Questions
Tyson is considering 2 alternative investments (A and B). The cost of each is $100,000. The...

Tyson is considering 2 alternative investments (A and B). The cost of each is $100,000. The annual net cash flows for the 5 year investment are:

Year Investment A Investment B
1 20,000 $10,000
2 30,000 60,000
3 40,000 60,000
4 40,000 20,000
5 30,000 10,000

Answer the following:

Payback period for Alternative 'A'[Q1] format: x.xx

Payback period for Alternative 'B'[Q2] format: x.xx

NPV for Alternative 'A' at 10% discount rate[Q3] format: $xx,xxx

NPV for Alternative 'B' at 10% discount rate[Q4] format: $xx,xxx

IRR for Alternative 'A'[Q5] format: xx.xx%

IRR for Alternative 'B'[Q6] format: xx.xx%

Profitability Index Alternative 'A'[Q7] format: x.xx

Profitability Index Alternative 'B'[Q8] format: x.xx

In: Accounting

King’s Department Store is contemplating the purchase of a new machine at a cost of $35,370....

King’s Department Store is contemplating the purchase of a new machine at a cost of $35,370. The machine will provide $5,200 per year in cash flow for nine years. King’s has a cost of capital of 11 percent. Use Appendix D for an approximate answer but calculate your final answer using the financial calculator method.

What is the internal rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

In: Finance

The Toyota Camry is one of the best-selling cars in North America. The cost of a...

The Toyota Camry is one of the best-selling cars in North America. The cost of a previously owned Camry depends upon many factors, including the model year, mileage, and condition. To investigate the relationship between the car’s mileage and the sales price for a 2007 model year Camry, the following data show the mileage and sales price for 19 sales (PriceHub website, February 24, 2012). Suppose that you are considering purchasing a previously owned 2007 Camry that has been driven 60,000 miles. What price you would offer to the seller and why?

Include discussion of the scatter diagram, regression equation, test for significant relationship, coefficient of determination, correlation coefficient, interpretation of the slope of the regression equation, 95% prediction interval and the 95% confidence interval of the mean sales price given mileage.

Miles (1000s)

Price ($1000s)

22

16.2

29

16

36

13.8

47

11.5

63

12.5

77

12.9

73

11.2

87

13

92

11.8

101

10.8

110

8.3

28

12.5

59

11.1

68

15

68

12.2

91

13

42

15.6

65

12.7

110

8.3

In: Statistics and Probability

Grouper Co. is building a new hockey arena at a cost of $2,510,000. It received a...

Grouper Co. is building a new hockey arena at a cost of $2,510,000. It received a downpayment of $490,000 from local businesses to support the project, and now needs to borrow $2,020,000 to complete the project. It therefore decides to issue $2,020,000 of 10%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 9%.

Prepare the journal entry to record the issuance of the bonds on January 1, 2019. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

January 1, 2019

Prepare a bond amortization schedule up to and including January 1, 2023, using the effective interest method. (Round answers to 0 decimal places, e.g. 38,548.)



Date


Cash
Paid


Interest
Expense


Premium
Amortization

Carrying
Amount of
Bonds

1/1/19 $ $ $ $
1/1/20
1/1/21
1/1/22
1/1/23

Assume that on July 1, 2022, Grouper Co. redeems half of the bonds at a cost of $1,079,300 plus accrued interest. Prepare the journal entry to record this redemption. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

July 1, 2022

(To record interest)

July 1, 2022

(To record reacquisition)

In: Accounting

If an asset cost $48,000 and has a residual value of $8,000 and a useful life...

If an asset cost $48,000 and has a residual value of $8,000 and a useful life of eight years, the depreciation in the third year, using the double-declining balance method, would be (assume a full year of depreciation in the first year):

a. $5,625

b. $9,000

c. $12,000

d. $6,750

A building was purchased for $250,000 and has a useful life of 20 years, and a residual value of $50,000. After it has been used 4 years, its accumulated depreciation using the straight line method would be (assume a full year of depreciation in the first year):

a. $40,000

b. $50,000

c. $10,000

d. $12,500

Massachusetts Mining Company purchased a gravel pit for $2,800,000. It is estimated that 8 million tons of gravel can be extracted over the pit's useful life, with a residual value of $400,000. If 3 million tons are extracted and sold during the first year, how much depletion expense should be recorded?

a. $1,050,000

b. $1,800,000

c. $1,000,000

d. $900,000

An asset is purchased for $20,000. It has an estimated residual value of $5,000 and an estimated useful life of ten years. After three years of use, the estimated residual value is revised to $4,000. Assuming straight-line depreciation, depreciation expense in year four of use would be (round your answer to the nearest whole dollar):

a. $2,286

b. $1,643

c. $2,100

d. $1,150

In: Accounting

In a random sample of 1313 microwave​ ovens, the mean repair cost was ​$80.0080.00 and the...

In a random sample of

1313

microwave​ ovens, the mean repair cost was

​$80.0080.00

and the standard deviation was

​$15.5015.50.

Using the standard normal distribution with the appropriate calculations for a standard deviation that is​ known, assume the population is normally​ distributed, find the margin of error and construct a

9090​%

confidence interval for the population mean

muμ.

A

9090​%

confidence interval using the​ t-distribution was

left parenthesis 72.3 comma 87.7 right parenthesis(72.3,87.7).

Compare the results.

The margin of error of

muμ

is

​(Round to two decimal places as​ needed.)

A

9090​%

confidence interval for

muμ

is left parenthesis nothing comma nothing right parenthesis .

​(Round to one decimal place as​ needed.)

Compare the results. Choose the correct answer below.

A.The confidence interval found using the standard normal distribution is

narrower thannarrower than

the confidence interval found using the​ student's t-distribution.

B.The confidence interval found using the standard normal distribution is

the same asthe same as

the confidence interval found using the​ student's t-distribution.

C.The confidence interval found using the standard normal distribution is

wider thanwider than

the confidence interval found using the​ student's t-distribution.

D.

The confidence interval found using the standard normal distribution has smaller lower and upper confidence interval limits.

In: Statistics and Probability

Labor is typically 70 percent of the total cost of getting a product to market. Is...

Labor is typically 70 percent of the total cost of getting a product to market. Is that the only reason an entrepreneur should pay attention to labor employment? Explain why.

In: Economics

d) What is the cost of the acquisition if Firm A offers one share of Firm...

d) What is the cost of the acquisition if Firm A offers one share of Firm A for every

three shares of Firm B? (10%)

e) How would the cost of the cash offer and the share offer alter if the expected growth rate of Firm B were not changed by the merger? (explain your calculations). (20%)

f) There are many tools to acquire companies, discuss the difference between leveraged buyout and

management buyout, provide an example.

(15%)

Question 2

As treasurer of Firm A., you are investigating the possible acquisition of Firm B. You have the following data:

  •  You estimate that investors currently expect a steady growth of about 6% in Firm B’ earnings and dividends. Under new management this growth rate would be increased to 8% per year, without any additional capital investment required.

  •  Assume that the cost of equity remains unchanged and the Firm A's equity value also remains unchanged.

Firm A

Firm B

Earnings per share

£8.00

£2.30

Dividend per share

£3.00

£1.20

Number of shares

1,500,000

900,000

Stock price

£90

£30

In: Accounting

Your company is considering the purchase of a new production system with an installed cost of...

Your company is considering the purchase of a new production system with an installed cost of $1,250,000. The cost will be depreciated on a straight-line basis to zero over the five-year life of the project, and the system can be sold at the end of the project for $225,000. It will provide additional revenue of $685,000 in the first year, and the additional revenue is expected to grow 5% per year thereafter. The associated cost of goods sold is estimated to be 30% of revenue, and other operating expenses are estimated to be 23% of revenue. The project will also require an initial working capital investment of $180,000, which will be recovered at the end of the project. If the tax rate is 21% and the required rate of return is 10%, what is the NPV of this project?

Please use excel, this is how I need to answer it and it's confusing to me

In: Finance

A company owns a production machine that cost $5,000 with a salvage value of zero. The...

A company owns a production machine that cost $5,000 with a salvage

value of zero. The machine was just sold for $1,100. Accumulated

depreciation has just been updated and accurately reflects an amount

of $4,000. In good order and form record the necessary General Journal

entry to dispose of the machine

In: Accounting