Firm AAA's earnings and dividends are expected to grow by a rate of 0.04 a year. This growth will stop after year 4. In year 5 and later, it will pay out all earnings as dividends. Assume next year's dividend is 2, the cost of capital is 0.08, and next year's EPS is 12. What is AAA's stock price today? Round your answer to 2 decimal places.

In 2008, a project requires an initial cost of -$250 and next year, in 2009, the investor receives $570 and the year after that, in 2010, the cash flows from the investment is -$120. What is the total number of IRRs in this project?

What is the NPV of a project if IRR < discount rate (Assuming that the first cash flow is negative and all of the cash flows from the project are positive)?

Which of the following method must be preferred if the number changes in the signs of future cash flows within the project’s economic life is more than one?

B is single and reports the following items of income and deductions for the current year:
Salary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
Net long-term capital gain on sale of investment property. . . . . . . . 200,000
Medical expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,500
Casualty loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500
State and local income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Charitable contributions (all cash). . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Interest on home mortgage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
Interest on investment loans (unimproved real property) . . . . . . . . . 10,000
B made the election to treat $10,000 of the net long-term capital gain as investment income. The only additional transaction during the year was the exercise of an incentive stock option of her employer’s stock at an option price of $12,000 when the stock was worth $100,000. Compute B’s tax liability and AMT, if any.

The number of times that students go to the movies per year has mean is a normal distribution with a mean of 17 with standard deviation of 8. What is the probability that for a group of 10 students, the mean number of times they go to the movies each year is between 14 and 18 times? (round your answer to the nearest hundredth)

***ANSWER IS NOT .2

Andy borrows funds of $ 1000 with an interest rate of 12% per year with an repayment period of 8 years and is repaid using the amortization method.

a) After paying installments at the end of year 4, A intends to pay them off. How much money must be paid for the repayment?

b) If after paying installments at the end of year 4, Andy requests that he be given an additional payment period of 6 years. i.e. the borrowing party requests an additional loan interest of 13% per year. How much installments per year do andy have to pay now?

Alex is going to work for a company for 1 year. The estimated cost of lunch for Alex is about $250 per month. The company has two options for his lunches:

Option 1) Company has a restaurant and Alex can use the restaurant by a provided card from company with no cost on Alex (Lunch is on company).

Option 2) Company will pay Alex $120 monthly and $1500 at the beginning of the year and then lunch will be on Alex.

If the interest rate is 8%, which option is more beneficial for Alex?

What is the NPV of this project? (in 000s)

Bogle is considering a two-year project to manufacture microchips. Bogle purchases equipment for $750K. This two-year project will require additional inventory of $125K and accounts payable of $150K, which reverse at the end of the project. Bogle’s tax rate is 50%, and its cost of capital is 12%.

Bogle estimates incremental revenue of $600K in years 1 and 2, and operating expenses equal to 15% of revenues. The machine is depreciated straight-line (i.e., 50% in year 1 and 50% in year 2).

What is the NPV of this project? (in 000s)

A company incurred the following costs in year 1 to fulfill a contract that is expected to take two years to complete:

• Equipment required to complete the contract: $150,000
• Salaries and wages incurred to satisfy contract requirements: $300,000
• Supplies and materials directly used: $20,000
• Allocation of supervisory salaries: $15,000
• Allocation of general administrative costs: $35,000

Other information:

The equipment was acquired for the contract, but will have other use to the company when the contract is complete. It is expected to have a ten-year useful life with no residual value. The revenue from the contract will be recorded at the end of two years, when control transfers (i.e., point in time).

How will the above costs be accounted for in year 1? Does the answer change if period of time criteria is met?

Bay City uses the purchases method to account for supplies. At the beginning of the year the City had no supplies on hand. During the year the City purchased $600,000 of supplies for use by activities accounted for in the General Fund. The City used $400,000 of those supplies during the year. Assuming that the city maintains its books and records in a manner that facilitates the preparation of its fund financial statements, at fiscal year-end the appropriate account balances related to supplies expenditures and supplies inventory would be?

In Netherland: nominal GDP in the recent year was 7% and the growth rate of real GDP was 5%. What is this mean in Macroeconomics? Please Explain.