In Java:

Problem 1.

Write a program that performs the following two tasks:

1. Reads an arithmetic expression in an infix form, stores it in a queue (infix queue) and converts it to a postfix form (saved in a postfix queue).

2. Evaluates the postfix expression.

Use the algorithms described in class/ lecture notes. Use linked lists to implement the Queue and Stack ADTs. Using Java built-in classes will result in 0 points. You must use your own Stack and Queue classes (my code is a good starting point). Submit the code + example runs to validate your code. Submit UML chart to show the program design.

Problem 2.

Given the following postorder and inorder traversals of a binary tree, draw the tree:

Postorder: A B C D E F I K J G H

Inorder: C B A E D F H I G K J

Explain your answer in a systematic and recursive fashion.

___ 1. Lester Company has a single product. The

selling price is $50 and the variable cost is $30 per

unit. The company’s fixed expenses are $200,000 per

month. What is the company’s unit contribution mar-

gin? a) $50; b) $30; c) $20; d) $80.

___ 2. Refer to the data for Lester Company in

question 1 above. What is the company’s contribution

margin ratio? a) 0.60; b) 0.40; c) 1.67; d) 20.00.

___ 3. Refer to the data for Lester Company in

question 1 above. What is the company’s break-even

in sales dollars? a) $500,000; b) $33,333; c) $200,000;

d) $400,000.

___ 4. Refer to the data for Lester Company in

question 1 above. How many units would the company

have to sell to attain target profits of $50,000? a)

10,000; b) 12,500; c) 15,000; d) 13,333.

___ 5. The following figures are taken from Park-

er Company’s income statement: Net income, $30,000;

Fixed costs, $90,000; Sales, $200,000; and CM ratio,

60%. The company’s margin of safety in dollars is: a)

$150,000; b) $30,000; c) $50,000; d) $80,000.

___ 6. Refer to the data in question for Parker

Company in 5 above. The margin of safety in percen-

tage form is: a) 60%; b) 75%; c) 40%; d) 25%.

___ 7. Refer to the data for Parker Company in

question 5 above. What is the company’s total contri-

bution margin? a) $110,000; b) $120,000; c) $170,000;

d) $200,000.

___ 8. Refer to the data for Parker Company in

question 5 above. What is the company’s degree of

operating leverage? a) 0.25; b) 0.60; c) 1.25; d) 4.00.

___ 9. If sales increase from $400,000 to

$450,000, and if the degree of operating leverage is 6,

net income should increase by: a) 12.5%; b) 75%; c)

67%; d) 50%.

___ 10. In multiple product firms, a shift in the

sales mix from less profitable products to more profit-

able products will cause the company’s break-even

point to: a) increase; b) decrease; c) there will be no

change in the break-even point; d) none of these.

Your company, VZ, is evaluating the proposal of replacing one of its old cell phone towers with one with built-in new technology and GPS supporting system. The old tower has a book value of $600,000 and a remaining useful life of 5 years. The firm does not expect to realize any return from scrapping the old tower in 5 years, but it can be sold today to another wireless provider today for $265,000. The old system is being depreciated toward a zero salvage value by $120,000 using straight line method. The new system has a purchase price of $1,175,000, an estimated useful life and MACRS class life of five years, and an estimated market value of $145,000 at the end of five years. The new towers is expected to allow VZ obtain additional customers to increase its revenue by $230,000 per year and also reduce cost due to maintenance, compensating customers for dropped calls which save an additional $25,000 annually. Verizon’s marginal tax rate is 36%.

1. What is the investment outlay of the system for capital budgeting purposes?

2. Calculate the annual depreciation allowances for both machines, and compute the change in the annual depreciation expense if the replacement is made.

3. What are the incremental operating cash flows in Year 1 through 5?

4. What is the terminal cash flow in Year 5?

5. If the project’s required rate of return is 12%, should the project be pursued? What if the required rate of return is 18%? What if the required rate of return is 8%?

6. In general, how would each of the following factors affect the investment decision and how should each be treated?

   1. The expected life of the existing machine decreases?

   2. The required rate of return is not constant but is increasing as VZ adds more projects into its capital budget?

CHAPTER CASE

Bullock Gold Mining

Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan Dority, the company’s geologist, has just finished his analysis of the mine site. He has estimated that the mine would be productive for eight years, after which the gold would be completely mined. Dan has taken an estimate of the gold deposits to Alma Garrett, the company’s financial officer. Alma has been asked by Seth to perform an analysis of the new mine and present her recommendation on whether the company should open the new mine.

Alma has used the estimates provided by Dan to determine the revenues that could be expected from the mine. She also has projected the expense of opening the mine and the annual operating expenses. If the company opens the mine, it will cost $625 million today, and it will have a cash outflow of $90 million nine years from today in costs associated with closing the mine and reclaiming the area surrounding it. The expected cash flows each year from the mine are shown in the nearby table. Bullock Gold Mining has a 12 percent required return on all of its gold mines.

QUESTIONS

1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present value of the proposed mine.

2. Based on your analysis, should the company open the mine?

3. Bonus question: Most spreadsheets do not have a built-in formula to calculate the payback period. Write a VBA script that calculates the payback period for a project.

Bullock Gold Mining Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan Dority, the company’s geologist, has just finished his analysis of the mine site. He has estimated that the mine would be productive for eight years, after which the gold would be completely mined. Dan has taken an estimate of the gold deposits to Alma Garrett, the company’s financial officer. Alma has been asked by Seth to perform an analysis of the new mine and present her recommendation on whether the company should open the new mine. Year Cash Flow 0 −$625,000,000 1 70,000,000 2 129,000,000 3 183,000,000 4 235,000,000 5 210,000,000 6 164,000,000 7 108,000,000 8 86,000,000 9 − 90,000,000 Alma has used the estimates provided by Dan to determine the revenues that could be expected from the mine. She also has projected the expense of opening the mine and the annual operating expenses. If the company opens the mine, it will cost $625 million today, and it will have a cash outflow of $90 million nine years from today in costs associated with closing the mine and reclaiming the area surrounding it. The expected cash flows each year from the mine are shown in the nearby table. Bullock Gold Mining has a 12 percent required return on all of its gold mines. QUESTIONS Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present value of the proposed mine. Based on your analysis, should the company open the mine? Bonus question: Most spreadsheets do not have a built-in formula to calculate the payback period. Write a VBA script that calculates the payback period for a project

William's Investment $2,100 in machinery, which has a useful life of 3 years and will be depreciated according to a straight-line depreciation method towards a salvage value of $0. At the end of its useful life, the equipment will be sold for $100. Aside from the machinery, the project requires an initial investment of $1,000 in net working capital, half of which will be recovered at the end of the project’s life. To assess the impact of the new project, the company conducted a feasibility study one year ago. The study cost $50. According to the study, the new project will decrease after-tax income from existing products by $100 per year, starting in year 1. Finally, your accountant, who has been working with the company for 5 years, pointed out that if the project is not accepted, the company could rent out its facilities for $150 per year, starting in year 1. The accountant’s salary is $100 per year and will increase to $110 if the project is accepted because she will have to work overtime on the new project. Project payoffs occur at the end of the year, the discount rate is 15%, and the tax rate is 30%. Other details for the project are provided below:

i) Compute the NPV of the project in two different ways: 1) using the built-in Excel function and 2) by discounting the cashflows

ii) Compute the PI of the project

iii) Compute the IRR of the project and write down the NPV equation that is solved by the IRR

iv) Using the IRR as the discount rate, re-calculate the NPV of the project using the buil-in Excel function. What is the NPV of the project if the IRR is used as the discount rate?

v) Can we use the IRR to assess the profitability of this project? Why?

vi) Should the project be accepted?

SYSCO and Fernando Foods (SFF) has hired you as an accounting/finance intern for the summer. The company is a top competitor in the industry and have perform extremely well over the past several years.    Consequently, SFF has built a rather large investment portfolio of debt and equity securities. You have been asked to review the drafted balance sheet on t December 31, 2018. You discovered that the cost of the total portfolio is greater than its fair value.    Individually, however, some securities have increase in value while others have decreased.    

Harold Love, CFO of SFF indicates that those securities have increased in value should be classified as trading securities.   Alternative, he wants to classify the securities that have decreased in value as long-term available-for-sale securities.

Your immediate supervisor, Phyllis Baker, says that classifying all the securities as long-term available-for-sale securities is the correct approach.   Baker’s argument is that any kind of gain or loss on investments s to uncertain and that income should NOT be affected by something the company cannot control

You are asked to express your opinion/recommendation as to how the portfolio should be reported on the balance sheet.     Both Love and Baker agree that since you are up-to-date on the latest accounting rules, you are the best person to resolve their conflict.

Write a letter addressed to both individuals, Harold Love and Phyllis Baker.   Your letter should recommend the proper approach for reporting the portfolio on the balance sheet.

From an ethical standpoint, you should also express what is good and what is not good about the argument of both parties.

From an accounting standpoint, you should express what I good and what is not good about the argument of both parties.

CHAPTER CASE

Bullock Gold Mining

Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan Dority, the company’s geologist, has just finished his analysis of the mine site. He has estimated that the mine would be productive for eight years, after which the gold would be completely mined. Dan has taken an estimate of the gold deposits to Alma Garrett, the company’s financial officer. Alma has been asked by Seth to perform an analysis of the new mine and present her recommendation on whether the company should open the new mine.

Alma has used the estimates provided by Dan to determine the revenues that could be expected from the mine. She also has projected the expense of opening the mine and the annual operating expenses. If the company opens the mine, it will cost $625 million today, and it will have a cash outflow of $90 million nine years from today in costs associated with closing the mine and reclaiming the area surrounding it. The expected cash flows each year from the mine are shown in the nearby table. Bullock Gold Mining has a 12 percent required return on all of its gold mines.

QUESTIONS

1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present value of the proposed mine.

2. Based on your analysis, should the company open the mine?

3. Bonus question: Most spreadsheets do not have a built-in formula to calculate the payback period. Write a VBA script that calculates the payback period for a project.

Landcruisers Plus​ (LP) has operated an online retail store selling​ off-road truck parts. As the name​ implies, the firm specializes in parts for the venerable Toyota FJ40 that is known throughout the world for its durability and offroad prowess. The fact that Toyota stopped building and exporting the FJ40 to the U.S. market in 1982 meant that FJ40 owners depended more and more on​ re-manufactured parts to keep their beloved​ off-road vehicles running. More and more FJ40 owners are replacing the original inline​ six-cylinder engines with a modern​ American-built engine. The engine replacement requires mating the new engine with the Toyota drive train. ​LP's owners had been offering engine adaptor kits for some time but have recently decided to begin building their own units. To make the adaptor kits the firm would need to invest in a variety of machine tools costing a total of ​$550,000. ​LP's management estimates that they will be able to borrow ​$300,000 from the​ firm's bank and pay 8 percent interest. The remaining funds would have to be supplied by​ LP's owners. The firm estimates that they will be able to sell​ 1,000 units a year for ​$1 comma 300 each. The units would cost ​$1,000 each in cash expenses to produce​ (this does not include depreciation expense of ​$55,000 per year or interest expense of ​$24,000​). After all​ expenses, the firm expects earnings before interest and taxes of ​$245,000. The firm pays taxes equal to 31 ​percent, which results in net income of ​$145,050 per year over the 10​-year expected life of the equipment.

a.) If the​ firm's required rate of return for its investments is 13 percent and the investment has a 10​-year expected​ life, what is the anticipated NPV of the​ investment?

BULLOCK GOLD MINING

Seth Bullock, the owner of Bullock Gold Mining, is evaluating a new gold mine in South Dakota. Dan Dority, the company’s geologist, has just finished his analysis of the mine site. He has estimated that the mine would be productive for eight years, after which the gold would be completely mined. Dan has taken an estimate of the gold deposits to Alma Garrett, the company’s financial officer. Alma has been asked by Seth to perform an analysis of the new mine and present her recommendation on whether the company should open the new mine.

Alma has used the estimates provided by Dan to determine the revenues that could be expected from the mine. She has also projected the expense of opening the mine and the annual operating expenses. If the company opens the mine, it will cost $635 million today, and it will have a cash outflow of $45 million nine years from today in costs associated with closing the mine and reclaiming the area surrounding it. The expected cash flows each year from the mine are shown in the table. Bullock Mining has a required return of 12 percent on all of its gold mines.

QUESTIONS

1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified internal rate of return, and net present value of the proposed mine.

2. Based on your analysis, should the company open the mine?

3. Bonus question: Most spreadsheets do not have a built-in formula to calculate the payback period. Write a VBA script that calculates the payback period for a project.