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If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company over the past four years:
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In: Finance
Reeve Corporation purchased a factory machine on JAN 1st, Year 1, for $40,000, estimated a useful life of 8 years, and estimated Residual Value (Scrap Value) of $4,000.
1. Using the Straight Line Method, calculate Depreciation Expense for Years 1 thru 8. Calculate Book Value for Years Ending 1 thru 8.
2. Using the Double Declining Balance Method, calculate Depreciation Expense for Years 1 thru 8. Calculate Book Value for Years Ending 1 thru 8.
Reeve Corporation estimated the factory machine purchased on JAN 1st, Year 1, for $40,000, has a Residual Value of $4,000, and an estimated useful life of 20,000 operating hours over the 8 year life of the asset. Estimated Operating Hours: Year 1- 2,000, Year 2- 2,000, Year 3- 2,000, Year 4- 2,000, Year 5- 2,000, Year 6- 4,000, Year 7- 4,000, and Year 8- 2,000.
3.. Using the Units of Activity Method, calculate Depreciation Expense for Years 1 thru 8. Calculate Book Value for Years Ending 1-8.
In: Accounting
Mr. Brown wants to buy a Tesla Model S car, whose price is $100, 848. The dealer offers a loan plan: $30, 000 down payment, $X at the end of year 1, year 2, year 3, and year 4. Assume the constant annual interest rate is 25%.
(a) What is X? [Hint: you may want to use calculators.]
(b) Suppose Mr. Brown accepts the offer. How much does Mr. Brown finance?
(c) What is the principle payment at the end of year 1?
(d) After taking the auto loan, Mr. Brown gets a refinance opportunity at the end of year 1 (right after he makes the first payment). That is, Mr. Brown can borrow from the bank to pay all remaining principle at the end of year 1. In this refinance plan, Mr. Brown needs to pay the bank $25, 000 at the end of year 2, year 3, year 4, and year 5. Will Mr. Brown choose to refinance? [Hint: the interest rate is still 25%. Mr. Brown will choose to refinance if and only if the NPV of the refinance plan is positive.]
Please focus on (d).
In: Finance
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If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company over the past four years: |
| Year 1 | Year 2 | Year 3 | Year 4 | ||||||||||||
| High price | $ | 98.70 | $ | 122.30 | $ | 131.70 | $ | 148.33 | |||||||
| Low price | 73.53 | 89.64 | 70.32 | 116.85 | |||||||||||
| EPS | 7.98 | 9.73 | 10.81 | 12.20 | |||||||||||
| Earnings are projected to grow at 5 percent over the next year. |
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What is your high target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| High target stock price | $ |
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What is your low target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| Low target stock price | $ |
In: Finance
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If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company over the past four years: |
| Year 1 | Year 2 | Year 3 | Year 4 | ||||||||||||
| High price | $ | 99.60 | $ | 123.20 | $ | 132.60 | $ | 149.23 | |||||||
| Low price | 74.43 | 90.54 | 71.22 | 117.75 | |||||||||||
| EPS | 8.88 | 10.63 | 11.71 | 13.10 | |||||||||||
| Earnings are projected to grow at 8 percent over the next year. |
|
What is your high target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| High target stock price | $ |
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What is your low target stock price over the next year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| Low target stock price |
In: Finance
Use Java
(Find the number of days in a month)
Write a program that prompts the user to enter the month and year
and displays the number of days in the month.
For example,
If the user entered month 2 and year 2012, the program should
display that February 2012 has 29 days.
If the user entered month 3 and year 2015, the program should
display that March 2015 has 31 days.
Sample Run 1
Enter a month in the year (e.g., 1 for Jan): 2
Enter a year: 2012
February 2012 has 29 days
Sample Run 2
Enter a month in the year (e.g., 1 for Jan): 4
Enter a year: 2005
April 2005 has 30 days
Sample Run 3
Enter a month in the year (e.g., 1 for Jan): 2
Enter a year: 2006
February 2006 has 28 days
Sample Run 4
Enter a month in the year (e.g., 1 for Jan): 2
Enter a year: 2000
February 2000 has 29 days
Class Name: Exercise03_11
If you get a logical or runtime error, please refer
https://liveexample.pearsoncmg.com/faq.html.
In: Computer Science
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Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $322,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,720,000. The cost of the machine will decline by $105,000 per year until it reaches $1,195,000, where it will remain. (Do not round intermediate calculations.) |
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If your required return is 13 percent, calculate the NPV today. (Round your answer to 2 decimal places. (e.g., 32.16)) |
| NPV | $ |
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If your required return is 13 percent, calculate the NPV if you wait to purchase the machine until the indicated year. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) |
| NPV | |
| Year 1 | $ |
| Year 2 | $ |
| Year 3 | $ |
| Year 4 | $ |
| Year 5 | $ |
| Year 6 | $ |
| Should you purchase the machine? |
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| If so, when should you purchase it? |
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In: Finance
Using the information above and any documents provided to you calculate the “Previous Year Depreciation” and the Beginning of Year Book Value” for the years and the depreciation method in the table below. Place your answers in the table.
|
Straight Line |
150% Declining Balance |
Sum of the Year’s Digits |
MACRS |
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Year |
Previous year Depreciation |
Beginning of year Book Value |
Previous year Depreciation |
Beginning of year Book Value |
Previous year Depreciation |
Beginning of year Book Value |
Previous year Depreciation |
Beginning of year Book Value |
|
3/1/2017 |
--- |
$10,000.00 |
--- |
$10,000.00 |
--- |
$10,000.00 |
--- |
$10,000.00 |
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12/31/2017 |
$1,166.67 |
$8,833.33 |
$2,500.00 |
$7,500.00 |
$1,457.75 |
$8,542.25 |
$3,333.00 |
$6,667.00 |
|
12/31/2018 |
$1,400.00 |
$7,433.33 |
$2,250.00 |
$5,250.00 |
$1,541.75 |
$7,000.50 |
$4,445.00 |
$2,222.00 |
|
12/31/2019 |
$1,400.00 |
$6,033.33 |
$1,575.00 |
$3,675.00 |
$1,291.75 |
$5,708.75 |
$1,481.00 |
$741.00 |
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12/31/2020 |
$1,400.00 |
$4,633.33 |
$675.00 |
$3,000.00 |
$1,041.75 |
$4,667.00 |
$741.00 |
$0.00 |
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12/31/2021 |
$1,400.00 |
$3,233.33 |
$791.75 |
$3,875.25 |
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12/31/2022 |
$233.33 |
$3,000.00 |
$541.75 |
$3,333.50 |
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12/31/2023 |
$41.75 |
$3,291.75 |
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12/31/2024 |
$291.75 |
$3,000.00 |
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MACRS
Recovery Percentages
Recovery Year
Recovery Year 3 year class 5 year class 7 year class
2. 44.45% 32.00% 24.49%
3. 14.81% 19.20% 17.49%
4. 7.41% 11.52% 8.92%
5. 11.53% 8.93%
6. 5.76% 4.46%
In: Accounting
Yoshi Company completed the following transactions and events involving its delivery trucks.
Year 1
| Jan. | 1 | Paid $22,015 cash plus $1,785 in sales tax for a new delivery truck estimated to have a five-year life and a $2,000 salvage value. Delivery truck costs are recorded in the Trucks account. | ||
| Dec. | 31 | Recorded annual straight-line depreciation on the truck. |
Year 2
| Dec. | 31 | The truck’s estimated useful life was changed from five to four years, and the estimated salvage value was increased to $2,700. Recorded annual straight-line depreciation on the truck. |
Year 3
| Dec. | 31 | Recorded annual straight-line depreciation on the truck. | ||
| Dec. | 31 |
Sold the truck for $5,500 cash. |
Required:
1-a. Calculate depreciation for Year 2.
1-b. Calculate book value and gain (loss) for sale
of Truck on December 31, Year 3.
1-c. Prepare journal entries to record these
transactions and events.
Calculate depreciation for Year 2.
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Calculate book value and gain (loss) for sale of Truck on December 31, Year 3.
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Journal entry worksheet
Note: Enter debits before credits.
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In: Accounting
1A) What is the discount rate at which the following cash flows
have a NPV of $0? Answer in %, rounding to 2 decimals.
Year 0 cash flow = -158,000
Year 1 cash flow = 30,000
Year 2 cash flow = 36,000
Year 3 cash flow = 38,000
Year 4 cash flow = 39,000
Year 5 cash flow = 43,000
Year 6 cash flow = 42,000
1B) Your firm is evaluating a capital budgeting project. The
estimated cash flows appear below. The board of directors wants to
know the expected impact on shareholder wealth. Knowing that the
estimated impact on shareholder wealth equates to net present value
(NPV), you use your handy calculator to compute the value. What is
the project's NPV? Assume that the cash flows occur at the end of
each year. The discount rate (i.e., required rate of return, hurdle
rate) is 17.1%. (Round to nearest penny)
| Year 0 cash flow | -96,000 |
| Year 1 cash flow | 48,000 |
| Year 2 cash flow | 40,000 |
| Year 3 cash flow | 53,000 |
| Year 4 cash flow | 43,000 |
| Year 5 cash flow | 25,000 |
1C) Spacely Sprockets Inc is a new start-up evaluating a new project. They worry that they don't have all the requisite operating information they will need to estimate Cash Flows From Assets and that they wouldn't be able to evaluate this project based on NPV and IRR (which both use the CFFA's to evaluate). Instead they have decided to use the Average Accounting Return (AAR) rule to evaluate the project. What is the AAR for this project? (Enter your answer as a percentage and Round to 2 decimals)
| Net Income | Book Value of Assets | |
|---|---|---|
| Year 1 | 42,000 | 526,000 |
| Year 2 | 52,000 | 607,000 |
| Year 3 | 62,000 | 699,000 |
ANSWER EACH PART (A,B,C)
In: Finance