Sandpiper Company has 15,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of $15 par common stock. The following amounts were distributed as dividends: Year 1 $37,500 Year 2 12,000 Year 3 45,000 Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'. Year 1 Year 2 Year 3 Preferred stock (Dividends per share) $ $ $ Common stock (Dividends per share) $ $ $

A few years ago, you got married and bought a house with an adjustable rate mortgage with the

following terms:

Loan: $240,000

Term: 20 years

Initial Rate: 4%

Margin: 2% over the Index Rate

Lifetime Max: 4.5%

The index rate was 2% in year 1, 1.5% in year 2, 4% in year 3, 1% in year 4, and 1% in year 5.

a) What is your loan balance at year 5? (5pts)

b) What is the effective interest rate is paid off after year 5 (10 pts)?

A few years ago, you got married and bought a house with an adjustable rate mortgage with the following terms: Loan: $240,000 Term: 20 years Initial Rate: 4% Margin: 2% over the Index Rate Lifetime Max: 4.5% The index rate was 2% in year 1, 1.5% in year 2, 4% in year 3, 1% in year 4, and 1% in year 5. a) What is your loan balance at year 5? (5pts) b) What is the effective interest rate is paid off after year 5 (10 pts)?

A hospital is considering the purchase of a piece of medical equipment that costs $1,500,000 and has a useful life of five years and no salvage value at the end of its useful life. The equipment generates revenues of $650,000 per year and operating expenses of $300,000. Calculate NPV, payback, BCR, and IRR, should the equipment be purchased if the discount rate is 6% or 10%?

           Revenue   Expense

   Year 0       -      $1,500,000 (investment)

   Year 1       $650,000   $300,000

   Year 2       $650,000   $300,000

   Year 3       $650,000   $300,000

   Year 4       $650,000   $300,000

   Year 5       $650,000   $300,000

Draw the cash flow diagram for the following data.
A company purchases a machine to make widgets for $10,000. the collect payment for their widgets at the end of the year in which they are delivered. At the end of 5 years the machine must be scrapped at which time its value is $0. The following is the net revenue generated by the widget machine.
Year 1 - $2,500
Year 2 - $3,500
Year 3 - $2,250
Year 4 - $3,000
Year 5 - $2,000

What is the present worth of the widget machine if the companies TVOM is 5.37%? $  
What is the future worth at the end of the 5 year life cycle? $

A construction company plans to invest in new equipment to improve their 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.

Determine:

a) The before tax rate of return for the investment

b) The after-tax rate of return for the investment

c) How does the after-tax rate of return compare to the company’s MARR of 15%?

Please do not use excel

Assume you are evaluating a lease with annual payments of $530,000 per year under a 5 year lease. The after-tax cost of debt is 6% and the tax rate is 40%. Rather than occurring at the end of each year, you have realized that tax payments actually occur evenly throughout the year. Using the mid-year approximation, by how much (in present value terms) are you underestimating the tax benefits from the lease by assuming end of year rather than mid-year tax payments? Please show all work in excel.