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

• Research the GDP of China and provide figures for the latest year on how much each sector of the GDP (C, I, G and X-M) has contributed to the economy.
• Which sector contributed the most to the GDP? Explain briefly why you think that sector was the highest contributor
• Create a pie chart to show the individual contributions of each sector.

The balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following:

Income before income tax was $186,000, and income taxes were $27,800 for the current year. Cash dividends paid on common stock during the current year totaled $48,477. The common stock was selling for $22 per share at the end of the year.

Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, if required.

The following information was taken from the financial statements of Tolbert Inc. for December 31 of the current fiscal year:

The net income was $848,000 and the declared dividends on the common stock were $67,500 for the current year. The market price of the common stock is $20.40 per share.

For the common stock, determine (a) the earnings per share, (b) the price-earnings ratio, (c) the dividends per share, and (d) the dividend yield. If required, round your answers to two decimal places.

The following information relates to the Ashanti Group of Companies for the year to 30 April 2020.

Additional Information:

Ashanti Ltd purchased 70% of the issued share capital of Bochem Ltd in 2000. At that time, the retained profits of Bochem amounted to $896,000.

Ashant Ltd purchased 60% of the issued share capital of Ceram Ltd in 2004. At that time, the retained profits of Ceram Ltd amounted to $320,000.

Sales from Ashanti to Bochem Ltd were $ 3 million during the post-acquisition period. Ashanti marks up all sales by 20%. At the reporting date this entire inventory remained in Bochem’s warehouse.

REQUIRED:

In so far as the information permits, prepare Fab Group of Companies’ Consolidated Income Statement for the year ended 30 April 2020 in accordance with IFRSs.   

A magazine collects data each year on the price of a hamburger in a certain fast food restaurant in various countries around the world. The price of this hamburger for a sample of restaurants in Europe in January resulted in the following hamburger prices (after conversion to U.S. dollars). 5.18 4.99 4.06 4.68 5.25 4.66 4.12 4.98 5.19 5.59 5.33 4.60 The mean price of this hamburger in the U.S. in January was $4.61. For purposes of this exercise, assume it is reasonable to regard the sample as representative of these European restaurants. Does the sample provide convincing evidence that the mean January price of this hamburger in Europe is greater than the reported U.S. price? Test the relevant hypotheses using α = 0.05. (Use a statistical computer package to calculate the P-value. Round your test statistic to two decimal places and your P-value to three decimal places.)

t =

P-value =

At the end of the current year, Accounts Receivable has a balance of $969,540 Allowance for Doubtful Accounts has a credit balance of $5,287 and sales for the year total $2,224,000. Bad debt expense is estimated at ½ of 1% of sales.

a. Determine the amount of the adjusting entry for bad debt expense.
$

b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.

c. Determine the net realizable value of accounts receivable.
$

Suppose a firm is expected to increase dividends by 10% in one year and by 15% in year two. After that, dividends will increase at a rate of 7% per year indefinitely. If the last dividend was $2 and the required return is 12%, what is the price of the stock?

Winston Company estimates that the factory overhead for the following year will be $831,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 27,700 hours. The total machine hours for the year were 55,000 hours. The actual factory overhead for the year was $1,673,000. Enter the amount as a positive number.

a. Determine the total factory overhead amount applied. Round to the nearest dollar.
$

b. Compute the over- or underapplied amount for the year.
$  

c.   Journalize the entry to transfer the over- or underapplied factory overhead to cost of goods sold. If an amount box does not require an entry, leave it blank.