At the end of its third year of operations, the Nusa Manufacturing Company had $4,650,000 in revenue (sales); $3,500,000 in cost of goods sold; $475,000 in total operating expenses; $70,000 in interest expense and had a tax liability equal to 30% of the firm’s taxable income. Construct an income statement for the year and find the net profit?

The real risk-free rate is 2.75%. Inflation is expected to be 1.50% this year and 4.50% during the next 2 years. Assume that the maturity risk premium is zero.

What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places.

What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places.

The Glenn Corporation is considering a four-year project with the following data; What is the project NPV using wacc of 5.4%?

Additional investment in fixed assets but no additional working capital $100,000

Straight-line depreciation rate 25% but zero salvage value after four years

Annual sales revenues (constant for every year) $75,000

Operating costs (excl. depreciation) (also constant) $25,000

Tax rate 21.0%

CSM Corporation has a bond issue outstanding at the end of the year. The bond has 15 years remaining to maturity and carries a coupon interest rate of 6%. Interest on the bond is compounded on a semiannual basis. The par value of the CSM bond is $1,000 and it is currently selling for $874.42. a. Solve for the yield to maturity. Show your work. b. Solve for the price of the bond if the yield to maturity is 2% higher. Show your work. c. Solve for the price of the bond if the yield to maturity is 2% lower. Show your work. d. What can you summarize about the relationship between the relationship between the price of the bond, the par value, the yield to maturity, and the coupon rate?

If asset A is a 10-year Treasury bond which has no default risk and is yielding 4% while asset B is a 15-year Treasury bond with no default risk also yielding 4%, investors would

The present value for a $4,200 investment at 1.10% interest rate is $4,210 in 1 year true or false

If you hear that unemployment increased in the last year by 3.5 percentage points to 8 %it means: Multiple Choice 80 out of every 100 people who want a job can't find one. 35 out of every 100 people lost their job in the last year. 35 out of every 1,000 people lost their job in the last year. 8 out of every 1,000 people who want a job can't find one.

A project will require $511,800 for manufacturing equipment. The equipment is classified as five-year property for MACRS. The project has a three-year life. At the end of the project, the equipment will be worth about 20 percent of what we paid for it. We will have to invest $47,000 in net working capital at the start. After that, net working capital requirements will be 10 percent of sales. All additional investments in net working capital will be recovered at the end of the project. The project is expected to generate annual sales of $965,000 and costs of $508,000. The tax rate is 21 percent and the required rate of return is 14.7 percent. What is the project's IRR?

38.74%

28.36%

45.61%

51.92%

22.69%

Should this project be accepted?

A project will require $511,800 for manufacturing equipment. The equipment is classified as five-year property for MACRS. The project has a three-year life. At the end of the project, the equipment will be worth about 20 percent of what we paid for it. We will have to invest $47,000 in net working capital at the start. After that, net working capital requirements will be 10 percent of sales. All additional investments in net working capital will be recovered at the end of the project. The project is expected to generate annual sales of $965,000 and costs of $508,000. The tax rate is 21 percent and the required rate of return is 14.7 percent. What is the change in net working capital in Year 1?

$54,200

$47,000

$78,300

$96,500

$49,500