10. You are offered an annuity that will pay you $200,000 once per year, at the end of the year, for 25 years. The first payment will arrive one year from now. The last payment will arrive twenty five years from now. Suppose your annual discount rate is ?? = 5.25%, how much are you willing to pay for this annuity? (hint: this is the same as the present value of an annuity.)

11. You would like to develop an office building. Your analysts forecast that it will cost you $1,000,000 immediately (time 0), and it will cost you $500,000 in one year (time 1). They forecast you can sell the building for $2,400,000 in two years (time 2). If your discount rate is ?? = 25%, what is the net present value of this investment?

12. What is the IRR of the project in question 12? (hint: if you are using an ordinary calculator, all you need to do is to solve a quadratic equation).

Xenon Corp. makes 63,200 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows:

An outside supplier has offered to sell the company all of the 63,200 parts it needs for $78.50 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $365,750 per year. If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, 63% of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products.

Questions

1. How much of the unit product cost of $83.85 is relevant in the decision of whether to make or buy the part?

my answer= $64.57

2. What is the net total dollar advantage (disadvantage) of purchasing the part rather than making it?

my answer= $-514,500

3. Should Xenon continue to manufacture the part or buy it?

4. What effect do fixed costs have on the answer you gave for Question 3?

5. What would have to happen to fixed costs for your answer to Question 3 to be different?

6. What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 63,200 units required each year?

my answer= $70.36

I feel like my answers so far are correct, but would like to make sure. Help with the other question are much appreciated.

1. Find the price of a three year, 7% coupon bond that is yielding 6%. The principal is 1000

2. Timco bonds are currently valued at 1015. They have 4 years until maturity and the coupon rate is 4%. What is the yield?

3. Last year Timco paid a 2 dividend. We think that next year they will pay a 2.26 dividend. What is Timco's capital gains yield?

Presented below are a number of balance sheet items for Shamrock, Inc., for the current year, 2017.

Prepare a classified balance sheet in good form. Common stock authorized was 400,000 shares, and preferred stock authorized was 20,000 shares. Assume that notes receivable and notes payable are short-term, unless stated otherwise. Cost and fair value of debt investments (trading) are the same. (List Current Assets in the order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment.)

. The following events apply to the first year of operations for Mestro Financial Services Company:

1. Acquired $28,000 cash by issuing common stock on January 1, 2018.

2. Purchased $1,000 of supplies on account.

3. Paid $12,000 cask in advance for a one-year lease on office space.

4. Earned $23,000 of consulting revenue on account.

5. Incurred $16,000 of general operating expenses on account.

6. Collected $20,000 cash from receivables.

7. Paid $13,000 cash on accounts payable.

8. Paid a $1,000 cash dividend to stockholders.

9. There was $200 of supplies on hand.

10. The one-year lease on the office space was effective beginning on October 1, 2018.

11. There was $1,200 of accrued salaries at the end of 2018.

Required:

A. Record the preceding events in general journal format.

B. Post the transaction data from the general journal into general ledger T-accounts.

C. Prepare an adjusted trial balance.

D. Prepare an income statement, statement of changes in stockholders’ equity, balance sheet, and statement of cash flows.

E. Prepare the appropriate closing entries in general journal format.

Consider an asset that costs $130 today. You are going to hold it for 1 year and then sell it. Suppose that there is a 25 percent chance that it will be worth $90 in a year, a 25 percent chance that it will be worth $130 in a year, and a 50 percent chance that it will be worth $160 in a year.

Instructions: In parts a, b, and d round your answers to 2 decimal places. If you are entering any negative numbers, be sure to include a negative sign (-) in front of those numbers.

a. What is its average expected rate of return?

b. Next, figure out what the investment’s average expected rate of return would be if its current price were $140 today.  

c. Does the increase in the current price increase or decrease the asset’s average expected rate of return?

   Increase or Decrease

d. At what price would the asset have a zero average expected rate of return?

     $

Mason Corporation began operations at the beginning of the current year. One of the company’s products, a refrigeration element, sells for $205 per unit. Information related to the current year’s activities follows.

Mason carries its finished goods inventory at the average unit cost of production and is subject to a 30 percent income tax rate. There was no work in process at year-end.

2. Compute Mason’s net income for the current year ended December 31.

Suppose there is a 3-year bond with a $1000 face value, 12% coupon payments and a 6% yield to maturity.

a) Without any calculation, briefly explain whether this bond will be selling a premium or a discount.

b) Calculate the price of this bond.

c) Calculate the duration of this bond.

d) If someone buys this bond and holds it for three years, what is their rate of return?

e) Suppose after one year, interest rates in the economy fall by 2%. If the person that bought this bond sells it at that time, what would be their rate of return? (Hint: First think about what the fall in interest rates will do to the bond’s price and then think about the rate of return.)

A 28 year old is admitted to the hospital following a car accident in which several bones were broken and third-degree burns (15% body surface area[BSA]) were suffered. The patient is able to consume solid foods but is frequently out of the hospital room for diagnostic tests or therapy when the food trays arrive. The effect on the patient's nutritional status would be:

The Aluminum Association reports that the average American uses 56.8 pounds of aluminum in a year. A random sample of 51 households is monitored for one year to determine aluminum usage. If the population standard deviation of annual usage is 12.4 pounds, what is the probability that the sample mean will be each of the following?

a. More than 59 pounds
b. More than 56 pounds
c. Between 55 and 57 pounds
d. Less than 53 pounds
e. Less than 49 pounds