Fortune Company is considering a 3-year project with an initial cost of $594,000. The project will not directly produce any sales but will reduce operating costs by $153,000 a year. The equipment is classified as MACRS 7-year property. The MACRS table values are .1429, .2449, .1749, .1249, .0893, .0892, .0893, and .0446 for Years 1 to 8, respectively. At the end of the project, the equipment will be sold for an estimated $288,000. The tax rate is 25 percent and the required return is 12 percent. An extra $44,500 of inventory will be required for the life of the project. What is the total cash flow for Year 3?

You are the manager of a firm that receives revenues of $50,000 per year from product X and $80,000 per year from product Y. The own price elasticity of demand for product X is -3, and the cross-price elasticity of demand between product Y and X is 1.8.

How much will your firm's total revenues (revenues from both products) change if you increase the price of good X by 2 percent?

Instructions: Enter your response rounded to the nearest dollar. Use a negative sign (-) if applicable.

A company had the following information available for the year: Beginning inventory of goods in process (40% complete, $1,100), ending inventory of goods in process (80% complete) 400 units, total units started during the year 3,200 units. What is the number of units transferred to finished goods during the year? b)FIFO equivalent units of production for the year are?

Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company’s present selling price is $99 per unit, and variable expenses are $69 per unit. Fixed expenses are $837,600 per year. The present annual sales volume (at the $99 selling price) is 25,200 units.

Required:

1. What is the present yearly net operating income or loss?

2. What is the present break-even point in unit sales and in dollar sales?

3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?

4. What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)?

• Break-even point in units 41,880 Break-even point in dollar sales $3,727,320

Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budgeted cash flows:

The company’s beginning cash balance for the upcoming fiscal year will be $25,000. The company requires a minimum cash balance of $10,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded.

Required:

Prepare the company’s cash budget for the upcoming fiscal year. (Cash deficiency, repayments and interest should be indicated by a minus sign.)

1. Draw time lines for (a) a $2000 lump sum cash flow at the end of year 4, (b) an ordinary annuity of $1000 per year for 5 years, and (c) an uneven cash flow stream of -$450, $1000, $650, $850 and $500 at the end of years 0 through 4.
2. What is the future value of an initial $1000 after 5 years if it is invested in an account paying 5% annual interest?
3. What is the present value of $1000 to be received in 4 years if the appropriate interest rate is 5%?
4. We sometimes need to find out how long it will take a sum of money (or anything else) to grow to some specified amount. For example, if a company's sales for 2020 is $1000 and expected to grow at a rate of 10% per year, how long will it take sales to double?
5. If you invested $10,000 in an investment account and you expect it to double in 4 years, what interest rate must it earn?
6. What is the future value of a 5-year ordinary annuity of $1000 if the appropriate interest rate is 5%? What is the present value of the annuity?
7. What is the future value of $1000 after 4 years under 10% annual compounding? Semiannual compounding? Quarterly compounding? Monthly compounding? Daily compounding
8. What is the effective annual rate (EAR or EFF%)? What is the EFF% for a nominal rate of 5%, compounded semiannually? Compounded quarterly? Compounded monthly? Compounded daily?
9. Construct an amortization schedule for a $1,000, 12% annual rate loan with 4 equal installments. What is the annual interest expense for the borrower, and the annual interest income for the lender, during Year 2?
10. Suppose on January 1 you deposit $1000 in an account that pays a nominal, or quoted, interest rate of 12%, with interest added (compounded) daily. How much will you have in your account on October 1, or 9 months later?
11. You want to buy a car, and a local bank will lend you $10,000. The loan would be fully amortized over 6 years (72 months), and the nominal interest rate would be 10%, with interest paid monthly. What is the monthly loan payment?
12. While Mary Corens was a student at the University of Tennessee, she borrowed $20,000 in student loans at an annual interest rate of 5%. If Mary repays $200 per year, then how long (to the nearest year) will it take her to repay the loan?

The patient was a 5-year old male who awoke on the day prior to evaluation with a sore throat and fever. His mother treated him symptomatically with Tylenol, and he stayed home. That night, he slept well, but the next day he awoke still complaining of sore throat and fever, as well as headache and abdominal pain. On physical examination, he had a fever, and his anterior pharynx and tonsils were red. His anterior cervical lymph nodes at the angle of the mandible were enlarged and tender. No skin lesions or rashes were seen. He did not have a cough, runny nose, or conjunctivitis. A rapid antigen test for Group A streptococci (GAS) was taken, and the results were positive. As a result, the clinician prescribed a 10-day course of oral amoxicillin.

Based on his clinical presentation, what organism was most likely causing this patient’s infection? Explain what bacterial virulence factors are important for the development of the sore throat.

Sore throat associated with a macupapular rash is frequently seen with this organism. What is this condition called? What virulence factors are responsible for this rash?

Was antimicrobial therapy necessary in this patient? Explain.

This patient is a risk for noninfectious sequelae. What are they? Describe our current understanding of the pathogenesis of these nonsuppurative sequelae. What bacterial virulence factors are important for the development of these diseases?

(a) If management requires projects to have a 3-year payback, would it accept either of the following two independent projects? Please explain thoroughly the calculations of payback period, by showing precise years of payback. Please show formulas in your calculations. Please do not use excel.

(b) What is the NPV of project B assuming the discount rate is 14%. Please explain thoroughly your calculations. Please show formulas. Please do not use excel.

(c) Sketch the NPV profile for project B. Also indicate the point when the discount rate is 37.01%. Please show thoroughly your calculations. Please explain how to draft a sketch in excel.

It’s the year 1995 and John Smith is staying overnight at a hotel before an important meeting the next morning. He asked the customer service desk to give him a 7 am wake-up call. The probability that he gets the call is 0.9. If he gets the call, the probability that he will arrive for the meeting on time is 0.9. If the call is not given, the probability that he will be on time for the meeting is 0.4.
a) Calculate the probability that John Smith will not arrive on time for the meeting.
b) If John Smith is on time for the meeting, what is the probability that the wake-up call was not made?

I invested $15,000 at the end of each year for 20 years, earning an average of 8% per year, then $20,000 at the end of each year for the next 20 years earning an average of 4 percent per year. I then contacted Annuity Corp. which offers annuities to retirees. If I receive an annual interest rate of 2.5%, how much could I receive at the end of each of the following 20 years if I invested my retirement savings?