You are evaluating a project that is expected to produce cash flows of $5,000 each year for the next 3 years and $7,000 each year for the following 3 years. The IRR of this 6-year project is 12%. If the firm’s WACC is 10%, what is the project’s NPV?

ASK YOUR TEACHER

According to a survey conducted in a certain year by the Federal Communications Commission (FCC) of 3005 adults who were home broadband users, 31.5% of those surveyed had switched their service over the past 3 years. Of those who had switched service in the past 3 years, 53% were very satisfied, 37% were somewhat satisfied, and 10% were not satisfied with their service. Of the 68.5% who had not switched service in the past 3 years, 46% were very satisfied, 43% were somewhat satisfied, and 11% were not satisfied with their service.

(a) What is the probability that a participant chosen at random had not switched service in the past 3 years and was very satisfied with their service?


(b) What is the probability that a participant chosen at random was not satisfied with their service?

Consider a five-year bond with a 10% coupon selling at a yield to maturity of 8%. If interest rates remain constant, one year from now the price of this bond will be:

A. Higher

B. Lower

C. The same

D. Par

a.) As of the end of the accounting period, December 31, Year 1, Great Plains Company has assets of $900,000 and liabilities of $300,000. During Year 2, stockholders invested an additional $75,000 in Great Plains Company and received $30,000 in dividends from Great Plains Company.

What is the amount of net income during Year 2, assuming that as of December 31, Year 2, assets were $995,000 and liabilities were $200,000?

b.) A firm hired an employee that will make $100 per day, and will be paid on the 1st and 15th of every month. Assume the employee works 10 days in each pay period.

Which of the following adjusting entries (if any) should the firm make at the end of each month assuming that the employee works the full 10 days in each pay period?

THE GAP INC.

1. (*) Compare the company’s cash position (The Gap Inc) for the year under review with that of the previous year (2020/2019). 2. Comment on the improvement or deterioration of the company’s cash position. 3. (*) Which method (direct or indirect) did the company use in the preparation of its statement of cash flows? 4. (*) State the main sources of cash inflow during the year and the main uses to which cash has been used.

A professional football team is preparing its budget for the next year. One component of the budget is the revenue that they can expect from ticket sales. The home venue, Dylan Stadium, has five different seating zones with different prices. Key information is given below. The demands are all assumed to be normally distributed. Seating Zone Seats Available Ticket Price Mean Demand Standard Deviation

seat zones - Seat availability - Ticket Price - Mean demand - standard deviation.

First Level Sideline 15,000 $100.00 14,500 750

Second Level 5,000 $90.00 4,750    500

First Level End Zone 10,000 $80.00 9,000 1,250

Third Level Sideline 21,000 $70.00 17,000 2,500

Third Level End Zone 14,000 $60.00 8,000 3,000

Determine the distribution of total revenue under these assumptions using an Excel data table with 50 simulated trials. Summarize your results with a histogram.

a.) As of the end of the accounting period, December 31, Year 1, Great Plains Company has assets of $900,000 and liabilities of $300,000. During Year 2, stockholders invested an additional $75,000 in Great Plains Company and received $30,000 in dividends from Great Plains Company.

What is the amount of net income during Year 2, assuming that as of December 31, Year 2, assets were $995,000 and liabilities were $200,000?

b.) A firm hired an employee that will make $100 per day, and will be paid on the 1st and 15th of every month. Assume the employee works 10 days in each pay period.

Which of the following adjusting entries (if any) should the firm make at the end of each month assuming that the employee works the full 10 days in each pay period?

A firm is considering investing in a 15-year capital budgeting project with a net investment of $14 million. The project is expected to generate annual net cash flows each year of $2 million and a terminal value at the end of the project of $10 million. The firm’s cost of capital is 9 percent and marginal tax rate is 40%. What is the profitability index of this investment?

What corporate governance issues that AMAZON faces and how they are addressed in the current year?