Craig owns a home with a replacement cost of $200,000 that is subject to a $100,000 mortgage held by First Federal as the mortgagee. Craig has the home insured for $160,000 under the HO-3 policy, and First Federal is named as mortgagee under the Mortgage Clause. Assume there is a covered fire loss to the dwelling in the amount of $50,000. To whom would the loss be paid?

ATT is considering a project. The project requires to purchase an equipment with a cost of $1.55 million. The equipment will be depreciated straight-line to a zero book value over the 9-year life of the project. At the end of the project it will be sold for a market value of $240,000. The project will not change sales but will reduce operating costs by $399,000 per year. The project also requires an initial investment of $52,000 in net working capital, which will be recouped when the project ends. The tax rate is 34 percent.

(1) What is the cash flow of the project in year 0 (or at the beginning of the project)?

(2) What is the cash flow of the project in each year from year1 to year 8?

(3) What is the cash flow of the project in year 9 (or the ending year)? [hint: there are 3 cash flow items, for example after-tax salvage value]

(4) What is the project's NPV if the required return is 11.5 percent? [hint: the answer for NPV value is one of the following choices:] A. $215,433 B. $276,945 C. $268,011 D. $225,225 E. $257,703

a) Use the data in the table and calculate the average costs and the marginal cost

b) Discuss the relationship between ATC and MC. Also draw a graph showing both curves.

What is cost of capital? How do you calculate WACC?

Why is it important for a firm to know how to determine their cost of capital?

A machine was purchased and installed in the beginning of year 2019. The estimated cost in the period stated dollars is below. The costs are in current period dollars at the end of the year. For example, 2020 cost is reported in end of year 2020 dollars. An inflation rate applicable to years 2020 and higher of 2.85% was used in the estimation process. What is the machine's Present Worth of costs including purchase amount in 2019 dollars using a real MARR of 9.5%? NOTE: 2019 dollars are the same at beginning for purchase and end of 2019. Cost inflation begins in 2020.

Clearly label your answer

​(Individual or component costs of capital​) Compute the cost of the​ following:

a. A bond that has ​$1,000 par value​ (face value) and a contract or coupon interest rate of 8 percent. A new issue would have a floatation cost of 8 percent of the ​$1,140 market value. The bonds mature in 11 years. The​ firm's average tax rate is 30 percent and its marginal tax rate is 36 percent.

b. A new common stock issue that paid a ​$1.60 dividend last year. The par value of the stock is​ $15, and earnings per share have grown at a rate of 12 percent per year. This growth rate is expected to continue into the foreseeable future. The company maintains a constant​ dividend-earnings ratio of 30 percent. The price of this stock is now ​$23​, but 7 percent flotation costs are anticipated.

c. Internal common equity when the current market price of the common stock is ​$43. The expected dividend this coming year should be ​$3.00​, increasing thereafter at an annual growth rate of 9 percent. The​ corporation's tax rate is 36 percent.

d. A preferred stock paying a dividend of 9 percent on a ​$100 par value. If a new issue is​ offered, flotation costs will be 13 percent of the current price of ​$169.

e. A bond selling to yield 9 percent after flotation​ costs, but before adjusting for the marginal corporate tax rate of 36 percent. In other​ words, 9 percent is the rate that equates the net proceeds from the bond with the present value of the future cash flows​ (principal and​ interest).

An important application of regression analysis in accounting is in the estimation of cost. By collecting data on volume and cost and using the least squares method to develop an estimated regression equation relating volume and cost, an accountant can estimate the cost associated with a particular manufacturing volume. Consider the following sample of production volumes and total cost data for a manufacturing operation.

1. Compute b₁ and b₀ (to 1 decimal).
   b₁
   b₀
   
   Complete the estimated regression equation (to 1 decimal).
   = + x
   
2. What is the variable cost per unit produced (to 1 decimal)?
   $
   
3. Compute the coefficient of determination (to 3 decimals). Note: report r² between 0 and 1.
   r² =
   
   What percentage of the variation in total cost can be explained by the production volume (to 1 decimal)?
   %
   
4. The company's production schedule shows 500 units must be produced next month. What is the estimated total cost for this operation (to the nearest whole number)?
   $

For each of the following, calculate the cost of inventory reported on the balance sheet.

Discuss the various components that are included in the cost of an EHR. Give a list and description of each.