You would like to vacation in Hawaii for one week each year.
You can buy a time share for a vacation home in Hawaii for $18,500 today and a maintenance fee of $600 per year starting next year. You expect to sell the time share in 10 years for $15,000 .
Alternatively you can just pay for the week vacation each year (starting next year). Each year will cost you $1,500 .

If your investments earn 5% per year (compounded annually) which alternative is cheaper and by how much in present value terms?
Time Share Pay each year

Group of answer choices

Buy the time share it will save you $2,459

Pay each year it will save you $2,252

Pay each year it will save you $2,342

Pay each year it will save you $2,506

Now assume that Temp Force's dividend is expected to experience nonconstant growth of 30% from year 0 to Year 1, 25% from Year 1 to Year 2, and 15% from Year 2 to Year 3. After Year 3, dividends will grow at a constant rate of 6%. What is the stocks intrinsic value under these conditions? What are the expected dividend yield and capital gains yield during the first year? What are the expected dividend yield and capital gains yield during the fourth year (from Year 3 to Year 4)?

The following financial statements relate to Whinchat plc, which operates a wholesale carpet business:

Income statements for the year ended 31 March Year 12 and Year 13

*    All sales and purchases are made on credit.

Balance sheets as at 31 March Year 12 and Year 13

1. Calculate the operating profit margin of Whinchat plc as at 31 March Year 12 and as at 31 March Year 13.
2. Calculate the gross profit margin of Whinchat plc as at 31 March Year 12 and as at 31 March Year 13.
3. Calculate the inventory turnover period of Whinchat plc as at 31 March Year 12 and as at 31 March Year 13.
4. Calculate the current ratio of Whinchat plc as at 31 March Year 12 and as at 31 March Year 13.
5. Calculate the acid test ratio of Whinchat plc as at 31 March Year 12 and as at 31 March Year 13.
6. Calculate the gearing ratio of Whinchat plc as at 31 March Year 12 and as at 31 March Year 13.
7. Calculate the interest cover ratio of Whinchat plc as at 31 March Year 12 and as at 31 March Year 13.

Suppose a life insurance company sells a ​$260 comma 000260,000 ​one-year term life insurance policy to a 2424​-year-old female for ​$350350. The probability that the female survives the year is 0.9996410.999641. Compute and interpret the expected value of this policy to the insurance company. The expected value is ​$nothing. ​(Round to two decimal places as​ needed.) Which of the following interpretation of the expected value is​ correct? A. The insurance company expects to make an average profit of ​$31.8131.81 on every 24 dash year dash old24-year-old female it insures for 1 month. B. The insurance company expects to make an average profit of ​$349.87349.87 on every 24 dash year dash old24-year-old female it insures for 1 year. C. The insurance company expects to make an average profit of ​$256.66256.66 on every 24 dash year dash old24-year-old female it insures for 1 year. D. The insurance company expects to make an average profit of ​$23.3323.33 on every 24 dash year dash old24-year-old female it insures for 1 month.

Dexter Industries purchased packaging equipment on January 8 for $236,000. The equipment was expected to have a useful life of three years, or 5,700 operating hours, and a residual value of $19,400. The equipment was used for 2,280 hours during Year 1, 1,767 hours in Year 2, and 1,653 hours in Year 3.

Required:

1. Determine the amount of depreciation expense for the three years ending December 31, Year 1, Year 2, Year 3, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the three years by each method.

Note: For all methods, round the answer for each year to the nearest whole dollar.

2. What method yields the highest depreciation expense for Year 1?

3. What method yields the most depreciation over the three-year life of the equipment?

East Point Retail, Inc., sells professional women's apparel through company-owned retail stores. Recent financial information for East Point is provided below (all numbers in thousands).

Assume the apparel industry average return on total assets is 8.0%, and the average return on stockholders’ equity is 15.0% for the year ended April 2, Year 3.

a. Determine the return on total assets for East Point for fiscal Years 2 and 3. Round to one decimal place.

b. Determine the return on stockholders' equity for East Point for fiscal Years 2 and 3. Round to one decimal place.

The current yield curve for default-free zero-coupon bonds is as follows:

Maturity (Years) YTM
1 5%
2 4%
3 3%
4 2%

a. What are the implied 1-year forward rates for year 2, year 3, and year 4? (3 points)
b. Assume that the pure expectations hypothesis of the tern structure is correct. If market expectations are accurate, what will be the pure yield curve (i.e., the YTM on 1-year, 2-year and 3-year zero-coupon bonds) next year? (3 points)
c. If you purchase a 3-year zero-coupon bond now, what is the expected total rate of return over the next year? What if you purchase a 4-year zero-coupon bond? (4 points)
d. What should be the current price of a 4-year maturity bond with a 3% coupon rate paid annually? If you purchased it at that price, what would your total expected rate of return be over the next year (coupon plus price change)? (5 points)

Consider an economy that produces only three types of fruit: apples, oranges & bananas.

In the base year the production & price data are as follows:
Fruit      Quantity    Price
Apples 3000 Unit Rs. 2 per unit
Bananas 6000 Unit Rs. 3 per unit
Oranges 8000 Unit Rs. 4 per unit

In the current year the production & price data are as follows:
Fruit     Quantity    Price
Apples 4000 Unit Rs. 3 per unit
Bananas 14,000      Unit Rs. 2 per unit
Oranges 32,000      Unit Rs. 5 per unit

a) Find nominal GDP in the current year & in the base year. What is the percentage increase since base year? 7
b) Find real GDP in the current year & in the base year. By what percentage does a real GDP increase from the base year to current year?
c) Find the GDP deflator for the current year & the base year. By what percentage does the price level change from the base year to current year?

Nippon Steel’s expenses for heating and cooling a large manufacturing facility are expected to increase according to an arithmetic gradient beginning in year 2. If the cost is $550,000 this year (year 0) and will be $550,000 again in year 1, but then it is estimated to increase by $52,000 each year through year 12, what is the equivalent annual worth in years 1 to 12 of these energy costs at an interest rate of 13% per year?

The equivalent annual worth is determined to be $ ?

Eb's Eggs just bought a new egg sorting machine for $109,569. The machine will save $32,567 in year 1, $31,888 in year 2, $15,041 in year 3, and $9,316 per year from year 4 until the machine is salvaged at the end of year 11. At the end of year 11 it will have a salvage value of $2,409. Eb uses a MARR of 9% to make decisions.

What is the payback period (PBP) for this machine?