Herman Co. is considering a four-year project that will require an initial investment of $12,000. The base-case cash flows for this project are projected to be $14,000 per year. The best-case cash flows are projected to be $26,000 per year, and the worst-case cash flows are projected to be –$4,500 per year. The company’s analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that there is a 25% probability of the project generating the best-case cash flows and a 25% probability of the project generating the worst-case cash flows.

What would be the expected net present value (NPV) of this project if the project’s cost of capital is 11%?

A. $26,393

B. $22,434

C. $23,754

D. $31,672

Herman now wants to take into account its ability to abandon the project at the end of year 2 if the project ends up generating the worst-case scenario cash flows. If it decides to abandon the project at the end of year 2, the company will receive a one-time net cash inflow of $3,000 (at the end of year 2). The $3,000 the company receives at the end of year 2 is the difference between the cash the company receives from selling off the project’s assets and the company’s –$4,500 cash outflow from operations. Additionally, if it abandons the project, the company will have no cash flows in years 3 and 4 of the project.

Using the information in the preceding problem, find the expected NPV of this project when taking the abandonment option into account.

A. $30,952

B. $29,478

C. $28,004

D. $38,321

What is the value of the option to abandon the project?

*please have this in written form if you can

The Aluminum Association reports that the average American uses 56.8 pounds of aluminum in a year. A random sample of 49 households is monitored for one year to determine aluminum usage. If the population standard deviation of annual usage is 12.1 pounds, what is the probability that the sample mean will be each of the following?

Appendix A Statistical Tables

a. More than 59 pounds
b. More than 57 pounds
c. Between 56 and 57 pounds
d. Less than 53 pounds
e. Less than 47 pounds

On January 8, the end of the first weekly pay period of the year, Regis Company's payroll register showed that its employees earned $23,760 of office salaries and $60,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.20%, FICA Medicare taxes at the rate of 1.45%, $13,560 of federal income taxes, $1,420 of medical insurance deductions, and $780 of union dues. No employee earned more than $7,000 in this first period.

Required:
1.1 Calculate below the amounts for each of these four taxes of Regis Company. Regis’s merit rating reduces its state unemployment tax rate to 4% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%. (Round your answers to 2 decimal places.)

1.2 Prepare the journal entry to record Regis Company's January 8 (employee) payroll expenses and liabilities. (Round your answers to 2 decimal places.)

2. Prepare the journal entry to record Regis’s (employer) payroll taxes resulting from the January 8 payroll. Regis’s merit rating reduces its state unemployment tax rate to 4% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%. (Round your answers to 2 decimal places.)

Selected balance sheet information and the income statement for Fountainhead Corporation for the current year are presented below.

Required:  
Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. (Enter any deductions and cash outflows as a negative value.)

References

Our group incentive option gives us a bonus at the end of the year based on how profitable we were for the year.

      [ Choose ]            Stock Options.            Gainsharing.            Profit Sharing.            Stock Purchasing.      

Our group incentive option plan worked like this. The manager told us that if we could cut cost in our department by 5%, as a group we would get 5% of the savings to the company distributed evenly among us.

      [ Choose ]            Stock Options.            Gainsharing.            Profit Sharing.            Stock Purchasing.      

Our group incentive option allows me to buy company stock for 10% less than the market value.

      [ Choose ]            Stock Options.            Gainsharing.            Profit Sharing.            Stock Purchasing.      

Our group incentive option plan allows me to buy $50 shares of the company stock for only $13 apiece next year.

[ Choose ]            Stock Options.            Gainsharing.            Profit Sharing.            Stock Purchasing.

Northern Illinois Manufacturing is preparing its budget for the coming year. The first step is to plan for the first quarter of that coming year. Northern Illinois gathered the following information from its managers.

Sales:

Northern Illinois wants to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31 totaled 183,780.

Direct Materials:

The product uses metal, plastic, and rubber. In total, each unit requires 2 pounds of material at an average cost of 0.75 per pound.

Northern Illinois likes to keep 5% of the materials needed for the next month in its ending inventory. Payment for materials is made within 15 days. 50% is paid in the month of purchase and 50% is paid in the month after purchase. Accounts Payable on December 31 totaled $120,595. Raw materials on December 31 totaled 11,295 pounds.

Direct Labor:

Labor requires 12 minutes per unit for completion and is paid at a rate of $18 per hour.

Manufacturing Overhead:

Selling and Administrative Expenses:

Variable selling and administrative cost per unit is $2.40.

Fixed selling and administrative costs per month are:

Other Information:

The cash balance on December 31 totaled $220,500, but management has decided that it wants to maintain a cash balance of at least $750,000 beginning January 31. Dividends are paid each month at the rate of $2.50 per share for 5,000 shares outstanding. The company has an open line of credit with the First National Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 8% interest. Northern Illinois borrows on the first day of the month and repays on the last day of the month. Reserve repayment, if required, until Northern Illinois can pay the entire amount. A $250,000 equipment purchase is planned for February.

Instructions (Do all parts):

Note: All budgets and schedules should be prepared by month for the first quarter (January, February, and March). Round all figures to the nearest dollar. For labor hours round to whole hours.

a. Prepare a sales budget.

b. Prepare a production budget.

c. Prepare a direct materials budget.

d. Prepare a direct labor budget.

e. Prepare a manufacturing overhead budget.

f. Prepare a selling and administrative budget.

g. Prepare a schedule for expected cash collections from customers.

h. Prepare a schedule for expected payments for materials purchases.

i. Prepare a cash budget.

Please complete in microsoft excel.

The Aluminum Association reports that the average American uses 56.8 pounds of aluminum in a year. A random sample of 49 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?

Appendix A Statistical Tables

a. More than 60 pounds
b. More than 57 pounds
c. Between 56 and 57 pounds
d. Less than 54 pounds
e. Less than 48 pounds

(Round the values of z to 2 decimal places. Round your answers to 4 decimal places.)

a. enter the probability that the sample mean will be more than 60 pounds

b. enter the probability that the sample mean will be more than 57 pounds

c. enter the probability that the sample mean will be between 56 and 57 pounds

d. enter the probability that the sample mean will be less than 54 pounds

e. enter the probability that the sample mean will be less than 48 pounds

What is the price of a 10-year, $1,000 bond with a 6% coupon rate and semiannual coupons if the bond’s yield to maturity is 9% (APR with semiannual compounding)?

Consider a project with the following cash flows:

Year                     0                 1                      2                      3                      4

Cash Flow      -10,000         4,000               4,000               4,000               4,000

What is the internal rate of return (IRR) of the above project?

Security:         AAA    AA      A         BBB    BB

Yield (%):       5.0       5.5       6.0       6.4       8.0

A mining company needs to raise $100 million in order to begin open pit mining of a coal seam. The company will fund this by issuing 30-year bonds with a face value of $1,000 and a coupon rate of 6%, with the coupons paid annually. The above table shows the yield to maturity for similar 30-year corporate bonds of different ratings. If the mining company's bonds receive an AAA rating, what will be their selling price?