Part A: Ranier Ltd. has just completed its first year of operations on December 31, 20X1. Net income for the year was $570. During the year, equipment costing $800 was purchased when the company paid cash of $640 and issued common shares worth $160. Near the end of the year, equipment costing $60 with accumulated depreciation of $16 was sold for $54. At the end of the year, accounts receivable was $250, accounts payable was $36 and accumulated depreciation was $144. A bank loan of $140 was received during the year to help finance operations. At the end of the year, the bank had been paid $52 including $14 of interest. Based on the above information, please prepare the statement of cash flows for the year ended December 31, 20X1 using the indirect method.

Part B: How does the information in the statement of cash flows help the user of the financial statement?

A travel association reported the domestic airfare (in dollars) for business travel for the current year and the previous year. Below is a sample of 12 flights with their domestic airfares shown for both years.

A. Calculate the test statistic. (Use current year airfare − previous year airfare. Round your answer to three decimal places.)

Calculate the p-value. (Round your answer to four decimal places.)

B. What is the sample mean domestic airfare (in dollars) for business travel for each year?

current$ previous$

C. What is the percentage change in mean airfare for the one-year period? (Round your answer to one decimal place.)

Development cost and timing: $8 million over 2 years

Time period 5 years

Ramp-up cost: $4 million over 1 year, starting 1st quarter of year 2.

Marketing and support cost: $1.6 million/year, starting 3rd quarter of year 2.

Unit production cost: $550/unit.

Sales and Production volume: 20,000 units/year, starting 3rd quarter of year 2

Discount rate: 3 percent per quarter Unit Price: $1200/unit

1) Using Excel Calculate the NPV for the total period. Calculate the PV for the 1st quarter of the 4th year Calculate the PV for the 2nd quarter of 2nd year What decision (Go or No-Go) will you make for this product based on the NPV? If your development cost were to go up by 25% what is your resulting NPV?

City Security is considering a project with an initial fixed asset cost of $5,600,000 which will be depreciated on the MACRS 5-year class over the 5-year of the project. At the end of the project, the book value will be zero and the equipment will be sold for an estimated $2,800,000. The project will not directly produce any sales but will save the firm $1,000,000 per year in pretax operating cost. The system requires an initial investment in net-working capital of $290,000.The tax rate is 35%. What is the after-tax salvage value of the equipment after 5 years? What are the depreciation and operating cash flows of each year i.e. from year 1 to year 5? Show your calculation

Thanks very much

John is looking at several options to fund his son’s 4-year university degree. The university fees of $45,000 a year will have be paid starting 11 years from today. He is analysing an insurance plan that pays out $45,000 a year for 4 years with the first payout 11 years from today. The insurance plan has several payment options:

Option 1 Pay $60,000 today.
Option 2 Beginning 1 year from today, pay $12,000 a year for the next 8 years.
Option 3 Beginning 1 year from today, make payments each year for the next 8 years. The first payment is $11,000 and the amount increases by 5% each year.

Can I have the cash flow time line for these 3 options with regards to calculating present value.

1.Suppose that a 1-year zero-coupon bond with face value $100 currently sells at $91.20, while a 2-year zero sells at $84.28. You are considering the purchase of a 2-year-maturity bond making annual coupon payments. The face value of the bond is $100, and the coupon rate is 6% per year.

a.What is the yield to maturity of the 2-year zero?

b.What is the yield to maturity of the 2-year coupon bond?

c.What is the forward rate for the second year? That is what is f_1,2?

2. Assume you purchase (at par) one 11-year bond with a 6.05 percent coupon and a $1,000 face value. Suppose you are only able to reinvest the coupons at a rate of 4.25 percent. If you sell the bond after 6 years when the yield to maturity is 7.05 percent, what is your realized yield?

(Hint: Think naturally)

On January 1, Year 1, Mudpond Company issued bonds with a $400,000 face value, a stated rate of interest of 5%, and a 10-year term to maturity. The bonds sold for $432,444. Mudpond uses the effective interest method to amortize bond discounts and premiums. The market rate of interest on the date of issuance was 4%. Interest is paid annually on December 31.

REQUIRED:

1. Complete the amortization schedule below:

2. 	Cash Payment	Interest Expense	Amortization	Carrying Value
   1/1/Year 1
   12/31/Year 1
   12/31/Year 2

1. Prepare journal entries to record:
   1. Issuance of bonds on January 1, Year 1.
   2. Payment of interest on December 31, Year 1.
   3. Payment of interest on December 31, Year 2.   

2. Show the impact of these events on the horizontal financial statement model

**please i need full answer to understand this question**
5.43 Assume monetary benefits of an information system of $40,000 the first year and increasing benefits of $10,000 a year for the next five years (year 1=$50,000, year 2=$60,000,
year 3=$70,000, year 4=$80,000, year 5=$90,000).

One-time development costs were $80,000 and recurring costs were $45,000 over the duration of the system's life. The discount rate for the company was 11 percent. Using a six-year time
horizon, calculate the net present value of these costs and benefits. Also calculate the overall return on investment and then present a break-even analysis.

-At what point does breakeven occur?

5.43 Change the discount rate for Problem to12 percent and redo the analysis.

5.43 Change the recurring costs to $40,000 and redo the analysis.