Contrasting the widespread foreclosures and bursting of the real estate bubble before the Great Recession ten or twelve years ago, conditions in 2020 suggest that:

Group of answer choices

the market is less exposed now, with lower housing inventories, tighter credit standards and families demanding more suburban homes in light of Covid.

an even worse collapse in suburban real estate values is possible now, than occurred in the Great Recession.

residential values across small towns and suburbs in the US are now moving lower, and a "new" real estate crisis may already be underway.

housing starts and inventories are at all-time highs, and a dramatic fall in single family home prices is expected.

​

​OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship will cost

$ 500$500

​million, and will operate for

2020

years. OpenSeas expects annual cash flows from operating the ship to be

$ 70.0$70.0

million and its cost of capital is

12.0 %12.0%.

a. Prepare an NPV profile of the purchase.

b. Identify the IRR on the graph.

c. Should OpenSeas proceed with the​ purchase?

d. How far off could​ OpenSeas' cost of capital estimate be before your purchase decision would​ change?

a. Prepare an NPV profile of the purchase.

To plot the NPV profile we compute the NPV of the project for various discount rates and plot the curve.

The NPV for a discount rate of

2.0 %2.0%

is

​$nothing

million. ​

The management of HHH Corp. is attempting to evaluate financial performance of its divisions. For 2020, Division A reported a net operating profit before taxes of $50,000,000, a net income of $21,000,000, total assets of $180,000,000, and total liabilities of $100,000,000 including current liabilities of $25,000,000. HHH’s required rate of return is 12%, which is its weighted-average cost of capital. Assume an income tax rate of 40%.

1. Compute Division A’s return on investment, residual income, and economic value added. Show your work. (9 points)

2. Residual income is often preferred over return on investment as a performance evaluation measure. Explain the reason using a hypothetical scenario. (11 points)

SUPPLEMENTAL PROBLEM 19-2

Meyer reported the following pretax financial income (loss) for the years 2019-2022:

Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate is 21% for all years.

REQUIRED:

1. Prepare journal entries for 2021 and 2022 to record the current portion and the deferred portion of income taxes, assuming that based on the weight of available evidence, it is more likely than not that one-fifth of the benefits of the loss carryforward will not be realized.
2. Prepare the income tax section of the 2021 income statement beginning with the line “Income (loss before income taxes.”

Assume the Ricardian model where the marginal product of labor in the home country is 3 in the cheese industry and 2 in the wine industry. The home country has 10 workers. The relative price of wine (Pw/Pc) is 2 after trade. After trade the home country consumes 12 units of wine. Use this information to calculate

a. The relative price of wine before trade

b.The slope of the production possibilities frontier, where wine is on the horizontal axis and cheese on the vertical axis.

c.The good that the home country export and how much

d.  Bonus. Home country's cheese consumption after trade

1. You own a bond that matures in 5 years, has annual coupons of 8%, and
whose par value is $100.
a. Calculate the duration of the bond if the YTM of the bond is 5%.
b. If there has been no change in the YTM of the bond, what is the duration of the bond after the fi4st interest payment is made when 4 years remain till maturity?
c. Several days after the interest was paid, the YTM of the bond fell from 5%
to 3%. Calculate the price change in percentage by calculating the price
before and after the change, as well as using the duration calculated in
question b.

The Talley Corporation had a taxable income of $300,000 from operations after all operating costs but before (1) interest charges of $30,000, (2) dividends received of $15,000, (3) dividends paid of $24,000, and (4) income taxes.

What are the firm's income tax liability and its after-tax income? Round your answers to two decimal places.

What are the company's marginal and average tax rates on taxable income? Round your answers to two decimal places.

A company has the following data:

• Revenue (Price x Quantity) = $750,000

• Variable cost per unit = $65

• Units sold (Quantity) = 5,000

• Total costs = $625,000

• The company has no semi-variable costs

The company will open a new branch that will increase its fixed costs by $125,000.

Determine the following:

a) Price of each unit.

b) Total variable cost.

c) Total fixed costs before the new branch.

d) Total fixed costs after the new branch.

e) Total costs after the new branch. f) Breakeven quantity after the new branch.

Mahmut with mass 70.0 kg and Güllü with mass 45.0 kg are skating. While Mahmut stands at rest, He is struck by Güllü. She is moving at 15.0 m/s before she collides with him. Güllü has a velocity of magnitude 10.00 m/s at an angle of 55.0 ∘ from her initial direction after the collision. Both skaters move on the frictionless and horizontal surface .

a)Find the magnitude of Mahmut's velocity after the collision?

b)Find the direction of Mahmut's velocity after the collision?

c)Find the change in total kinetic energy of the two skaters as a result of the collision?