• Use the Internet to research the financial statements of Apple.
• Analyze the cost components of the primary manufacturing process and examine the significance of cost behavior analysis to the company.
• Evaluate the value of using cost behavior analysis to management.

Kolby’s Korndogs is looking at a new sausage system with an installed cost of $655,000. This cost will be depreciated straightline to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $85,000. The sausage system will save the firm $183,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 22 percent and the discount rate is 8 percent, what is the NPV of this project?

1. A firm is solely financed by equity with market value of $50,000 and cost of equity of 10%. It wishes to raise another $50,000 via corporate bonds with cost of debt of 5% and keep it as cash. Hold investment policies fixed.
   1. In a MM world without taxes,
      1. What would the firm value be after debt issuance in a? Firm Value = Equity Value + Debt Value – Cash.
      2. What would be the cost of equity after debt is raised?
      3. What would be the WACC after debt is raised?
   2. In a MM world with taxes of 40%,
      1. What would be the cost of equity after debt is raised?
      2. What would be the additional value created by debt?
      3. What would be the WACC after debt is raised?

GXY Corp. has a WACC of 15%, a cost of debt capital of 5%, and a market value debt-to-equity ratio of 0.10. GXY Corp. is not subject to taxation. Suppose that GXY Corp. increased it market value debt-to-equity ratio to 0.35, What will be the change in GXY Corp’s WACC? Enter your answer as a percent; do not include the % sign. Round your final answer to two decimals.

You are evaluating a proposed expansion of an existing subsidiary located in Switzerland. The cost of the expansion would be SF21 million. The cash flows from the project would be SF5.5 million per year for the next five years. The dollar required return is 12 percent per year, and the current exchange rate is SF1.07. The going rate on Eurodollars is 6 percent per year. It is 3 percent per year on Swiss francs. a. Convert the projected franc flows into dollar flows and calculate the NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer in dollars, not in millions, e.g., 1,234,567.) NPV $ b-1. What is the required return on franc flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Return on franc flows % b-2. What is the NPV of the project in Swiss francs? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer in francs, not in millions, e.g., 1,234,567.) NPV SF b-3. What is the NPV in dollars if you convert the franc NPV to dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer in dollars, not in millions, e.g., 1,234,567.) NPV $

Equipment is purchased at a cost of $80,000. As a result, annual cash revenues are expected to increase by $45,000; annual cash expenses are expected to increase by $12,000; straight-line depreciation is used; the asset has a seven-year life; the salvage value is $10,000. Assume the company is in a 34% tax bracket.

Determine the NPV assuming a minimum required rate of return of 8%?

Please kindly explain in detail how you arrived at your answers especially how you calculate the PV. Thank you

1. Calculate the NPV for the following project if the firm's cost of capital is 8.2%.

A.   $274,698
B.   $342,130
C.   $384,956
D.   $196,999

2.Assuming that the cash flows are reinvested at the company's cost of capital, which is 6.8%, what is the Modified Internal Rate of Return (MIRR) for the following project?

A.   4.127%
B.   9.836%
C.   10.241%
D.   6.507%

3.Calculate the Payback Period for the following investment.

A. 2.875 years
B.   2.325 years
C.   3.625 years
D.   4.175 years

Ms. Tweeter is buying a house with a cost of $350,000. She will make a down payment of $20,000 on the house, and the rest will be paid for with a mortgage loan. Her mortgage loan has an APR of 4.9% compounded semi-annually, with a weekly payment schedule and a time horizon of 20 years. The first payment is due in one week's time. How much principal have you paid off after 5 years?

Global Internet company is looking to expand their operations. They are evaluating their cost of capital based on various financing options. Investment bankers informed them that they can issue new debt in the form of bonds at a cost of 8%, and issue new preferred stocks for the price of $25 per share paying $2.5 dividends per share. Their common stock is currently selling for $20 per share and will pay a dividend of $1.5 per share next year. They expect a growth rate in dividends of 5% per year, and their marginal tax rate is 35%.

1. If Global raises capital using 45% debt, 5% preferred stock, and 50% common stock what is their cost of capital?
2. If Global raises capital using 30% debt, 5% preferred stock, and 65% common stock what is their cost of capital?
3. Evaluate the two finance options and identify which one they should choose? Assess the advantages and disadvantages of your choice?