The University of Danville is a private not-for-profit university that starts the current year with $700,000 in net assets: $400,000 without donor restrictions and $300,000 with donor restrictions. The $300,000 is composed of $200,000 with purpose restrictions and $100,000 that must be held permanently.

The following transactions occurred during the year.

1. Charged students $1.2 million for tuition and fees.
2. Received a donation of equity investments that had cost the owner $100,000 but is worth $300,000 currently. According to the terms of the gift, the university must hold the investments forever but can spend the dividends for any purpose. Any changes in the value of these securities must be held forever and cannot be spent.
3. Received a cash donation of $700,000 that must be spent to acquire laboratory equipment.
4. Awarded scholarships to students in the amount of $100,000.
5. Paid salary expenses of $149,000 (teaching), $80,000 (research), $50,000 (administrative), and $40,000 (fundraising).
6. Learned that a tenured faculty member is contributing his services for this year and will not accept his $80,000 salary. His time is 70 percent teaching and 30 percent research.
7. Spent $200,000 of the money in (c) on laboratory equipment. The donor had made no specifications about the recording of the acquisition. The equipment is used 80 percent of the time for research and 20 percent of the time for teaching.
8. Learned that the investments in (b) are worth $339,000 at the end of the year.
9. Received cash dividends of $9,000 on the investments in (b).
10. Computed depreciation expense for the year on the equipment in (g) as $32,000.
11. The school’s board of trustees votes to set aside $100,000 of previously unrestricted cash for the future purchase of library books.
12. Received an unconditional promise of $10,000 halfway through the year. The school expects to collect the money in three years. The $10,000 future payment has a present value of $7,513 based on a reasonable annual interest rate of 10 percent.
13. Received an art object as a gift. It is worth $70,000. For financial reporting, it qualifies as work of art/museum piece. The school prefers not to record such gifts unless required.
14. Paid utilities and other general expenses of $83,000 (teaching), $45,000 (research), $43,000 (fundraising), and $50,000 (administrative).
15. Received free services from alumni who come to campus each week and put books on the shelves in the library. Over the course of the year, the school would have paid $103,000 to have this work done.
16. Near the end of the year, the school received a pledge of $40,000 to be collected in two years. It is judged to be conditional and has a present value of $31,200.

Determine the end-of-year balances for net assets without donor restrictions and net assets with donor restrictions by creating a statement of activities for the period. The school has two program services: education and research. It also has two supporting services: fundraising and administration.

At the beginning of the year, you put $2,000 in a new savings account that has a 3% annual interest rate, but the account earns interest at the end of every six months. At the end of the first year, you withdraw $1,000 from the account.

1. How much interest have you earned after six months? Show your work.

2. How much interest have you earned after one year? Show your work.

3. What is the total amount in your account after two years (remember the withdrawal)? Calculate it two different ways and show your work.

a. Use a simple interest formula to calculate the total amount in your account after two years.

b. Use a compound interest formula to calculate the total amount in your account after two years.

4. How much total interest have you earned after two years? Show and explain.

An initial cash outlay of $1.4 million is made for a project. In Year 1, the expected annual cash flow is $900,000. In Years 2–5 the expected annual cash flow is $1,000,000, and in Year 6, the expected annual cash flow is $1.3 million. A cost of capital of 15% is used. The IRR (internal rate of return) is ???

Please show work/calculation using Texas Calculator. No excel.

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. What are the budget implications for Priscilla Wescott?

Priscilla can see that her present plan sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $ at the end of December, with no time left to adjust.

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. What are the budget implications for Priscilla Wescott?

Priscilla can see that her present plan sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $ at the end of December, with no time left to adjust.

What is the value today of a money machine that will pay $1,291.00 per year for 18.00 years? Assume the first payment is made 6.00 years from today and the interest rate is 9.00%.

Consider the following. a. What is the duration of a four-year Treasury bond with a 4 percent semiannual coupon selling at par? b. What is the duration of a three-year Treasury bond with a 4 percent semiannual coupon selling at par? c. What is the duration of a two-year Treasury bond with a 4 percent semiannual coupon selling at par? (For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))

a) Company U will have a FCF of $50,000 in next year. The FCF is expected to decrease by 30 percent year after next year. The FCF will then increase by 20% in third and fourth year, and will keep a constant growth rate of 3% forever. The market value of debt is $220,000, and market value of preferred shares is $80,000. If the required return on the stock is 11 percent, WACC is 9 percent, and the number of share is 18,000, what will a share of stock sell for today?

b) Assume that interest rate is 13 %. Consider the following independent projects:

i) What is the discounted payback for Project A and Project B? Based on discounted payback rule (benchmark of 3 years), what is your decision?

ii) What is the IRR for Project A and Project B? Based on IRR, what is your decision?

on Jan 1 of the current year a company purchased and placed in serice a machine with a cost of $240,000. The company estimated the machines useful life to be 4 years or 60,000 units of output with an estimated salvage valus of $60,000. During the current year 12,000 united were produced

prepare the necessary Dec 31 adjusting journal entry to record depreciation for the current year assuming the company uses

1) units of production methid deoreciation

2) double declinin balance method of depreciation

• 15) If an investor offers $600 at the end of each year for three years and if the interest rate is 8%, the maximum you pay him (PV) of this ordinary annuity is
• 16) Referring to the 15 question, assume that instead of getting the payment of $600 at the end of the year, the investor offers to give you the money at the beginning of the year, the maximum amount of money you offer him today (present value for this annuity due) is