4.A machine cost $200,000 and has a salvage value of $100,000 if kept for one year. The salvage value will decrease by $50,000 in years 2 and 3 and remain zero after year 3. The operating costs are $50,000 the first year and increase by $50,000 per year. So operating costs in year two will be $100,000, and in year three $150,000 and so on. How long should the equipment be kept so that annual cost is minimized if the MARR is 10%/year compounded annually or stated another way what is the economic service life (ESL) and what is the associated annual cost for this service life?

Please solve with no table or excel

A stock market investor is interested in determining whether there is a significant difference in the P/E (price to earnings) ratio for companies from one year to the next. Six companies are randomly selected and their P/E ratios for Year 1 and Year 2 are recorded. Are the P/E ratios for Year 1 greater than for Year 2? Use a 10% level of significance.

State the null and alternative hypotheses for a one — sided test.

Find the differences.

Find the mean of the differences.

.

Digg company is evaluation two projects for next year’s capital budgeting. The after-tax cash flow ($) (including depreciation) are following:

Project A                              Project B

Year 0    -6000 -17500

Year 1    2000                                       5600

Year 2    2000                                       5600

Year 3    2000                                       5600

Year 4    2000                                       5600

Year 5    2000                                       5600

Year 6    4000                                       9000

If company’s WACC is 13%, find NPV, IRR, Payback and discount payback for each project. If the projects are mutually exclusive what is your recommendation to the company.

Specific help and showing of work for the payback discount please!!

1. The University of Amazon faculty have just signed a new three-year contract that included pay rate increases for the next three years of 6% (first year), 5% (second year), and 4% (third year). Write a program that inputs the current salary and the current year. Program MUST include at least one function. It can be a void function or a data type function whichever you choose. Output should include year and salary for each year. For example:

2020 $xx,xxx.xx

2021 $xx,xxx.xx

2022 $xx,xxx.xx

2023 $xx,xxx.xx

Test Data: 2020, 43897.00

Program is in c++.

A small company heats its building and spends $8,200 per year on natural gas for this purpose. Cost increases of natural gas are expected to be 9​% per year starting one year from now​ (i.e., the first cash flow is $8,938 at EOY​ one). Their maintenance on the gas furnace is ​$355 per​ year, and this expense is expected to increase by 12​% per year starting one year from now​ (i.e., the first cash flow for this expense is $397.60 at the EOY​ one). If the planning horizon is 14 ​years, what is the total annual equivalent expense for operating and maintaining the​ furnace? The interest rate is 18​% per year.

Find the present values of these ordinary annuities. Discounting occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent.

a.) $700 per year for 14 years at 10%.

b.)$350 per year for 7 years at 5%.

c.)$700 per year for 7 years at 0%.

Rework previous parts assuming they are annuities due.

a.)Present value of $700 per year for 14 years at 10%:

b.)Present value of $350 per year for 7 years at 5%:

c.)Present value of $700 per year for 7 years at 0%: Please explain it

Please explain it

Oregon Forest Products will acquire new equipment that falls under the five-year MACRS category. The cost is $220,000. If the equipment is purchased, the following earnings before depreciation and taxes will be generated for the next six years. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.

The firm is in a 35 percent tax bracket and has a 12 percent cost of capital.

a. Assuming that the expectations hypothesis is valid, compute the price of the four-year bond shown below at the end of (i) the first year; (ii) the second year; (iii) the third year; (iv) the fourth year. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Beg of year 1,2,3,4

Price of bond $920.90, $912.97, $826.62, $785.62

What is expected price of each?

b. What is the rate of return of the bond in years 1, 2, 3, and 4? Conclude that the expected return equals the forward rate for each year. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Starfax, Inc., manufactures a small part that is widely used in various electronic products such as home computers. Results for the first three years of operations were as follows (absorption costing basis):

    Year 1   Year 2   Year 3
Sales   $   1,040,000      $   882,000      $   1,040,000     
Cost of goods sold      880,000         720,000         924,000        
Gross margin      160,000         162,000         116,000     
Selling and administrative expenses      150,000         142,000         150,000        
Net operating income (loss)   $   10,000      $   20,000      $   (34,000   )
  

In the latter part of Year 2, a competitor went out of business and in the process dumped a large number of units on the market. As a result, Starfax’s sales dropped by 10% during Year 2 even though production increased during the year. Management had expected sales to remain constant at 40,000 units; the increased production was designed to provide the company with a buffer of protection against unexpected spurts in demand. By the start of Year 3, management could see that it had excess inventory and that spurts in demand were unlikely. To reduce the excessive inventories, Starfax cut back production during Year 3, as shown below:

    Year 1   Year 2   Year 3
Production in units   40,000   45,000   36,000
Sales in units   40,000   36,000   40,000

Additional information about the company follows:

The company’s plant is highly automated. Variable manufacturing expenses (direct materials, direct labor, and variable manufacturing overhead) total only $4.00 per unit, and fixed manufacturing overhead expenses total $720,000 per year.

A new fixed manufacturing overhead rate is computed each year based that year's actual fixed manufacturing overhead costs divided by the actual number of units produced.

Variable selling and administrative expenses were $2 per unit sold in each year. Fixed selling and administrative expenses totaled $70,000 per year.

The company uses a FIFO inventory flow assumption. (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are sold first.)

Starfax’s management can’t understand why profits doubled during Year 2 when sales dropped by 10% and why a loss was incurred during Year 3 when sales recovered to previous levels.

Required:

1. Prepare a variable costing income statement for each year.

2. Refer to the absorption costing income statements above.

a. Compute the unit product cost in each year under absorption costing. Show how much of this cost is variable and how much is fixed.

b. Reconcile the variable costing and absorption costing net operating income figures for each year.

5b. If Lean Production had been used during Year 2 and Year 3, what would the company’s net operating income (or loss) have been in each year under absorption costing?