You need a particular piece of equipment for your production process. An​ equipment-leasing company has offered to lease the equipment to you for $ 10 comma 500 per year if you sign a guaranteed 5​-year lease​ (the lease is paid at the end of each​ year). The company would also maintain the equipment for you as part of the lease.​ Alternatively, you could buy and maintain the equipment yourself. The cash flows from doing so are listed below​ (the equipment has an economic life of 5 ​years). If your discount rate is 6.7 %​, what should you​ do?

Year 0 = -$40,800

Year 1: -$2100

Year 2: -$2100

Year 3: -$2100

Year 4: -$2100

Year 5: -$2100

a.) The net present value of the leasing alternative is:

b.) The net present value of the buying alternative is:

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.27 million. The fixed asset falls into the three-year MACRS class

. The project is estimated to generate 1.8 million in annual sales, with costs of $692k. The project requires an initial investment in net working capital of 430,000, and the fixed asset will have a market value of 450,000 at the end of the project.

a. If the tax rate is 23%, what is the project's Year 0 net cash flow? Year 1? Year 2? Year 3?

b. If the required return is 10%, What is the project's NPV?

(Future value ) Sales of a new finance book were 12,000 copies this year and were expected to increase by 21 percent per year. What are expected sales during each of the next 3 years?

a. If the 12,000 copies of book sales this year were expected to increase by 21 percent per year, what are the expected sales of the new finance book next year?

Answer: ______copies. (Round to the nearest unit.)

b. If the 12,000 copies of book sales this year were expected to increase by 21 percent per year, what are the expected sales of the new finance book in two years?

Answer: ____copies. (Round to the nearest unit.)

c. If the 12,000 copies of book sales this year were expected to increase by 21 percent per year, what are the expected sales of the new finance book in three years?

Answer: _____copies. (Round to the nearest unit.)

Waylander Coatings Company purchased waterproofing equipment on January 6 for $489,200. The equipment was expected to have a useful life of four years, or 6,800 operating hours, and a residual value of $40,400. The equipment was used for 2,600 hours during Year 1, 2,100 hours in Year 2, 1,200 hours in Year 3, and 900 hours in Year 4.

Required:

1. Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-output method, and (c) the double-declining-balance method. Also determine the total depreciation expense for the four years by each method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.

1. The director of sport marketing of your organization asks for your advice regarding sponsorship deals she is contemplating. She has to choose between the following: (1) a 15-year sponsorship paying $100,000 per year; (2) a 15-year sponsorship initially paying $75,000 per year and increasing 5% each year; and (3) a 15-year sponsorship initially paying $45,000 per year, but increasing 12% each year. Based on this information, address the following:
   1. Determine the value of each year for each proposal, as well as the total value of each proposal. Hint: you should have a table that has 3 columns (one for each proposal) and is 16 rows high (one for each of the 15 years and one at the bottom that is a total of all 15 years).
   2. Which proposal should the marketing director choose and why?

You are considering buying a new​ car, because you think it will save you money. Your think your old car will cost​ $2,200 in gas and maintenance next year​ (Year 1), and you expect that to increase by​ 6% every year until the end of Year 10. A new car will cost you​ $16,500 now​ (Year 0). You think it will cost​ $500 in gas and maintenance next year​ (Year 1), and you expect that to increase by​ 4% every year until the end of Year 10. You need to decide if the new car is worth the investment. Assume an annual interest rate of​ 5% a. What is the equivalent present value of the maintenance costs of the old​ car? b. What is the equivalent present value of the maintenance costs of the new​ car? c. Is the new car worth the​ investment?

IBM (US) needs to raise $100 or an equivalent in foreign currency to fund its operations in New York. It can issue a 3-year maturity Japanese yen bond at par, coupon rate 1% per annum. The current exchange rate is ¥85/$. Alternatively, it can issue the 3-year Eurodollar bond at par, with 3% coupon per year.

You forecast the future exchange rates as follows:
Year 1 - ¥92
Year 2 - ¥98
Year 3 - ¥107

The Bank has quoted the following forward rates for the yen/$ exchange rate:
Year 1 - ¥82
Year 2 - ¥80
Year 3 - ¥77

Assume that the market interest rates are 1% (Japan) and 3% (US) flat for the next three years. Which bond is cheaper for IBN to issue? Covered Bond or Uncovered Bond? Why? Show All Calculations.

Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 60,000 shares of cumulative preferred 3% stock, $20 par and 400,000 shares of $25 par common.

During its first four years of operations, the following amounts were distributed as dividends: first year, $30,000; second year, $74,000; third year, $100,000; fourth year, $120,000.

Determine the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0.00".

Feedback

Is the preferred stock cumulative or non-cumulative stock? Determine what amoun

15-11 Equity Method for Stock Investment

On January 4, Year 1, Ferguson Company purchased 72,000 shares of Silva Company directly from one of the founders for a price of $48 per share. Silva has 200,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $194,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $647,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva.

a. Provide the Ferguson Company journal entries for the transactions involving its investment in Silva Company during Year 1.

b. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.

$

need answers for all 4 years in all three sections

Depreciation by Three Methods; Partial Years

Perdue Company purchased equipment on April 1 for $77,760. The equipment was expected to have a useful life of three years, or 7,560 operating hours, and a residual value of $2,160. The equipment was used for 1,400 hours during Year 1, 2,600 hours in Year 2, 2,300 hours in Year 3, and 1,260 hours in Year 4.

Required:

Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.