $100 in the first year. Each unit can be sold for $200 in the first year. The sales price and variable cost are expected to increase by 3% per year due to inflation. Further, to handle the new line, the firm’s net working capital would have to increase by $30,000 at time zero (The NWC will be recouped in year 4). The firm’s tax rate is 40% and its weighted average cost of capital is 10%.

1. What are the annual depreciation expenses for years 1 through 4? (10 Points)

2. Calculate the annual sales revenues and costs (other than depreciation), years 1 through 4. (10 points)

3. Estimate annual (Year 1 through 4) operating cash flows (40 points)

4. Estimate the after tax salvage cash flow (10 points)
5. Estimate the cash flow of this project (10 Points)

6. Estimate the NPV, IRR, MIRR, and profitability Index of the project. (20 points)

During the current year, Knoxx County levied property taxes of $2,000,000, of which 1% is expected to be uncollectible. The following amounts were collected during the current year:

What amount of property tax revenue should Knoxx County report in its government-wide statement of activities?

$2,000,000

$1,980,000

$1,800,000

$1,970,000