QWY company is looking to build a manufacturing plant overseas. Project = 5yrs The cost of the land for this project is £6,500,000. The land can be sold for £4,500,000 in five years’ time, irrespective of what is built on it (ignore taxes). The manufacturing plant will cost £15,000,000. The company uses straight line method of depreciation and predicts to sell the plant for £5,000,000 (ignore taxes) at the end of the project. The expectation from the project is to sell 12,000 units per year at a selling price of £9,500 per unit. The variable production costs are £8,500 per unit in each of the five years. The company will incur £1,000,000 in fixed costs in each of the five years. You are given the following market data on the firm’s securities:

Debt – 150,000 bonds outstanding, 7% coupon, paid annually; 15 years to maturity; each bond has £100 par value and currently sells at 92% of par.

Ordinary shares – 300,000 shares outstanding, market price £75 per share; the beta is 1.3

Preference shares – 20,000 shares outstanding with 5% dividend, par value £100, market price £70 per share The market risk premium is 8%, and the risk-free rate is 5%. The management foresees that the new project is riskier than a typical project they undertake. Therefore, an adjustment factor of 1.5% to the cost of capital needs to be done to account for the increased risk. The company’s tax rate is 30%.

You are required to:

i) Calculate the project’s initial cash out flow at time t = 0.

ii) Calculate the market value of debt, ordinary shares and preference shares, as well as for the company as a whole.

iii) Calculate the appropriate cost of capital to use when evaluating the project. (round it up or down to the nearest whole percentage)

iv) What is the project’s annual operating cash flow? v) What is the NPV for the project?

“Today” is late March. Your company, Mesquite Bush Refining Inc., produces 42,000,000 gallons of ultra low sulfur diesel (ULSD) fuel at the end of each month. You have the following market data.

• Spot price of ULSD diesel fuel: S₀ = $2.00/gal.
• Futures price of June NYMEX New York Harbor ULSD futures: F₀ = $1.84/gal.
• Size of the underlying for this futures contract: 42,000 gallons
• Trading in a NYMEX New York Harbor ULSD contract ceases shortly before the contract month begins. For this analysis, assume that time to expiration of the June contract (more precisely, time until the start of the delivery month) is T = 2/12 year.
• Your storage cost for ULSD diesel is $0.125 per barrel per month. Assume that you must pay in advance.
• Continuously compounded one-month risk-free rate: r = 2% per year.

Given current spot and futures prices, should your company hedge its late May sale with ULSD futures? If yes, what hedging strategy should you adopt? (Assume that your company is willing to hedge only at a “fair” price or better.)

Group of answer choices

Hedge: take a long position in 1,000 June ULSD futures contracts. Close out your futures position in late May.

Hedge: take a short position in 100 May ULSD futures contracts. Close out your futures position in late May.

Hedge: take a short position in 1,000 June ULSD futures contracts. Close out your futures position in late May.

Hedge: take a long position in 100 May ULSD futures contracts. Close out your futures position in late May.

Do not hedge with USLD futures.

Mr. Agirich of Aggie Farms is considering the purchase of 100 acres of prime ranch land that is adjacent the ranch he now owns. Mr. Agirich can operate the additional 100 acres with present labor, machinery and breeding livestock. The land is selling for $400 per acre.   Mr. Agirich believes that the operating receipts per acre of land per year will $450 and operating expenses will be $420 in present dollars. Mr. Agirich expects that the inflation rate will be 3% and operating receipts and expenses per acre will increase at the rate of inflation. The farmer will sell the land in three years and he anticipates that land prices will increase at the rate of inflation (from a base price of $400). A bank will loan him $350 per acre of land and the loan will be fully amortized over 15 years at 10% (annual payments). The outstanding balance of the loan will be paid at the end of the third year (balloon payment). Assume that the marginal tax rate is 30% and that Mr. Agirich requires at least a 6% pre-tax, risk-free return on capital and a 4% risk premium on projects of comparable risk. (Do the analysis on a per acre basis.)

            A.        Lay out the cash flows for the investment.

            B.        Calculate the net present value. [NPV=$6.12]

            C.        Layout the financing cash flows associated with this investment.

            D.        Is there a potential liquidity problem?

E.         What maximum price should Mr. Agirich be willing to pay for an acre of land?

                        F.         Calculate the net present value if the real net returns of $30.00 per acre and the real purchase price of land of $400 per acre are assumed to increase by 4% each year. Remember that you still need to adjust for inflation. Everything else is the same as before. [NPV=42.04]

The following data was collected to explore how the number of square feet in a house, the number of bedrooms, and the age of the house affect the selling price of the house. The dependent variable is the selling price of the house, the first independent variable (x1) is the square footage, the second independent variable (x2) is the number of bedrooms, and the third independent variable (x3) is the age of the house. Effects on Selling Price of Houses Square Feet Number of Bedrooms Age Selling Price 3073 5 15 282300 2961 4 14 231300 2082 4 14 203900 1725 4 10 185400 1700 4 9 181200 1529 3 8 172700 1388 3 8 170500 1083 3 7 165900 1030 3 5 107300

Step 2 of 2 : Determine if a statistically significant linear relationship exists between the independent and dependent variables at the 0.05 level of significance. If the relationship is statistically significant, identify the multiple regression equation that best fits the data, rounding the answers to three decimal places. Otherwise, indicate that there is not enough evidence to show that the relationship is statistically significant.

THESE 3 QUESTIONS IM NOT SURE OF PLEASE ANSWER THEM IN 150 WORDS FOR EACH QUESTION. THANK YOU!

1.

First degree – the seller must know the absolute maximum price that every consumer is willing to pay.

Second degree – the price of the good or service varies according to quantity demanded.

Third degree – the price of the good or service varies by attributes such as location, age, sex, and economic status.

Give an example of price discrimination. If you can, try to find some from each of the above degrees within the same industry.  

2.

How might a professional sports team be considered a monopoly when there are other such teams in the nation?

Then, give your own example of a monopoly. Be sure to explain and justify why you believe they are a monopoly.

3.

Discuss what public-utility regulatory agencies ultimate goals are. What are they attempting to accomplish through their actions? Are they justified in doing so? Some guiding questions are:

Is there such as thing as a good monopoly?

How to they try to eliminate the misallocation of resources that results from monopoly?

Are fair-return policies enough/effective?

At 12/31/17, the end of Jenner Company's first year of business, inventory was $4,100 and $2,800 at cost and at market, respectively.

Following is data relative to the 12/31/18 inventory of Jenner:

Original Appropriate

Cost Selling Disposal Inventory

Item Per Unit Price Cost NRV Value

A $ .65 $ 1.00

B .45 1.00

C .70 1.00

D .75 1.00

E .90 1.00

Selling price is $1.00/unit for all items. Disposal costs amount to 10% of selling price and a "normal" profit is 30% of selling price. There are 1,000 units of each item in the 12/31/18 inventory.

Instructions

(a) Prepare the entry at 12/31/17 necessary to implement the lower-of-cost-or-market procedure assuming Jenner uses a contra account for its balance sheet.

(b) Complete the last three columns in the 12/31/18 schedule above based upon the lower-of-cost-or-NRV rules.

(c) Prepare the entry(ies) necessary at 12/31/18 based on the data above.

The following data was collected to explore how the number of square feet in a house, the number of bedrooms, and the age of the house affect the selling price of the house. The dependent variable is the selling price of the house, the first independent variable (x1x1) is the square footage, the second independent variable (x2x2) is the number of bedrooms, and the third independent variable (x3x3) is the age of the house.

Copy Data

Step 1 of 2 :  

Find the p-value for the regression equation that fits the given data. Round your answer to four decimal places.

What do you need to put in Input x and Input y range cells? I am stuck here

Jonas Consulting enters into a contract to provide cost management consulting services over a one-year period for $10,000 per month on January 1. At the end of the contract, Jonas will either give the customer a $24,000 refund or be entitled to an additional $24,000, depending on the level of cost savings. The company believes there is an 80% chance that it will be entitled to an additional $24,000 and a 20% chance it will give a refund of $24,000. In addition, Jonas believes it is probable that a significant reversal of any previously recognized revenue will not occur. The contract performance is determined to be satisfied over time.
Required:

1. Determine the monthly transaction price that Jonas should use for recording the contract and prepare Jonas’s journal entry at the end of the first month of the contract using the most likely amount approach.
2. Next Level What is the objective of determining the transaction price based on the amount of variable consideration?

Analysis:

Determine the monthly transaction price that Jonas should use for recording the contract using the most likely amount approach.

Monthly transaction price $_______________

General Journal (3 Accounts):

1.5a. Explain why, in our model of an isolated market, the intersection of demand and supply curves may be thought of as an equilibrium.

b. Draw a diagram in which equilibrium arises without the intersection of demand and supply curves at a price of zero. Make your diagram large, label all curves and axes, and identify the equilibrium point. 2 1.6. Suppose you observed that in the market for wheat, 20 million bushels were sold during the first week in September for $1.00 per bushel, and that during the second week in September 25 million bushels were sold at a price of $1.25 per bushel. a. Construct a model of the market (not of consumer or firm behavior) to explain what happened. Be sure to state all of the assumptions you make. If you draw a diagram in your answer, make it large and label all curves, axes, and points. b. Use your model to explain (i) how price and quantity were determined each week and (ii) why the price of wheat went up $.25 from one week to the next.