1. After working for three years, you decide to purchase your first home, which has a sales price of $350,000. With $70,000 down payment, what is your monthly mortgage payments for a 30-year loan at an annual interest rate of 4.75%. Assume the payments are made at the end of each period (i.e., ordinary annuity).

a) Calculate the monthly installments

b) Build an amortization table for the life of loan. For each payment, show the beginning loan balance, interest payment, principal payment, and ending balance.

3. Consider the following semiannual bond: Coupon rate = 6.5% Maturity = 20 years Par value = $1,000 Market price = $1,035 Can be called in 8 years at $1,032.5 Can be called in 15 years at par Only put date in 8 years and putable at par value (1) What is the yield to maturity for this bond? (1 point) (2) What is the yield to first call? (1 point) (3) What is the yield to second call? (1 point) (4) What is the yield to worst for this bond? (2 points)

Grant Company leased machinery to Tim Company on July 1, 2015, for a ten-year period expiring June 30, 2025. Equal annual payments under the lease are $150,000 and are due on July 1 of each year. The first payment was made on July 1, 2013. The rate of interest used by Grant and Tim is 9%. The cash selling price of the machinery is $1,050,000 and the cost of the machinery on Grant's accounting records was $930,000. Prepare all of Grant's 2015 journal entries to this lease assuming that it is defined as a sales-type lease.

Tre-Bien, Inc., is a fast-growing technology company. The firm projects a rapid growth of 30 percent for the next two years, then a growth rate of 17 percent for the following two years. After that, the firm expects a constant growth rate of 8 percent. The firm expects to pay its first dividend of $2.45 a year from now. If the required rate of return on stocks with similar risk is 22 percent, what is the current price of the stock? Please show formulas to obtain answers on each part.

Amortization schedule with periodic

payments.

  Moulton Motors is advertising the following deal on a new Honda​ Civic: ​ "Monthly payments of

​$400.40400.40

for the next

6060

months and this beauty can be​ yours!" The sticker price of the car is

$ 18 comma 000$18,000.

If you bought the​ car, what interest rate would you be paying in both APR and EAR​ terms? What is the amortization schedule of the first six​ payments?

If you bought the​ car, what monthly interest rate would you be​ paying?

​(Round to four decimal​ places.)

CPI sells computer peripherals. At December 31, year 1, CPI’s inventory amounted to $600,000. During the first week in January, year 2, the company made only one purchase and one sale. These transactions were as follows.

CPI has a full-time accountant and a computer-based accounting system. It records sales at the gross sales price and purchases at net cost and maintains subsidiary ledgers for accounts receivable, inventory, and accounts payable.

Required:

b. Prepare journal entries to record these transactions, assuming that CPI uses a perpetual inventory system.

c. Compute the balance in the Inventory account at the close of business on January 6.

d. Prepare journal entries to record the two transactions, assuming that CPI uses a periodic inventory system.

e. Compute the cost of goods sold for the first week of January assuming use of the periodic system. (Use your answer to part c as the ending inventory.)

g. Compute the gross profit margin on the January 6 sales transaction.

During the past year, Cindy McGill planted a new vineyard on 150 acres of land that she leases for $31,860 a year. She has asked you, as her accountant, to assist her in determining the value of her vineyard operation.

The vineyard will bear no grapes for the first 5 years (1–5). In the next 5 years (6–10), Cindy estimates that the vines will bear grapes that can be sold for $63,530 each year. For the next 20 years (11–30), she expects the harvest will provide annual revenues of $110,730. But during the last 10 years (31–40) of the vineyard’s life, she estimates that revenues will decline to $72,510 per year.

During the first 5 years, the annual cost of pruning, fertilizing, and caring for the vineyard is estimated at $9,670; during the years of production, 6–40, these costs will rise to $11,010 per year. The relevant market rate of interest for the entire period is 4%. Assume that all receipts and payments are made at the end of each year.

Click here to view factor tables

Button has offered to buy Cindy’s vineyard business by assuming the 40-year lease. On the basis of the current value of the business, what is the minimum price Cindy should accept? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Conch Republic spent $750,000 to develop a prototype for a new smart phone that has all the features of the existing one but adds new features such as wifi tethering. The company has spent a further $200,000 for a marketing study to determine the expected sales figures for the new smart phone. Conch Republic can manufacture the new smart phone for $205 each in variable costs. Fixed costs for the operation are estimated to run $5.1 million per year. The estimated sales volume is 64,000, 106,000, 87,000, 78,000, and 54,000 per year for the next five years, respectively. The unit price of the new smart phone will be $485. The necessary equipment can be purchased for $34.5 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $5.5 million. Net working capital for the smart phones will be 20 percent of sales and will occur with the timing of the cash flows for the year (i.e., there is no initial out-lay for NWC). Changes in NWC will thus first occur in Year 1 with the first year's sales. Conch Republic has a 35 percent corporate tax rate and a required return of 12 percent. Shelly has asked Jay to prepare a report that answers the following questions:

e. How sensitive is the NPV to changes in the price of the new smart phone?

f. How sensitive is the NPV to changes in the quantity sold?

g. Should Conch Republic produce the new smart phone?

During the past year, Julia McGill planted a new vineyard on 150 acres of land that she leases for $30,920 a year. She has asked you, as her accountant, to assist her in determining the value of her vineyard operation. The vineyard will bear no grapes for the first 5 years (1–5). In the next 5 years (6–10), Julia estimates that the vines will bear grapes that can be sold for $64,360 each year. For the next 20 years (11–30), she expects the harvest will provide annual revenues of $110,130. But during the last 10 years (31–40) of the vineyard’s life, she estimates that revenues will decline to $75,170 per year. During the first 5 years, the annual cost of pruning, fertilizing, and caring for the vineyard is estimated at $8,830; during the years of production, 6–40, these costs will rise to $12,050 per year. The relevant market rate of interest for the entire period is 4%. Assume that all receipts and payments are made at the end of each year. Button has offered to buy Julia’s vineyard business by assuming the 40-year lease. On the basis of the current value of the business, what is the minimum price Julia should accept? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Minimum price at which Julia should accept the business?

4. Graph the budget constraints described in each of these situations and explain whether you think there will be a unique utility maximizing bundle if preferences are rational, strictly convex, and strongly monotone. Be sure to show your calculations!

(a) Suppose you are at a small chocolate shop. There are milk chocolate truffles (x) and dark chocolate truffles (y). You have $20 to spend
and both truffles are $2 each. Graph the budget constraint on the graph below.

B)A stressed out student trying to decide where to take yoga classes.
They have $36 to spend on yoga classes this month. At SuperStrength yoga studio (x), the first 4 yoga classes are free. After that, SuperStrength yoga classes are $12 each. At the university gym (y), yoga classes come out to be about $3 per yoga class. Graph the budget constraint on the graph below.

(c) Let the price of a new magic lotion (x) be $4 per ounce for the first 8 1/3 ounces, and then $0.16 per ounce after that. The corresponding face wash (y) has a flat price of $1 per ounce. The consumer has $40 to spend on their new skincare regimen. Graph their budget constraint below.

(d) If the people in parts a-c all had the utility function

u(x, y) = √xy

do you expect there to be a unique utility maximizing bundle for parts
a-c, respectively? Explain.