. The following information pertains to Feyenoord, Inc.:

1. Net income for the year 2019 equals $ 360,000.
2. Since the beginning of year, $200,000 of convertible bonds (issued at par) were outstanding. Each of the 200, $1,000 bonds can be converted into 50 shares of common stock for the next 10 years. None of these bonds were converted during the year.
3. Since the beginning of the year, stock warrants were outstanding to buy 16,000 shares of common stock at $10 per share. None of these warrants were exercised during the year.
4. During the entire year, 200,000 shares of $5 par common stock were outstanding.
5. Feyenoord's income tax rate for the year is 30%.
6. The average market price for common stock during 2019 was $16.

Compute basic and diluted earnings per share for the year 2019.

Question Nine

Mr West decides to deposit $5000 in a BankEast Ltd account that pays 8% p.a. continuously compounded. What will be his account balance in five years?

Question Ten

Norton Industries Pty Ltd is looking at investing in Project X that is expected to generate the following cash flows each year for six years.

Suppose similar investments are paying a return of 10% pa compounded semi-annually. How much should the Project X cost Norton Industries?

Please show works, don't use excel.

The Accounting Equation Ginger Enterprises began the year with total assets of $505,000 and total liabilities of $227,000. Using this information and the accounting equation, answer each of the following independent questions. 1. What was the amount of Ginger's owners' equity at the beginning of the year? $ 2. If Ginger's total assets increased by $101,000 and its total liabilities increased by $71,000 during the year, what was the amount of Ginger's owners' equity at the end of the year? $ 3. If Ginger's total liabilities decreased by $30,000 and its owners' equity increased by $64,000 during the year, what was the amount of its total assets at the end of the year? $ 4. If Ginger's total assets doubled to $1,010,000 and its owners' equity remained the same during the year, what was the amount of its total liabilities at the end of the year?

You buy  a recently completed industrial-office building and starting at the beginning of the first year, you put in a single tenant who pays net rent $50,000 per year at the end of each year on a 5-year triple-net lease.  At the end of the fifth year, if all goes well between you and the tenant, you expect to increase the rent to $70,000 per year, and put the tenant on a 10-year triple-net lease.  After owning the property for 10 years, and just after collecting the rent for that 10^th year, you expect to sell the building at a Reversionary Cap Rate of 10%.  

1. What is the value of the property if the required initial return is 12 percent per year?

2. If the cap rate on the price you pay when you initially buy the building is in-line with the market cap rate of 10.5%, then what is your IRR on your excellent real estate investment?

You buy a recently completed industrial-office building and starting at the beginning of the first year, you put in a single-tenant who pays net rent $50,000 per year at the end of each year on a 5-year triple-net lease. At the end of the fifth year, if all goes well between you and the tenant, you expect to increase the rent to $70,000 per year and put the tenant on a 10-year triple-net lease. After owning the property for 10 years, and just after collecting the rent for that 10th year, you expect to sell the building at a Reversionary Cap Rate of 10%.

A. What is the value of the property if the required initial return is 12 percent per year?

B. If the cap rate on the price you pay when you initially buy the building is in-line with the market cap rate of 10.5%, then what is your IRR on your excellent real estate investment?

An analyst evaluating securities has obtained the following information. The real rate of interest is 2.2% and is expected to remain constant for the next 5 years. Inflation is expected to be 2.1% next year, 3.1% the following year, 4.1% the third year, and 5.1% every year thereafter. The maturity risk premium is estimated to be 0.1 × (t – 1)%, where t = number of years to maturity. The liquidity premium on relevant 5-year securities is 0.5% and the default risk premium on relevant 5-year securities is 1%. a. What is the yield on a 1-year T-bill? Round your intermediate calculations and final answer to two decimal places. % b. What is the yield on a 5-year T-bond? Round your intermediate calculations and final answer to two decimal places. % c. What is the yield on a 5-year corporate bond? Round your intermediate calculations and final answer to two decimal places. %

1. Assume that BAPS Corporation is considering the establishment of a subsidiary in Norway. The initial investment required by the parent is $10 million. If the project is undertaken, BAPS would terminate the project after four years. Their cost of capital is 13%, and the project is of the same risk as BAPS’ existing projects. All cash flows generated from the project will be remitted to the parent at the end of each year. Listed below are the estimated cash flows the Norwegian subsidiary will generate over the project’s lifetime in Norwegian kroner (NOK):

               Year 1                         Year 2                          Year 3                         Year 4

NOK20,000,000           NOK30,000,000           NOK34,000,000       NOK40,000,000

The current exchange rate of the Norwegian kroner is $0.135. BAPS’ exchange rate forecast for the Norwegian kroner over the project’s lifetime is listed below:

               Year 1                       Year 2                         Year 3                         Year 4

                $.13                           $.14                            $.12                             $.15

1. What is the net present value of the Norwegian project? What is the investment decision? (10)

A manufacturing processing company currently owns a hydraulic pressing machine that was bought for $250,000 three years ago. This machine is worth $90,000 today. The operating and maintenance (O&M) cost of the machine is $15,000 in year 1, which increases by $1,000 ever year after that till the end of its remaining 3 years. If this machine is kept and sold after one year, it market value will be $50,000. If it is not sold in year 1, it has to be kept for two more years and its market value at the end of year 3 will be $10,000.

A replacement hydraulic machine can be purchased for $200,000. The useful life of this machine is 5 years. Its O&M cost is $6,000 in year 1 and it increases by 3% every year after that. This machine can only be sold in year 3 for $80,000 or in year 5 for $50,000.

If the MARR is 7%, determine when the best time to replace the current machine is.

(all by hand, no excel)

Analyzing Cash Dividends on Preferred and Common Stock
Everett Company has outstanding 30,000 shares of $50 par value, 6% preferred stock and 70,000 shares of $1 par value common stock. During its first three years in business, it declared and paid no cash dividends in the first year, $310,000 in the second year, and $90,000 in the third year.

(a) If the preferred stock is cumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years.

(b) If the preferred stock is noncumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years.