A three-year project will cost $150,000 to construct. This will be depreciated straight line to zero over the three-year life. The project is expected to generate sales of $450,000 per year. It has annual variables costs of $200,000 and annual fixed costs of $100,000 per year. The appropriate tax rate is 25 percent and the required rate of return on the project is 16 percent. Assume that a salvage company will pay $60,000 (before taxes) for the assets at the end of year 3. The project also has an initial net working capital requirement of $40,000, which is fully recoverable when the project ends. Note that the project only depreciates the $150,000 initial cost. The salvage value is excluded from depreciation. What is the project’s net present value (NPV)?

Alberta’s this year due the COVID-19 pandemic. Is there a glimmer in that province's economic outlook? What are your comments on clean energy sector?

Do you know any hydrogen and fuel cell solution providers in Canada? Are they listing companies? Please list their stock this week?

Following are the auditor’s calculation of two key ratios for Audisys Corporation for the current year, previous year, and the percentage change.  The primary purpose of this information is to direct the auditor’s attention to areas requiring greater audit effort.

Required:

1. State whether there is a need to investigate the results further and, if so, the reason for further investigation.

2. State the areas/accounts that would require special emphasis in the audit investigation.

3. What additional tests would be done as part of the investigation?

The Aluminum Association reports that the average American uses 56.8 pounds of aluminum in a year. A random sample of 50 households is monitored for one year to determine aluminum usage. If the population standard deviation of annual usage is 12.1 pounds, what is the probability that the sample mean will be each of the following?

Appendix A Statistical Tables

a. More than 58 pounds
b. More than 57 pounds
c. Between 56 and 58 pounds
d. Less than 55 pounds
e. Less than 47 pounds

You buy a 20-year bond with a coupon rate of 9.6% that has a yield to maturity of 10.6%. (Assume a face value of $1,000 and semiannual coupon payments.) Six months later, the yield to maturity is 11.6%. What is your return over the 6 months?

A bond has a face value of $1,000, a coupon of 5% paid annually, a maturity of 40 years, and a yield to maturity of 8%. What rate of return will be earned by an investor who purchases the bond for $642.26 and holds it for 1 year if the bond’s yield to maturity at the end of the year is 9%?

Interest is compounded annually unless stated otherwise. Payments are at the end of the year unless stated otherwise. All bonds have a face value of $1000. Taxes are 0 unless specified otherwise.

2. A project has a beta of 1.3. The risk-free return is 2% and the return on the market is 12%. The project has an IRR of 14%.

a) If the firm’s cost of capital is 10%, will they take the project using the cost of capital?

b) Using the CAPM to determine project risk, will they take the project?

c) Which method is better for analyzing this project? Why?

Personal Budget

At the beginning of the school year, Priscilla Wescott decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:

a. Prepare a cash budget for September, October, November, and December. Enter all amounts as positive values except cash decrease which should be indicated with a minus sign.

b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?

c. What are the budget implications for Priscilla Wescott?

Priscilla can see that her present plan   sufficient cash. If Priscilla did not budget but went ahead with the original plan, she would be $   at the end of December, with no time left to adjust.

Consider a project with free cash flow in one year of $ 137 comma 236 or $ 177 comma 518​, with either outcome being equally likely. The initial investment required for the project is $ 110 comma 000​, and the​ project's cost of capital is 17 %. The​ risk-free interest rate is 6 %. ​(Assume no taxes or distress​ costs.) a. What is the NPV of this​ project? b. Suppose that to raise the funds for the initial​ investment, the project is sold to investors as an​ all-equity firm. The equity holders will receive the cash flows of the project in one year. How much money can be raised in this waylong dashthat ​is, what is the initial market value of the unlevered​ equity?   c. Suppose the initial $ 110 comma 000 is instead raised by borrowing at the​ risk-free interest rate. What are the cash flows of the levered​ equity, and what is its initial value according to​ M&M? a. What is the NPV of this​ project? The NPV is ​$ nothing

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.