Dentaltech Inc. projects the following data for the coming year. If the firm follows the residual dividend model and also maintains its target capital structure, what will its dividend payout ratio be?

b. In the country of Hypothetica, we have the following information for the year 2015:

*Consumption totalled $2 billion, but 25% of this total consisted of goods which were initially sold in 2014.

*A total of $250 million worth of new housing stock was sold.

*Labour wage income was $150 million. *Businesses invested $100 million dollars in new capital (i.e. machinery) stock.

*Businesses also bought $200 million dollars worth of company shares on the stock exchange.

*Foreigners with working visas living in foreign-only households bought $100 million worth of locally made goods and services.

*The government spent $500 million building roads.

*Hypothetica is a closed economy, thus they are no exports and imports.

(i) Calculate and explain how you obtained the figure (i.e. what did you count, and what did you exclude) for Hypothetica’s consumption in 2015

(ii) Calculate and explain how you obtained the figure (i.e. what did you count, and what did you exclude) for Hypothetica’s investment in 2015

(iii) What was Hypothetica’s GDP in 2015 using the expenditure method? Explain your answer

in the fourth quarter of last year, Colditz Company embarked on a major effort to improve productivity. It redesigned products, reengineered manufacturing processes, and offered productivity improvement courses. The effort was completed in the last quarter of the current year. The controller’s office has gathered the following year-end data to assess the results of this effort:

Required

1. Prepare a summary contribution income statement for each of the 2 years, and calculate the change in operating income.

2. Compute the partial operational productivity ratios for each production factor in each year.

3. Compute the partial financial productivity ratios for each production factor in each year.

what is the net present value of a three year $3000 annuity if it currently costs 7200? the discount rate is 5%. A) would you recommend this annuity? briefly explain why or why not. B) How would your answer change if the annuity is paid semiannually $1500 every six months instead? No further calculation required: Briefly explain.

A government wishes to borrow £1 million. It issues a one-year bond at a price of £950,000 at a fixed rate of interest of 5%. Suppose in investors become concerned about a possible default, causing the bond price to fall to £930,000.

1. Calculate the bond yield before and after the fall in the bond price.
2. How will this affect the interest rates that companies and households pay on their debts?
3. What can governments do to prevent a debt default?

Shai Co. is considering a four-year project that will require an initial investment of $12,000. The base-case cash flows for this project are projected to be $12,000 per year. The best-case cash flows are projected to be $20,000 per year, and the worst-case cash flows are projected to be -$1,000 per year. The company’s analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that there is a 25% probability of the project generating the best-case cash flows and a 25% probability of the project generating the worst-case cash flows.

What would be the expected net present value (NPV) of this project if the project’s cost of capital is 13%?

$19,976

$18,977

$20,975

$16,980

Points:

Close Explanation

Explanation:

Shai now wants to take into account its ability to abandon the project at the end of year 2 if the project ends up generating the worst-case scenario cash flows. If it decides to abandon the project at the end of year 2, the company will receive a one-time net cash inflow of $3,000 (at the end of year 2). The $3,000 the company receives at the end of year 2 is the difference between the cash the company receives from selling off the project’s assets and the company’s -$1,000 cash outflow from operations. Additionally, if it abandons the project, the company will have no cash flows in years 3 and 4 of the project.

Using the information in the preceding problem, find the expected NPV of this project when taking the abandonment option into account.

$21,085

$23,194

$24,248

$20,031

Points:

Close Explanation

Explanation:

What is the value of the option to abandon the project? selector 1   

12. A project earns $10,000 a year for five years. The present total value of the project is (using a discount rate of 5.75%):
    a) $50,000
    b) more than $50,000

    c) less than $50,000

13. The NPV of a project is $1,012, using a discount rate of 9.75% p.a. The rate of return on this project is:

    a) 9.75%
    b) more than 9.75% c) less than 9.75%

14. The NPV of a project is 0, using a discount rate of 10%. The rate of return on this project is:

    1. a) 10%

    2. b) more than 10%

    3. c) lessthan10%

15. A machine has a salvage value of $5,000. Using a discount rate of 5% p.a., the present value of the salvage value is:

    a) $5,000
    b) more than $5,000 c) lessthan$5,000

16. The capital cost of a project that lasts for five years is $50,000. Using a discount rate of 2.95%, the annual worth of the capital cost is:
    a) $10,000
    b) more than $10,000

    c) lessthan$10,000

17. A machine has a salvage value of $5,000 after five years. Using a discount rate of 2.95% p.a., the annual worth of the salvage value is:
    a) $1,000
    b) more than $1,000

    c) lessthan$1,000

18. The NAW of a project is 0, using a discount rate of 6%. The rate of return on this project is:

    1. a) 6%

    2. b) more than 6%

    3. c) lessthan6%

Suppose that wages in Miami among the immigrant population are $20,000 a year and everywhere else outside the United States they are $10,000. Suppose the cost of migrating to Miami is proportional to how far someone must travel.   The cost of migrating is M=$36,000+ 20m, where m is the number of miles an immigrant’s origin country is from Miami. Please use this information to answer the following questions.

1. If Colombia is 1,500 miles from Miami, what is the maximum subjective discount factor that a Colombian migrant would have and still choose to immigrate to Miami?

2. If Cuba is 200 miles from Miami, what is the maximum subjective discount factor that a Cuban migrant could have and still choose to immigrate to Miami?

3. Based on the prior two questions should we see more migrants from Cuba or Colombia come to Miami?

Select one:

a. Cuba

b. Columbia

The following information pertains to the first year of operation for Crystal Cold Coolers Inc.:

Required:
Prepare Crystal Cold’s full absorption costing income statement and variable costing income statement for the year. (Do not leave any numeric cells blank, enter a zero wherever required.)