Questions
Her Company purchased 16,000 common shares (20%) of Him Inc. on January 1, Year 4, for...

Her Company purchased 16,000 common shares (20%) of Him Inc. on January 1, Year 4, for $272,000. Additional information on Him for the three years ending December 31, Year 6, is as follows:

Year Net Income Dividends
Paid
Market Value
per Share at
December 31
Year 4 $160,000 $120,000 $18
Year 5 180,000 128,000 20
Year 6 192,000 140,000 23

On December 31, Year 6, Her sold its investment in Him for $368,000.

Required:

(a) Compute the balance in the investment account at the end of Year 5, assuming that the investment is classified as

(i) FVTPL

Balance in investment account           $

(ii) Investment in associate

Balance in investment account           $

(iii) FVTOCI

Balance in investment account           $

(b) Calculate how much income will be reported in net income and other comprehensive income in each of Years 4, 5, and 6, and in total for the three years assuming that the investment is classified as (Leave no cells blank - be certain to enter "0" wherever required. Omit $ sign in your response.)

(i) FVTPL

Year 4 Year 5 Year 6 Total
Dividend income $ $ $ $
Unrealized gains
Gain on sale
Net income $ $ $ $
Total OCI

(ii) Investment in associate

Year 4 Year 5 Year 6 Total
Equity income $ $ $ $
Gain on sale
Net income $ $ $ $
Total OCI

(iii) FVTOCI

Year 4 Year 5 Year 6 Total
Dividend income $ $ $ $
Gain on sale
Net income $ $ $ $
Other comprehensive income
Unrealized gain $ $ $
Gain on sale
Total other comprehensive income
Comprehensive income $ $ $ $

In: Accounting

what is the future worth of $811 in year 1 and amounts increasing by $96 per...

what is the future worth of $811 in year 1 and amounts increasing by $96 per year through year 5 at an interest rate of 10% per year?

In: Economics

Two investments (A and B, below) have been proposed to the Capital Investment committee of your...

  1. Two investments (A and B, below) have been proposed to the Capital Investment committee of your organization;
    1. The required rate of return for your company is 15%. What is the NPV for each investment? Assume the initial investments ($150k and $50k) occur at the beginning of the year and all other costs and benefits occur at the end of the year indicated. Ignore inflation.
    1. What is the payback period for each investment?
    1. Which investment would you recommend and why?
    1. Why might you recommend the other investment?

Investment A

Year 1

Year 1

Year 2

Year 3

Year 4

Year 5

Costs:

$150,000

$5,000

$5,000

$5,000

$5,000

$5,000

Benefits:

-

$75,000

$55,000

$35,000

$20,000

$65,000

Investment B

Year 1

Year 1

Year 2

Year 3

Year 4

Year 5

Costs:

$50,000

Benefits:

$30,000

$15,000

$10,000

$10,000

$15,000

  1. Unfortunately, the Capital Investment Committee refused to approve your recommendation (Problem 1) since you did not consider the uncertainty inherent in these types of investments. You pull out your very dog-eared notes from PMAN 635 and repeat your analysis, this time using Crystal Ball and the following information:

Investment A:

  1. Year 0 Investment cost: Triangular distribution (optimistic: $125,000; most likely: $150,000; pessimistic: $200,000)
  2. Year 1-5 operating cost: Normal distribution (mean of $5,000, standard deviation of $500)
  3. Year 1 Benefits: Normal distribution (mean of $75,000, standard deviation of $20,000)
  4. Year 2 Benefits: Normal distribution (mean of $55,000, standard deviation of $15,000)
  5. Year 3 Benefits: Normal distribution (mean of $35,000, standard deviation of $10,000)
  6. Year 4 Benefits: Normal distribution (mean of $20,000, standard deviation of $5000)
  7. Year 5 Benefits: Uniform distribution (Minimum: $60,000; Maximum: $120,000)

Investment B:

    1. Year 0 Investment cost: Uniform distribution (Minimum: $40,000; Maximum: $60,000)
    2. Year 1 Benefits: Normal distribution (mean of $30,000, standard deviation of $3,000)
    3. Year 2 Benefits: Normal distribution (mean of $15,000, standard deviation of $5,000)
    4. Year 3 Benefits: Normal distribution (mean of $10,000, standard deviation of $3,000)
    5. Year 4 Benefits: Normal distribution (mean of $10,000, standard deviation of $3,000)
    6. Year 5 Benefits: Normal Distribution (mean of $15,000, standard deviation of $5000).
  1. If the IRR is still 15%, use Crystal Ball to calculate the median NPV for each investment. Would you still prefer the same investment you recommended in question 1.c?
  1. What is the probability that Investment B will be better than Investment A (financially)?

Be sure to show all work

In: Finance

I need assistance on this problem in Pseudocode and in C++ Program Program 3: Give a...

I need assistance on this problem in Pseudocode and in C++ Program

Program 3: Give a baby $5,000! Did you know that, over the last century, the stock market has returned an average of 10%? You may not care, but you’d better pay attention to this one. If you were to give a newborn baby $5000, put that money in the stock market and NOT add any additional money per year, that money would grow to over $2.9 million by the time that baby is ready for retirement (67 years)! Don’t believe us? Check out the compound interest calculator from MoneyChimp and plug in the numbers!

To keep things simple, we’ll calculate interest in a simple way. You take the original amount (called the principle) and add back in a percentage rate of growth (called the interest rate) at the end of the year. For example, if we had $1,000 as our principle and had a 10% rate of growth, the next year we would have $1,100. The year after that, we would have $1,210 (or $1,100 plus 10% of $1,100). However, we usually add in additional money each year which, for simplicity, is included before calculating the interest.

Your task is to design (pseudocode) and implement (source) for a program that 1) reads in the principle, additional annual money, years to grow, and interest rate from the user, and 2) print out how much money they have each year. Task 3: think about when you earn the most money!

Lesson learned: whether it’s your code or your money, save early and save often…

Sample run 1:

Enter the principle: 2000

Enter the annual addition: 300

Enter the number of years to grow: 10

Enter the interest rate as a percentage: 10

Year 0: $2000

Year 1: $2530

Year 2: $3113

Year 3: $3754.3

Year 4: $4459.73

Year 5: $5235.7

Year 6: $6089.27

Year 7: $7028.2

Year 8: $8061.02

Year 9: $9197.12

Year 10: $10446.8

Sample run 2 (yeah, that’s $9.4MM):

Enter the principle: 5000

Enter the annual addition: 1000

Enter the number of years to grow: 67

Enter the interest rate as a percentage: 10

Year 0: $5000

Year 1: $6600

Year 2: $8360

Year 3: $10296

Year 4: $12425.6

Year 5: $14768.2 . .

Year 59: $4.41782e+06

Year 60: $4.86071e+06

Year 61: $5.34788e+06

Year 62: $5.88376e+06

Year 63: $6.47324e+06

Year 64: $7.12167e+06

Year 65: $7.83493e+06

Year 66: $8.61952e+06

Year 67: $9.48258e+06

This assignment is about Repetition Structures.

For Pseudocode, here are key words to use

: · DO … WHILE – A loop that will always run at least once ·

FOR … ENDFOR – A loop that runs until certain criteria is met ·

WHILE … ENDWHILE – A loop that runs only while certain criteria is met ·

FOREACH … ENDFOREACH – A loop that runs over elements in a data structure · BREAK - "break out" of the current loop (or other structure) you're in and start immediately after the loop · CONTINUE - skip over the current iteration of the loop and move on to the next one

In: Computer Science

The annual maintenance and operating (M&O) cost was estimated to be $2,500 in Year 1 through...

The annual maintenance and operating (M&O) cost was estimated to be $2,500 in Year 1 through Year 4, and $4,400 in Year 5 through Year 9. Estimate the future value of the M&O cost (at t=9) with an interest rate of 11% per year.

In: Finance

Determine the payback period using the accumulated and average cash flows approaches.

Baird Company has an opportunity to purchase a forklift to use in its heavy equipment rental business. The forklift would be leased on an annual basis during its first two years of operation. Thereafter, it would be leased to the general public on demand. Baird would sell it at the end of the fifth year of its useful life. The expected cash inflows and outflows follow:

 

Year Nature of Item Cash Inflow   Cash Outflow
Year 1 Purchase price         $ 79,800  
Year 1 Revenue $ 31,000          
Year 2 Revenue   31,000          
Year 3 Revenue   26,000          
Year 3 Major overhaul           8,200  
Year 4 Revenue   17,000          
Year 5 Revenue   15,000          
Year 5 Salvage value   7,000          

 

Required

  1. a.&b. Determine the payback period using the accumulated and average cash flows approaches. (Round your answers to 1 decimal place.)

 

 

 

In: Accounting

Greg is saving to go on a trip to Australia five years from today. He has determined that she will need to have $13,000 saved to take the trip.

Greg is saving to go on a trip to Australia five years from today. He has determined that she will need to have $13,000 saved to take the trip. 

a) How much will he need to invest today in order to have $13,000 in five years? Assume he can earn the following interest rates over the next five years:

First year: 3%, Second year 3.5%, Third year: 4%, Fourth year: 5% and Fifth year: 5%

b) Instead of investing the money today, he has decided to wait two years to invest the money. How much will he need to invest, two years from today, in order to have $13,000 five years from today? First year: 3%, Second year 3.5%, Third year: 4%, Fourth year: 5% and Fifth year: 5%

In: Finance

ou are evaluating a project for your company. You estimate the sales price to be $290...

ou are evaluating a project for your company. You estimate the sales price to be $290 per unit and sales volume to be 3,900 units in year 1; 4,900 units in year 2; and 3,400 units in year 3. The project has a three-year life. Variable costs amount to $140 per unit and fixed costs are $195,000 per year. The project requires an initial investment of $228,000 in assets which will be depreciated straight-line to zero over the three-year project life. The actual market value of these assets at the end of year 3 is expected to be $39,000. NWC requirements at the beginning of each year will be approximately 14 percent of the projected sales during the coming year. The tax rate is 21 percent and the required return on the project is 8 percent. What is the operating cash flow for the project in year 2?

  • $442,560

  • $464,000

  • $474,480

  • $366,560

In: Finance

Capital Investment Appraisal Techniques X construction is considering two projects to develop. The estimated net cash...

Capital Investment Appraisal Techniques X construction is considering two projects to develop. The estimated net cash flow from each project is as follows: Project X Project Y Year 1 110,000 75,000 Year 2 65,000 150,000 Year 3 100,000 60,000 Year 4 115,000 55,000 Year 5 35,000 60,000 Project requires an investment of $200,000. A rate of 15% has been selected for the NPV analysis. Requires to

a) Calculate Payback period, ARR, Net Present Value and Profitability Index

b) Which Project is to be recommended to develop based on NPV, Profitability Index, Payback period and ARR? Suggest

Project X

Project Y

Year 1

110,000

75,000

Year 2

65,000

150,000

Year 3

100,000

60,000

Year 4

115,000

55,000

Year 5

35,000

60,000

In: Finance

You are evaluating a project for your company. You estimate the sales price to be $200...

You are evaluating a project for your company. You estimate the sales price to be $200 per unit and sales volume to be 3,000 units in year 1; 4,000 units in year 2; and 2,500 units in year 3. The project has a three-year life. Variable costs amount to $50 per unit and fixed costs are $150,000 per year. The project requires an initial investment of $200,000 in assets which will be depreciated straight-line to zero over the three-year project life. The actual market value of these assets at the end of year 3 is expected to be $30,000. NWC requirements at the beginning of each year will be approximately 10 percent of the projected sales during the coming year. The tax rate is 34 percent and the required return on the project is 10 percent. What is the operating cash flow for the project in year 2?

In: Finance