In tropical regions less energy is emitted by the earth as infrared radiation than is absorbed as solar radiation averaged over the year. Explain briefly why tropical regions do not continually get warmer year after year after year.

Looking Good Co. has identified an investment project with the following cash flows. Year 1 $1000, Year 2 $200, Year 3 $800 and Year 4 $1500. If the discount rate is 12%, what is the present value of these cashflows?

Introduction to finance

Answer questions A-D

Question A

Alphabet Inc. will not pay it's first dividend until ten years from now. The first dividend received in 10 years (Year 10) is expected to be $120. Dividends are expected to grow at 4% forever after this first dividend payment. The required rate of return for similar stocks is 15%. What is the current value of Alphabet, Inc. stock?

Question B

Snoke Inc's will pay a dividend of $10 next year. The required rate of return is 10% and dividends are expected to grow 5% after next year. What will Snoke's dividend be in 100 years? (Year 100)?

Question C

Snoke Inc's will pay a dividend of $10 next year. The required rate of return is 10% and dividends are expected to grow 5% after next year. What is Snoke's estimated stock price at the end of Year 99? (Hint use Year 100 dividend)

Question D

Snoke Inc's will pay a dividend of $10 next year. The required rate of return is 10% and dividends are expected to grow 5% after next year. What is Snoke's estimated stock price as of today (Year 0 Estimated Price of Stock)?

Question 1) In 2017, Angie placed in service $4,000 of 5-year property and $6,000 of 7 year property. What is the effect of an election to use straight line depreciation over the alternative depreciation system life for the 5 year property for 2017?

A. the election must cover 5 year and 7 year property placed in service in 2017 and future years.
B. the election must cover the 5 year and 7 year property.
C. the election will apply to the 5 year property placed in service in 2017 and future years.
D. the election will apply to the 5 year property placed in service in 2017.

Question 2) In 1998, a taxpayer places into service an asset costing $6,000 with a 3-year recovery period for regular tax purposes and a 4 year alternative depreciation system recovery period for alternative minimum tax purposes. For regular tax purposes, 200% declining balance depreciation is selected. What is the greatest amount of depreciation allowed for alternative minimum taxable income in 1998?

A. $1,125
B. $1,500
C. $2,000
D. $2,250

Note: This was all the information provided in the questions. I removed the 3rd question because I figured it out.

Weihu Corporation is considering building a new factory to manufacture bicycles. Weihu has already spent 300,000 in the R&D expense. The new factory will cost $1,500,000. The expected number of bikes produced and sold is 4000 for the first year, 5000 for the second year and 5500 for the third year. The sales price is $250 per bike in the first year in nominal terms. This price is expected to grow at 3% per year in real terms. The variable costs per bike are $120 in the first year in nominal terms. These costs are expected to increase at 2.5% per year in real terms. The factory requires temporary additional personnel, which will result in additional labor costs of $50,000 per year (in nominal terms), which remains constant in real terms. All costs and sales are incurred at the end of each year. Additional net working capital requirements at the beginning of each year are 15% of expected sales for that same year. The market value of the factory after three years is $1,300,000 in real terms. The asset class is closed upon selling the factory. The CCA rate is 4%, the tax rate is 35%, the expected inflation rate is 2.5% and the required rate of return is 10% in real terms. Calculate the project’s NPV.

Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $330,000 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 $1,850,000. The cost of the machine will decline by $120,000 per year until it reaches $1,250,000, where it will remain.

If your required return is 12 percent, calculate the NPV if you purchase the machine today. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

NPV          $  

If your required return is 12 percent, calculate the NPV if you wait to purchase the machine until the indicated year. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Should you purchase the machine?

Yes

No

If so, when should you purchase it?

Today

One year from now

Two years from now

Exercise 6-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3] Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:

Variable costs per unit: Manufacturing: Direct materials $ 27 Direct labor $ 12 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year:

Fixed manufacturing overhead $ 240,000 Fixed selling and administrative expenses $ 90,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $59 per unit. Required:

1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year

2. b. Prepare an income statement for Year 1 and Year 2.

2. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2.

Required information

[The following information applies to the questions displayed below.]

Oak Mart, a producer of solid oak tables, reports the following data from its second year of business.

1. Prepare the current-year income statement for the company using variable costing.

2. Prepare the current-year income statement for the company using absorption costing.

Vail Book Mart sells books and other supplies to students in a state where the sales tax rate is 8 percent. Vail Book Mart engaged in the following transactions for Year 1. Sales tax of 8 percent is collected on all sales.

1. Book sales, not including sales tax, for Year 1 amounted to $277,000 cash.
2. Cash sales of miscellaneous items in Year 1 were $146,000, not including tax.
3. Cost of goods sold was $212,000 for the year.
4. Paid $129,000 in operating expenses for the year.
5. Paid the sales tax collected to the state agency.

Required
a. What is the total amount of sales tax Vail Book Mart collected and paid for the year?

b. Prepare the journal entries for the preceding transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.):

- Book sales, not including sales tax, for Year 1 amounted to $277,000 cash.

- Cash sales of miscellaneous items in Year 1 were $146,000, not including tax.

- Cost of goods sold was $212,000 for the year.

- Paid $129,000 in operating expenses for the year.

- Paid the sales tax collected to the state agency.

c. What is Vail Book Mart’s net income for the year?