4. Innovation Incorporated had operating income before interest and taxes in 2018 of $350 million. The firm was expected to generate this level of operating income indefinitely. The firm had depreciation expense of $25 million that same year. Capital spending totaled $40 million during 2018. At the end of 2017 and 2018, working capital totaled $90 and $70 million, respectively. The firm’s combined marginal state, local, and federal tax rate was 30% and its debt outstanding had a market value of $0.50 billion. The 10-year Treasury bond rate is 3% and the borrowing rate for companies exhibiting levels of creditworthiness similar to Innovation, Inc. is 8%. The historical risk premium for stocks over the risk-free rate of return is 4.5%. No Growth’s beta was estimated to be 1.2. The firm had 3 million common shares outstanding at the end of 2018. Innovation’s target debt to total capital ratio is 40%.

1. Estimate free cash flow to the firm in 2018.
2. Estimate the firm’s cost of capital.
3. Estimate the value of the firm (i.e., includes the value of equity and debt) at the end of 2018, assuming that it will generate the value of free cash flow estimated in (a) indefinitely.
4. Estimate the value of the equity of the firm at the end of 2018.

Estimate the value per share at the end of 2018.                                                                  

At what pressure does the boiling point of water become 350°C? If oceanic pressure increases by 0.5 atm for every 5 m, to what ocean depth does this pressure correspond? ΔHvap,m for water is 44.03 kJ/mol.

A total of 350 households were survey in an O-D survey. The average trip length 15 minutes, with a standard deviation of 7 minutes. If 30 households were chosen at random, what is the probability they have an average trip length greater than 12 minutes and less than 30 minutes?

A total of 350 households were survey in an O-D survey. The average trip length 15 minutes, with a standard deviation of 7 minutes. If 30 households were chosen at random, what is the probability they have an average trip length greater than 12 minutes and less than 30 minutes?.

1. A simple random sample of size n equals 350 individuals who are currently employed is asked if they work at home at least once per week. Of the 350 employed individuals​ surveyed, 32 responded that they did work at home at least once per week. Construct a​ 99% confidence interval for the population proportion of employed individuals who work at home at least once per week.

QUESTION- what is the lower and upper bound

2. A simple random sample of size n=21 is drawn from a population that is normally distributed. The sample mean is found to be x "overbar" = 51 and the sample standard deviation is found to be equals=10. Construct a 95​% confidence interval about the population mean.

QUESTION- what is the lower and upper bound

3. A simple random sample of size n= 40 is drawn from a population. The sample mean is found to be x "overbar" equals 120.4 and the sample standard deviation is found to be s= 12.8. Construct a​ 99% confidence interval for the population mean.

QUESTION- what is the lower and upper bound

Shadee Corp. expects to sell 600 sun visors in May and 350 in June. Each visor sells for $22. Shadee’s beginning and ending finished goods inventories for May are 65 and 40 units, respectively. Ending finished goods inventory for June will be 55 units.

E8-6 Preparing Raw Materials Purchases and Manufacturing Overhead Budgets [LO 8-3c, e]

Each visor requires a total of $5.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 29 closures on hand on May 1, 20 closures on May 31, and 26 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $1,400 per month, and variable manufacturing overhead is $2.00 per unit produced.

Required:
1. Determine Shadee's budgeted cost of closures purchased for May and June. (Round your answers to 2 decimal places.)



2. Determine Shadee's budget manufacturing overhead for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

Suppose that each visor takes 0.80 direct labor hours to produce and Shadee pays its workers $7 per hour.

Required:
Determine Shadee's budgeted direct labor cost for May and June. (Do not round your intermediate values. Round your answers to 2 decimal places.)

Ferris Industries is planning to replace its old equipment.

The old equipment cost was $350 000 five years ago. The old equipment is fully depreciated.

If the new equipment is purchased, arrangements will be made to sell the old equipment. The old equipment is expected to be sold for only $20 000 on 1 January 2021.

The new equipment will be placed in service on 1 January 2021. The details regarding the proposal are as follows:

• Expected acquisition cost $290 000
• Expected installation costs $20 000
• Expected investment allowance in Year 1:15%
• Estimated useful life: 7 years
• Expected salvage value which can be realised upon its disposal at the end of 7 years: $30 000

Expected increase in sales due to the special production run of the new equipment:

• The selling price per unit is expected to remain at $300.
• The variable cost per unit is expected to be $250.
• Expected increase in annual fixed costs due to the special production run of the new equipment is $62 000.

It is assumed that all cash flows occur at the end of each year.

The taxation depreciation on the equipment would be 25% per annum using the straight-line method.

The company is subject to a 40% tax rate.

The company uses a 12% after-tax discount rate.

Required:

a) Calculate the incremental profit (before tax) for each year due to the expected increase in sales.

A random sample of 350 bolts from machine A contained 35 defective bolts, while an independently chosen, random sample of 250 bolts from machine B contained 17 defective bolts. Let P₁ be the proportion of the population of all bolts from machine A that are defective, and let P₂ be the proportion of the population of all bolts from machine B that are defective. Find a 99% confidence interval for P₁-P₂. Then complete the table below. Carry your intermediate computations to at least three decimal places. Round your responses to at least three decimal places. (If necessary, consult a list of formulas.) What is the lower limit of the 99% confidence interval? What is the upper limit of the 99% confidence interval?

2. A 5-year annuity of $350 monthly payments begins in 10 years (the first payment is at the end of the first month of year 10, so it's an ordinary annuity). The appropriate discount rate is 12%, compounded monthly. What is the value of the annuity today?