The president of Lowell Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $60,000, and it falls into the MACRS 3-year class (33% in year 1, 45% in year 2, 15% in year 3, and 7% in year 4). Purchase of the computer would require an increase in net operating working capital of $2,000. The computer would increase the firm's before-tax revenues by $20,000 per year but would also increase operating costs by $5,000 per year. The computer is expected to be used for 4 years and then be sold for $25,000. The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent. What is the total value of the terminal year non-operating cash flows (after-tax salvage value + working capital recovered) at the end of Year 4?

Rotorua Products, Ltd., of New Zealand markets agricultural products for the burgeoning Asian consumer market. The company’s current assets, current liabilities, and sales over the last five years (Year 5 is the most recent year) are as follows:

Required:

1. Express all of the asset, liability, and sales data in trend percentages. Use Year 1 as the base year. (Round your percentage answers to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)

A machine can be purchased for $252,000 and used for five years, yielding the following net incomes. In projecting net incomes, double-declining depreciation is applied, using a five-year life and a zero salvage value.

Compute the machine’s payback period (ignore taxes). (Round payback period answer to 3 decimal places.)

Computation of Annual Depreciation Expense

Year       Beginning Book Value    Annual Depr. (40% of Book Value)            Accumulated Depreciation at Year-End                Ending Book Value          

1                                                                             

2                                                             

3                                                             

4                                                             

5                                                             

Annual Cash Flows

Year       Net income         Depreciation      Net Cash Flow   Cumulative Cash Flow   

0              $(252,000)                                           $(252,000)          

1              13,000                                  

2              28,000                                  

3              62,000                                  

4              48,000                                  

5              101,000                                                

Payback period =                              years

Sunset Bakers needs to purchase an oven. They are considering two alternatives:

Alternative 1: A Conventional Oven will cost $12,000 and can be expected to last 8 years, and will have a salvage value of $1,000 at the end of year 8. The cost of electricity used will be $2,500 per year. Maintenance cost will be $200 per year. In year 4 the heating element will need to be replaced at a cost of $850.

Alternative 2: A High efficiency Oven will cost $14,500 and can be expected to last 8 years, and will have a salvage value of $2,000 at the end of year 8. The cost of electricity used will be $2,000 per year. Maintenance cost is will be $250 per year. In year 4 the heating element will need to be replaced at a cost of $850. In year 5 the fan motor will need to be replaced at a cost of $500. Assume the services provided by the ovens are identical; assume an interest rate of 10%.

Compare the ANNUAL EQUIVALENT costs of the 2 alternatives and make a recommendation for selection.

Assume we start with a total government debt of $0. What happens at the end of each year? Hint if I borrow $10 million then my debt is equal to $10 million.

In year 1 the government spends $405 million and collects $356 million in taxes. Public saving in year 1 is equal to $__million and the government debt is equal to $ __ million.

In year 2 the government spends $390 million and collects $360 million in taxes. Public saving in year 2 is equal to $ __million and the government debt is now equal to $ __million.

In year 3 the government spends $360 million and collects $358 million in taxes. Public saving in year 3 is equal to $ __ million and the government debt is now equal to $ __ million.

In year 4 the government spends $405 million and collects $425 million in taxes. Public saving in year 4 is equal to $__ million and the government debt is now equal to $ __million.

One year ago, you bought a put option on 500,000 euros with an expiration date of one year. You paid a premium on the put option of $.03 per unit. The exercise price was $1.30. Assume that one year ago, the spot rate of the euro was $1.29, the one-year forward rate exhibited a discount of 3%, and the one-year futures price was the same as the one-year forward rate. From one year ago to today, the euro depreciated against the dollar by 2 percent. Today the put option will be exercised (if it is feasible for the buyer to do so).

a. Determine the total dollar amount of your profit or loss from your position in the put option.

b.Now assume that instead of taking a position in the put option one year ago, you sold a futures contract on 500,000 euros with a settlement date of one year. Determine the total dollar amount of your profit or loss.

For CB output, you should paste the forecast output in your Excel calculations file. Show the split view in all CB output.

1.   Two investments (A and B, below) have been proposed to the Capital Investment committee of your organization;

a.      The required rate of return for your company is 15%. What is the NPV for each investment? Assume the initial investments ($150k and $50k) occur at the beginning of the year and all other costs and benefits occur at the end of the year indicated. Ignore inflation.

b.     What is the payback period for each investment?

c.      Which investment would you recommend and why?

d.     Why might you recommend the other investment?

2.     Unfortunately, the Capital Investment Committee refused to approve your recommendation (Problem 1) since you did not consider the uncertainty inherent in these types of investments. You pull out your very dog-eared notes from PMAN 635 and repeat your analysis, this time using Crystal Ball and the following information:

Investment A:

                                                    i.     Year 0 Investment cost: Triangular distribution (optimistic: $125,000; most likely: $150,000; pessimistic: $200,000)

                                                  ii.     Year 1-5 operating cost: Normal distribution (mean of $5,000, standard deviation of $500)

                                                iii.     Year 1 Benefits: Normal distribution (mean of $75,000, standard deviation of $20,000)

                                                iv.     Year 2 Benefits: Normal distribution (mean of $55,000, standard deviation of $15,000)

                                                  v.     Year 3 Benefits: Normal distribution (mean of $35,000, standard deviation of $10,000)

                                                vi.     Year 4 Benefits: Normal distribution (mean of $20,000, standard deviation of $5000)

                                               vii.     Year 5 Benefits: Uniform distribution (Minimum: $60,000; Maximum: $70,000)

Investment B:

                                             viii.     Year 0 Investment cost: Uniform distribution (Minimum: $40,000; Maximum: $60,000)

                                                ix.     Year 1 Benefits: Normal distribution (mean of $30,000, standard deviation of $3,000)

                                                  x.     Year 2 Benefits: Normal distribution (mean of $15,000, standard deviation of $5,000)

                                                xi.     Year 3 Benefits: Normal distribution (mean of $10,000, standard deviation of $3,000)

                                               xii.     Year 4 Benefits: Normal distribution (mean of $10,000, standard deviation of $3,000)

                                             xiii.     Year 5 Benefits: Normal distribution (mean of $15,000, standard deviation of $5,000)

a.      If the IRR is still 15%, use Crystal Ball to calculate the median NPV for each investment. Would you still prefer the same investment you recommended in question 1.c?

b.      What is the probability that Investment B will be better than Investment A (financially)?

Be sure to show all work.

3.     Using the forward and backward pass method, identify the Critical Path and total duration for the following network. Show all work.

I can't get the number of days to print. Here is my code:

public static void main(String[] args) { // Prompt the user to enter year Scanner scanner = new Scanner(System.in); // Prompt the user to enter year System.out.print("Enter full year (e.g., 2016): "); int year = scanner.nextInt(); for(int i = 1; i <= 12; i++) printMonth(year, i); } /** Print the calendar for a month in a year */ static void printMonth(int year, int month) { // Print the headings of the calendar printMonthTitle(year, month); // Print the body of the calendar printMonthBody(year, month); } /** Print the month title, e.g., May, 1999 */ static void printMonthTitle(int year, int month) { System.out.println(" " + getMonthName(month) + " " + year); System.out.println("-----------------------------"); System.out.println(" Sun Mon Tue Wed Thu Fri Sat"); } /** Get the English name for the month */ static String getMonthName(int month) { String monthName = null; switch (month) { case 1: monthName = "January"; break; case 2: monthName = "February"; break; case 3: monthName = "March"; break; case 4: monthName = "April"; break; case 5: monthName = "May"; break; case 6: monthName = "June"; break; case 7: monthName = "July"; break; case 8: monthName = "August"; break; case 9: monthName = "September"; break; case 10: monthName = "October"; break; case 11: monthName = "November"; break; case 12: monthName = "December"; } return monthName; } /** Print month body */ static void printMonthBody(int year, int month) { // Get start day of the week for the first date in the month int startDay = getStartDay(year, month); // Get number of days in the month int numberOfDaysInMonth = getNumberOfDaysInMonth(year, month); // Pad space before the first day of the month int i = 0; for (i = 0; i < startDay; i++) System.out.print(" "); for (i = 1; i <= numberOfDaysInMonth; i++) { if (i < 10) System.out.print(" " + i); else System.out.print(" " + i); if ((i + startDay) % 7 == 0) System.out.println(); } System.out.println(); } /** Get the start day of the first day in a month */ static int getStartDay(int year, int month) { // Get total number of days since 1/1/1800 int startDay1800 = 3; int totalNumberOfDays = getTotalNumberOfDays(year, month); // Return the start day return (totalNumberOfDays + startDay1800) % 7; } /** Get the total number of days since January 1, 1800 */ static int getTotalNumberOfDays(int year, int month) { int total = 0; // Get the total days from 1800 to year - 1 for (int i = 1800; i < year; i++) if (isLeapYear(i)) total = total + 366; else total = total + 365; // Add days from Jan to the month prior to the calendar month for (int i = 1; i < month; i++) total = total + getNumberOfDaysInMonth(year, i); return total; } /** Get the number of days in a month */ static int getNumberOfDaysInMonth(int year, int month) { if (month == 1 || month == 3 || month == 5 || month == 7 || month == 8 || month == 10 || month == 12) return 31; else if (month == 4 || month == 6 || month == 9 || month == 11) return 30; else if (month == 2) return isLeapYear(year) ? 29 : 28; return 0; // If month is incorrect } /** Determine if it is a leap year */ static boolean isLeapYear(int year) { return year % 400 == 0 || (year % 4 == 0 && year % 100 != 0); }

what is the present worth of $2,757 in year 1 and amounts increasing by $109 per year through year 5 at an interest rate of 10% per year?

if an investment account gives 5% interest annually, how much equal annual deposits you have to make for 10 years starting year 1 to have a $174,468 at your account at the end of this investment.

After Andy completes college, he has two job options. Option 1 will give him $40,000 in the first year and $45,000 in the second year. Option 2 will give him $35,000 in the first year and $50,000 in the second year. Nominal interest rate is 5%. What is the discounted present value of his two-year flow of nominal income for option 1?