Questions
Managers of a firm are planning to invest $180,000.00 in a new four-year long project to...

Managers of a firm are planning to invest $180,000.00 in a new four-year long project to implement automation in the packaging department. Considering associated risk of the project, the managers are requiring 11% return from this investment. This project is expected to generate future cash flow of $65,000.00 in each year. Find

  1. Net present Value
  2. Internal Rate of Return
  3. Present Value Index
  4. Payback period
  5. Discounted Payback Period

please show the steps Clear without using financial calculator.

Thanks

In: Finance

g) What is the present value of an ordinary annuity of $1,000 per year for 7...

g) What is the present value of an ordinary annuity of $1,000 per year for 7 years discounted back to the present at 10 percent? What would be the present value if it were an annuity due?

h) What is the future value of an ordinary annuity of $1,000 per year for 7 years compounded at 10 percent? What would be the future value if it were an annuity due?

i) You have just borrowed $100,000, and you agree to pay it back over the next 25 years in 25 equal end-of-year payments plus 10 percent compound interest on the unpaid balance. What will be the size of these payments?

j) What is the present value of a $1,000 perpetuity discounted back to the present at 8 percent?

k) Muffin Megabucks is considering two different savings plans. The first plan would have her deposit $500 every six months, and she would receive interest at a 7 percent annual rate, compounded semiannually. Under the second plan she would deposit $1,000 every year with a rate of interest of 7.5 percent, compounded annually. The initial deposit with Plan 1 would be made six months from now and, with Plan 2, one year hence.

(a) What is the future (terminal) value of the first plan at the end of 10 years?

(b) What is the future (terminal) value of the second plan at the end of 10 years?

(c) Which plan should Muffin use, assuming that her only concern is with the value of her savings at the end of 10 years?

(d) Would your answer change if the rate of interest on the second plan were 7 percent?

In: Finance

What is the price of a 25-year sovereign bond with a 4.5 per cent yield with...

  1. What is the price of a 25-year sovereign bond with a 4.5 per cent yield with annual coupons of 3.5 per cent and a £1,000 face value? How do you define a sovereign bond? Take the above bond in and determine what would be the price of this bond if it paid no coupons? How would you define this type of bond? What would be the benefits for a corporation to issue a bond with no coupons?

In: Finance

. A summary of cash flows for Linda's Design Services for the year ended December 31...

.

A summary of cash flows for Linda's Design Services for the year ended December 31 is shown below.

Cash receipts:
Cash received from customers $84,560
Cash received from additional investment by owner 15,100
Cash payments:
Cash paid for expenses $30,910
Cash paid for land 62,810
Cash paid for supplies 370
Drawing 6,730
Cash balance as of January 1 $5,000

Prepare a statement of cash flows for Linda's Design Services for the year ended December 31. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Enter amounts that represent cash outflows as negative numbers using a minus sign.

Linda’s Design Services

Statement of Cash Flows

1

(label)

  

  

2

3

4

5

(label)

6

7

(label)

8

9

10

11

12

13

In: Accounting

The quarterly demand for smartphones at a retailer is as show. Year Quarter Demand 1 I...

The quarterly demand for smartphones at a retailer is as show.

Year

Quarter

Demand

1

I

513

II

932

III

1509

IV

1902

2

I

693

II

1163

III

1857

IV

2469

3

I

846

II

1439

III

2271

IV

3079

4

I

1070

II

1751

III

2785

IV

3613

Forecast the quarterly demand for year 5 using the following models:

  1. 4-week simple moving average.
  2. Simple exponential smoothing with α = 0.1
  3. Trend adjusted exponential smoothing with α = 0.1 and β = 0.1
  4. Linear Regression with seasonality/

In: Statistics and Probability

Midlands Inc. had a bad year in 2019. For the first time in its history, it...

Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 79,000 units of product: net sales $1,580,000; total costs and expenses $1,637,040; and net loss $57,040. Costs and expenses consisted of the following.

Total

Variable

Fixed

Cost of goods sold $972,000 $486,000 $486,000
Selling expenses 517,040 90,000 427,040
Administrative expenses 148,000 56,000 92,000
$1,637,040 $632,000 $1,005,040


Management is considering the following independent alternatives for 2020.

1. Increase unit selling price 25% with no change in costs and expenses.
2. Change the compensation of salespersons from fixed annual salaries totaling $203,000 to total salaries of $36,985 plus a 5% commission on net sales.
3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50.


(a) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to 0 decimal places, e.g. 2,510.)

Break-even point

$Enter the break-even point in dollars rounded to 0 decimal places


(b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to 0 decimal places, e.g. 2,510.)

Break-even point

1. Increase selling price

$Enter a dollar amount

2. Change compensation

$Enter a dollar amount

3. Purchase machinery

$Enter a dollar amount


Which course of action do you recommend? Select an option                                                           Alternative 1Alternative 2Alternative 3

In: Accounting

Midlands Inc. had a bad year in 2019. For the first time in its history, it...

Midlands Inc. had a bad year in 2019. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling 75,000 units of product: net sales $1,500,000; total costs and expenses $1,750,200; and net loss $250,200. Costs and expenses consisted of the following.

Total

Variable

Fixed

Cost of goods sold $1,080,000 $600,000 $480,000
Selling expenses 520,200 95,000 425,200
Administrative expenses 150,000 55,000 95,000
$1,750,200 $750,000 $1,000,200


Management is considering the following independent alternatives for 2020.

1. Increase unit selling price 25% with no change in costs and expenses.
2. Change the compensation of salespersons from fixed annual salaries totaling $198,000 to total salaries of $37,995 plus a 5% commission on net sales.
3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50.


(a) Compute the break-even point in dollars for 2019. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to 0 decimal places, e.g. 2,510.)

Break-even point

$Enter the break-even point in dollars rounded to 0 decimal places


(b) Compute the break-even point in dollars under each of the alternative courses of action for 2020. (Round contribution margin ratio to 3 decimal places e.g. 0.251 and final answers to 0 decimal places, e.g. 2,510.)

Break-even point

1. Increase selling price

$Enter a dollar amount

2. Change compensation

$Enter a dollar amount

3. Purchase machinery

$Enter a dollar amount


Which course of action do you recommend? Select an option Alternative 1Alternative 2Alternative 3

In: Accounting

4) What is the present value of receiving (the sum of) $30,000 next year, $35,000 in...

4) What is the present value of receiving (the sum of) $30,000 next year, $35,000 in two years, and $40,000 in three years if the interest rate is 4%?

In: Finance

You are valuing an investment that will pay you $21,000 per year for the first 9...

You are valuing an investment that will pay you $21,000 per year for the first 9 years, $29,000 per year for the next 12 years, and $68,000 per year the following 16 years (all payments are at the end of each year). Another similar risk investment alternative is an account with a quoted annual interest rate of 13.00% with monthly compounding of interest. What is the value in today's dollars of the set of cash flows you have been offered?

In: Finance

ESTION 1 What is the price of a 4-year coupon bond with a face value of...

ESTION 1
What is the price of a 4-year coupon bond with a face value of $2000 and an 8% annual coupon
rate when the interest rate is 3%?
QUESTION 2
What is the price of a 3-year coupon bond with a face value of $4000 and a 5% annual coupon
rate when the interest rate is 4%?
QUESTION 3
What is the price of a three-year zero-coupon bond with a face value of $2000 when the interest
rate is 6%?
QUESTION 4
Assume the current dividends on a stock are $9 per share, growing at the rate of 5% annually. If
the interest rate is 8%, what is the value of this stock?
QUESTION 5
Assume the current dividends on a stock are $6 per share, decreasing at the rate of 3% annually.
If the interest rate is 7%, what is the value of this stock?

In: Finance