ABC Company is considering the acquisition of a new piece of equipment to
replace an old, outdated machine currently used in its business operations.
The new equipment would cost $135,000 and is expected to last 9 years. The
new equipment would require a repair of $25,000 in year four and another
repair costing $80,000 in year eight. Purchasing this new equipment would
require an immediate investment of $30,000 in working capital which would
be released for investment elsewhere at the end of the 9 years. The new
equipment is expected to have a $10,000 salvage value at the end of nine
years. The new equipment is expected to generate a cost savings of $60,000
per year. ABC Company has a cost of capital of 16% and an income tax rate
of 40%.

Calculate the net present value (NPV) of the new equipment. If your answer
is negative, place a minus sign in front of your answer with no spaces in
between (e.g., -1234).

Which one of the following would NOT result in incremental cash flows and thus should NOT be included in the capital budgeting analysis for a new product?

A. Using some of the firm's high-quality factory floor space that is currently unused to produce the proposed new product. This space could be used for other products if it is not used for the project under consideration.

B. Revenues from an existing product would be lost as a result of customers switching to the new product.

C. Shipping and installation costs associated with a machine that would be used to produce the new product.

D. The cost of a study relating to the market for the new product that was completed last year. The results of this research were positive, and they led to the tentative decision to go ahead with the new product. The cost of the research was incurred and expensed for tax purposes last year.

E. It is learned that land the company owns and would use for the new project, if it is accepted, could be sold to another firm.

Photochronograph Corporation (PC) manufactures time series photographic equipment. It is currently at its target debt–equity ratio of .69. It’s considering building a new $65.9 million manufacturing facility. This new plant is expected to generate aftertax cash flows of $7.84 million in perpetuity. There are three financing options:

1) A new issue of common stock: The required return on the company’s new equity is 15.1 percent.

2) A new issue of 20-year bonds: If the company issues these new bonds at an annual coupon rate of 7.4 percent, they will sell at par.

3) Increased use of accounts payable financing: Because this financing is part of the company’s ongoing daily business, the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long-term debt of .12. (Assume there is no difference between the pretax and aftertax accounts payable cost.)

If the tax rate is 40 percent, what is the NPV of the new plant?

1. (20 pts) In the following code inside a try block, what kind of object is passed to the Scanner constructor?

Scanner file = new Scanner ( new File (“test.txt”));

2. (20 pts) What is the output of this code sequence?

Scanner parse = new Scanner (“A 1 B 2 C 3 D”);

while (parse.hasNext())

    System.out.print(parse.next());

3. (20 pts) What is wrong with following code?

try

{

Scanner file = new Scanner(new File(“c:\docs\data.txt”));

int n = 0;

while (file.hasNext())

{

String s = file.nextLine();

if (s.equals(“A”))

      n++;

}

System.out.println(“The value of n is “ +n);

file.close();

}

catch(IOException ioe)

{

ioe.printStackTrace();

}

4. (40 pts) You coded the following class:

try

{

   Scanner file = new Scanner( new File(“test.txt”));

   String s = file.nextLine();

}
catch (FileNotFoundException fnf)

{

System.out.println(fnf.getMessage());

}

Will this code work correctly? If not how do you fix it.

Pompeii's Pizza has a delivery car that it uses for pizza deliveries. The transmission needs to be replaced and there are several other repairs that need to be done. The car is nearing the end of its life, so the options are to either overhaul the car or replace it with a new car. Pompeii's has put together the following budgetary items:

If Pompeii’s replaces the transmission of the pizza delivery vehicle, they expect to be able to use the vehicle for another 5 years. If they sell the old vehicle and purchase a new vehicle, they will use that vehicle for 5 years and then trade it in for another new pizza delivery vehicle. If they trade for the new delivery vehicle, their operating expenses will decrease because the new vehicle is more gas efficient and the maintenance on a new car is less. This project is analyzed using a discount rate of 10%.

A. Calculate the NPV on both Cars. Round your present value factor to three decimal places and the rest to nearest dollar.

B. What should Pompeii’s do?

Pompeii’s should .

You may need to use the appropriate appendix table or technology to answer this question.

According to the National Association of Colleges and Employers, the 2015 mean starting salary for new college graduates in health sciences was $51,541. The mean 2015 starting salary for new college graduates in business was $53,901. † Assume that starting salaries are normally distributed and that the standard deviation for starting salaries for new college graduates in health sciences is $11,000. Assume that the standard deviation for starting salaries for new college graduates in business is $17,000.

(a)

What is the probability that a new college graduate in business will earn a starting salary of at least $65,000? (Round your answer to four decimal places.)

(b)

What is the probability that a new college graduate in health sciences will earn a starting salary of at least $65,000? (Round your answer to four decimal places.)

(c)

What is the probability that a new college graduate in health sciences will earn a starting salary less than $46,000? (Round your answer to four decimal places.)

(d)

How much would a new college graduate in business have to earn in dollars in order to have a starting salary higher than 99% of all starting salaries of new college graduates in the health sciences? (Round your answer to the nearest whole number.)

$

Pompeii's Pizza has a delivery car that it uses for pizza deliveries. The transmission needs to be replaced and there are several other repairs that need to be done. The car is nearing the end of its life, so the options are to either overhaul the car or replace it with a new car. Pompeii's has put together the following budgetary items:

If Pompeii’s replaces the transmission of the pizza delivery vehicle, they expect to be able to use the vehicle for another 5 years. If they sell the old vehicle and purchase a new vehicle, they will use that vehicle for 5 years and then trade it in for another new pizza delivery vehicle. If they trade for the new delivery vehicle, their operating expenses will decrease because the new vehicle is more gas efficient and the maintenance on a new car is less. This project is analyzed using a discount rate of 10%.

(Click here to see present value and future value tables)

A. Calculate the NPV on both Cars. Round your present value factor to three decimal places and the rest to nearest dollar.

Photochronograph Corporation (PC) manufactures time-series photographic equipment. It is currently at its target debt? equity ratio of .65. It’s considering building a new $58 million manufacturing facility. This new plant is expected to generate after-tax cash flows of $4.9 million in perpetuity. The company raises all equity from outside financing. There are three financing options:

1. A new issue of common stock: The flotation costs of the new common stock would be 6.5percent of the amount raised. The required return on the company’s new equity is 10 percent.

2. A new issue of 20-year bonds: The flotation costs of the new bonds would be 2.1 percent of the proceeds. If the company issues these new bonds at an annual coupon rate of 4 percent, they will sell at par.

3. Increased use of accounts payable financing: Because this financing is part of the company’s ongoing daily business, it has no flotation costs, and the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long-term debt of .10. (Assume there is no difference between the pre-tax and after-tax accounts payable cost.)

What is the NPV of the new plant? Assume that PC has a 21 percent tax rate.

NPV $

PYTHON Define a function named variousChanges(...) which receives one string (origst) (with letters, digits or special characters), possibly empty, and returns a new string containing the following.

a) in those positions where the original string has an even digit, the corresponding character in the new (returned) string should have the string digit '0'
b) in those positions where the original string has a vowel letter (upper or lower case), the new (returned) string should have the letter 'V'. Note that the vowels are : 'a', 'e', 'i', 'o', 'u'
c) any other position in the new (returned) string should have a star ('*')

AND
d) at the end of the new string, there should be a number attached, which is the number of upper case letters in the original string.

For example,
variousChanges("A>e>X34S") should return the string "V*V***0*3" because:

'A' (in position 0) and 'e' (in position 2) are vowels --- so the new string has a 'V' in those positions
'4' (in position 6) is an even digit --- so the new string has a '0' in that position
all other positions have '*' in the new string
'A' , 'X' and 'S' are three upper case letters in the original string --- so the new string has a 3 at the end

Retlaw Corporation (RC) manufactures time series photographic equipment. It is currently at its target debt/equity ratio of 0.74. It’s considering building a new $48 million manufacturing facility. This new plant is expected to generate after-tax cash flows of $8.4 million in perpetuity. The company raises all equity from outside financing. There are three financing options: 1. A new issue of common stock: The flotation costs of the new common stock would be 7 percent of the amount raised. The required return on the company’s new equity is 14 percent. 2. A new issue of 20-year bonds: The flotation costs of the new bonds would be 4 percent of the proceeds. If the company issues these new bonds at an annual coupon rate of 8.0 percent, they will sell at par. 3. Increased use of accounts payable financing: Because this financing is part of the company’s ongoing daily business, it has no flotation costs, and the company assigns it a cost that is the same as the overall firm WACC. Management has a target ratio of accounts payable to long-term debt of 0.135. (Assume there is no difference between the pre-tax and after-tax accounts payable cost.) What is the NPV of the new plant? Assume that RC has a 45 percent tax rate