1. Becca needs to borrow $143,000 to purchase a new home.  The bank has given her two options; the first is a 20 year loan at 4.35% or the second is a 30 year loan at 4.95%.
   1. How much is the payment for each of these loans?

20-year payment______________    30-year payment ______________

2. What is the total cost of each mortgage?

20-year total cost______________   30-year total cost ______________

3. How much will Becca save if she chooses the 20 year loan? _______________

Machine A costs $850,000 and would produce cash flows of $220,000 per year for the first two years, $350,000 per year for the next two years, and $150,000 in the final year. Machine B costs $650,000 and would produce cash flows of $250,000 per year for the first two years, $200,000 the following year, $150,000 in its fourth year, and $140,000 in its final year. Your required return is 11%. What is the IRR of buying machine B?

company plans to invest in new equipment to improve productivity. The planned investment is $500,000 now and $100,000 in year 1. The gross income for year 1 is $175,000, year 2 is $300,000, and year 3 is $600,000. Taxes related to the investment are $50,000 in year 1, $75,000 in year 2 and $100,000 in year 3.

solve for: The before tax rate of return for the investment, The after-tax rate of return for the investment and How does the after-tax rate of return compare to the company’s MARR of 15%?

Dawn and Mildred had the same starting sum of $120,000. Each made withdrawals of $24,000 a year. In years 2, 3, and 4, each had returns of 9% a year. Dawn had a 50% drop in year 1 and a 50% gain in year 5, while Mildred had a 50% gain in year 1 and a 50% drop in year 5.

A) Calculate the remaining sum for each woman at the end of year 5.

B) Explain why there is such a big difference in the remaining amounts.

Cranberry Corporation has $3,444,000 of current year taxable income. Use Corporate tax rate schedule.

If the current year is a calendar year ending on December 31, 2017, calculate Cranberry's regular income tax liability.

If the current year is a calendar year ending on December 31, 2018, calculate Cranberry’s regular income tax liability.

If the current year is a fiscal year ending on April 30, 2018, calculate Cranberry's regular income tax liability. (Do not round intermediate calculations.)

The Birdstrom Co. just recently paid a dividend of $2.00 per share. Stock market analysts expect that the growth rate for the dividend will be 40% in year 1, 30% in year 2, 20% in year 3, 15% in year 4, and 10% in year five. After the fifth year, the dividend will grow at a constant rate of 6%. If the required return for Birdstrom is 12%, calculate the current stock price and the expected dividend yield and capital gain in the first year if you buy the stock at the computed price

Nippon Steel’s expenses for heating and cooling a large manufacturing facility are expected to increase according to an arithmetic gradient beginning in year 2. If the cost is $550,000 this year (year 0) and will be $550,000 again in year 1, but then it is estimated to increase by $41,000 each year through year 12, what is the equivalent annual worth in years 1 to 12 of these energy costs at an interest rate of 11% per year? The equivalent annual worth is determined to be?

help with excel formulas to answer this question would be great, thanks.

Inventory Valuation and Earnings
Santiago, Inc., began operations as an importer of fine Chilean wine to the United States. Sales and purchase information is provided below.

Santiago, Inc., uses the LIFO method of inventory valuation. The purchase amount for Year 3 has been left blank because the company has not yet decided the total number of units to purchase during the year. (Assume that all sales occur on the last day of the year, after all purchases for the year have been made. The company’s year-end is December 31.)

Required

How many units should be purchased in Year 3 if the firm’s objective is to minimize income taxes for the year?

Answer

Compute the cost of goods sold for Year 3 assuming that the number of units computed in (1) is purchased.

$Answer

How many units should be purchased in Year 3 if the firm’s objective is to maximize reported income for the year?

Answer

Compute the cost of goods sold for Year 3 assuming that the number of units computed in (3) is purchased.

$Answer

1. Managers of CVS Pharmacy are considering a new project. This project would be a new store in Odessa, Texas. They estimate the following expected net cash flows if the project is adopted.

• Year 0: ($1,250,000)
• Year 1: $200,000
• Year 2: $500,000
• Year 3: $400,000
• Year 4: $300,000
• Year 5: $200,000

Suppose that the appropriate discount rate for this project is 6.7%, compounded annually.

Calculate the net present value for this proposed project.

Do not round at intermediate steps in your calculation. Round your answer to the nearest dollar. If the NPV is negative, include a minus sign. Do not type the $ symbol.

2. Managers at Terlingua Drilling identify a potential new drilling project. They estimate the following expected net cash flows if the project is adopted.

• Year 0: ($1,250,000)
• Year 1: $100,000
• Year 2: $400,000
• Year 3: $400,000
• Year 4: $200,000
• Year 5: $200,000
• Year 6: $300,000
• Year 7: $100,000

Suppose that the appropriate discount rate for this project is 12%, compounded annually.

Calculate the net present value for this proposed project.

Do not round at intermediate steps in your calculation. Round your answer to the nearest dollar. If the NPV is negative, include a minus sign. Do not type the $ symbol.