The sales budget for your company in the coming year is based on a quarterly growth rate of 10 percent with the first-quarter sales projection at $165 million. In addition to this basic trend, the seasonal adjustments for the four quarters are 0, −$12, −$6, and $18 million, respectively. Generally, 50 percent of the sales can be collected within the quarter and 45 percent in the following quarter; the rest of the sales are bad debt. The bad debts are written off in the second quarter after the sales are made. The beginning accounts receivable balance is $84 million. Assuming all sales are on credit, compute the cash collections from sales for each quarter. Enter your answers in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and shows all the formula and steps.

1. A company is considering an investment of $4 million in a project that has a seven-year life. The company has estimated its discount rate at 12%. Details of the sales and costs associated with the project are as follows:

Note: The annual overhead includes $200,000 per year depreciation on the asset. It also includes apportioned fixed overhead of a further $50,000 per year.

1. Calculate the net present value of the project. Provide a commentary on the discounting process and on the net present value that you calculated.
2. Carry out a sensitivity analysis on the five variables of this project. Include the life of the project and the discount rate. Identify what you consider the most critical variable and advise management what they should do, if anything, before adopting the new project.
3. Advise the company on whether it should proceed with the project and provide reasons for your advice.

A loan is repaid with payments which start at $400 the first year and increase by $60 per year until a payment of $1240 is made, at which time payments cease. If interest is 5% effective, find the amount of principal in the 6th payment.

A selected Forecast Model showed the lowest MAD at the beginning of the year with $60.5. If the following three quarters reflected the following MAD:

Q2: $60.2 Q3: $75.4 Q4: $78.9
Would you stay using this model for the next year? Explain your answer.

A project requires outflows of $150,000 today and $50,000 in one year. It is then expected to generate 9 annual cash inflows of $72,000 starting at the end of year 5. If the project's cost of capital is 15%, what is this project's NPV? Round to the nearest cent.

Given the original price of a 20-year bond with a par of 1,000 and a 8.0% coupon rate that is paid half-yearly is 923. If the yield of the bond rises 1% from the original, what is the impact on the price of the bond?

A stock has a \beta of 1, and the expected market return this year is 2.93%, and the current risk-free rate is 1.14%. The firm just recently released a dividend for $1.94 per share, and it expects that dividends will continue to grow at the sustainable growth rate for the future. Given that firm equity was $508,500.00 last year, and that the firm had Net Income of $7,876.63 and dividends were $6,222.53. What is the price per share of the stock? (tolerance is 0.1, round to 2 decimals, do not enter $ symbol)

1. The population of a small country is growing 4.5% per year. If in 1997 the population was 140 thousand, determine the exponential expression for population as a function of the year. Letting t=0 correspond to 1997and find the population in 2008.

2. How much should be deposited today if it’s to accumulate to $44,900 in 30 years, if the account bears interest at 7.5% compounded monthly?

3. How long will it take an investment at 11.25% interest, compounded continuously to quadruple?

4. When advertising is discontinued, sales decrease at a rate proportional to sales at that instant. A magazine has an initial circulation of 1.7 million and 2 years later decreases 14%. When will circulation reach 850,000?

1. The market expects inflation to do the following: remain at 1% for the next year and then increase to 2% for the next two years.
   1. What is the inflation premium for a 1-year security?
   2. For a 3-year security?
   3. If the real risk-free rate is 4% and the maturity risk premium is 0, what is the yield on a 1-year Treasury bond?
   4. A 3-year Treasury bond?

Assume that you are considering the purchase of a 30 year bond with an annual coupon rate of 7.50%. The bond has a face value of $1,000 and makes semiannual interest payments. If you require a 5.75% nominal yield to maturity on this investment, what is the maximum price you should be willing to pay for this bond?