Jamal and Demetrius are both 25 and plan to invest $5000 each year for the next 40 years for retirement. Jamal plans to invest in the Vanguard Total U.S. Stock Market Fund which he thinks has a "gross" expected annualized return of 8.00%. However, its "net" expense ratio is 7.95% as Vanguard charges a 0.05% expense ratio. Demetrius, by contrast, has chosen an actively-managed fund which also has a "gross" expected annualized return of 8.00%. However, the XYZ Corporation that runs the fund charges a typical 0.75% annual expense ratio so the "net" expected return is 7.25%. How much more is Jamal "expected" to have after 40 years of investing than Demetrius?

The owner of a bicycle repair shop forecasts revenues of $160,000 a year. Variable costs will be $50,000, and rental costs for the shop are $30,000 a year. Depreciation on the repair tools will be $10,000.

a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%.

1. Dollars in minus dollars out.
2. Adjusted accounting profits.
3. Add back depreciation tax shield.

b. Calculate the operating cash flow for the repair shop using the three methods given below:

1. Dollars in minus dollars out.
2. Adjusted accounting profits.
3. Add back depreciation tax shield.

In 2019, a year in which the firm’s revenue increased, the firm’s operating margin increased, but the firm’s net margin decreased. Based on this information, what can you say about the firm’s performance in 2019?

Due to a recession, expected inflation this year is only 3.75%. However, the inflation rate in Year 2 and thereafter is expected to be constant at some level above 3.75%. Assume that the expectations theory holds and the real risk-free rate (r*) is 3.5%. If the yield on 3-year Treasury bonds equals the 1-year yield plus 1.5%, what inflation rate is expected after Year 1? Round your answer to two decimal places.

We are evaluating a project that costs $1,675,000, has a six year life, and has no salvage value. Assume that depreciation is straight line to zero over the life of the project. Sales are projected as 91,000 units per year, price is $35.95 per unit, variable cost is $21.4 per unit, fixed costs are $775,000 per year. Tax rate is 35% and discount rate is 11%.

1) calculate base-case profit, profit with a 100-unit increase or 100-unit decrease, and break-even units

2) how much is base-case NPV? What is changes on NPV with a 100-unit increase in sales?

An investor buys a property for $608,000 with a 25-year mortgage and monthly payments at 8.10% APR. After 18 months the investor resells the property for $667,525. How much cash will the investor have from the sale, once the mortgage is paid off?

operating cash flow. find the operating cash flow for the year for robinson and sons if it had sales of $81,200,000,,, cost of goods of $35,500,000, sales and administrative costs of $6,200,000, depreciation expense of $7,000,000, and a tax rate 0f 30%. the operating cash flow is ....... (round to the nearest dollar)

A company is projected to generate free cash flows of $100 million per year for the next 3 years (FCFF1, FCFF2 and FCFF3). Thereafter, the cash flows are expected to grow at a 3.0% rate in perpetuity. The company's cost of capital is 7.0%. What is your estimate for its enterprise value? Answer in millions, rounded to one decimal place (e.g., $213,456,789 = 213.5).

The JG Investment Bank is about to issue a new series of 10 year bonds. The bonds will have a $1000 face value and will be rated AA by a respected Bond Rating Agency. Currently, the yield to maturity on AA rated bonds is 210 basis points above the yield on similar maturity government bonds. The bonds will make annual coupon payments.  

                                          
a)   If the YTM on 10 year government bonds is 2.8%, what coupon rate should JG choose if it wants the bonds to sell at par?   
                                              
b)   If JG issues 1,500 bonds, how much capital will they raise from the sale?                                          
                                              
c)   Two years later, the YTM on 8 year gov't bonds has risen to 3.2%. If the yield on AA rated bonds is still 210 basis points higher than a gov't bond, what is the new price of the bond?                                                          
                                              
d)   JG's bonds now sell at: (1) a Premium, (2) par, or (3) a discount?