Consider a project to supply 100 million postage stamps per year to the USPS for the next five years. To pursue the project, you will need to install $4.1 million in new manufacturing plant and equipment. This will be depreciated straight-line to zero over the project’s five years. The equipment can be sold for $540,000 at the end of the project. You will also need $600,000 in initial net working capital for the project and an additional investment of $50,000 in every year thereafter. All net working capital will be recouped at the end of the project. Your production costs are $.005 per stamp and you have fixed costs of $950,000 per year. If your tax rate is 34% and your required return is 12%, what bid price should you submit on the contract.

Portfolio Beta and Required Return You hold the positions in the table below. A) What is the beta of your portfolio? B) If you expect the market to earn 14 percent and the risk-free rate is 3.0 percent, what is the required return of the portfolio?

Company                             Price                                      Shares                                   Beta

Texas, Inc.                           $30.00                                  200                                        2.8

Dollar Earned Stores       $20.00                                  600                                        2.2

Atomic, Inc.                        $70.00                                  400                                        1.4

Big Truck Corp                   $40.00                                  100                                        -0.6

This problem can be solved two different and equivalent ways. Both ways require the weights of the stocks in the portfolio. In one method, compute the required return for each stock and then use the weights to form the portfolio required return.

The other method uses the weights to compute the portfolio beta. This portfolio beta is used to compute the portfolio required return.

Data concerning Ulwelling Corporation's single product appear below:

Fixed expenses are $1,054,000 per month. The company is currently selling 9,800 units per month.

The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $8 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $100,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 500 units.

Required:

What should be the overall effect on the company's monthly net operating income of this change? (Negative amount should be indicated by a minus sign.)

Question 3

Mr Bean Mart produces and sales four types of toys namely Blaze (B), Pinocchio (P), Paw Patrol (PP) and Scooby (S). Information relating to the production of these toys is given as follows:

             B                     P                      PP                   S

Sales price/ unit                                    $200                 $250                  $180                $400

Materials required per unit                      $100                  $150                 $110                 $220

Direct labour ($10 per hour)                     $40                    $50                  $20                   $60

Variable cost per unit                              $20                    $25                  $10                   $30

Monthly sales demand (Units)                   500                  800                   1 000                400

There is a limit to the availability of labour and only 8 000 hours are available each month.

Requirement:

Determine the production mix that maximises throughput and calculate the resultant throughput of your proposed production mix.

The demand for a perishable item over the next four months is 400, 300, 420, and 380 tons, respectively. The supply capacities for the same months are 500,600, 200, and 300 tons The purchase price per ton varies from month to month and is estimated at $100, $140, $120, and $150, respectively. Because the item is perishable, a current month's supply must be consumed within 3 months (starting with current month). The storage cost per ton per month is $3. The nature of the item does not allow back-ordering. Solve the problem as a transportation model, and determine the optimum delivery schedule for the item over the next 4 months.

A) Formulate the problem as a transportation problem by hand

B) Using the initial solution with the lowest cost use the method of multiplier to fond the optimal solution

Derive the probability distribution of the 1-year HPR on a 30-year U.S. Treasury bond with an 4.0% coupon if it is currently selling at par and the probability distribution of its yield to maturity a year from now is as follows: (Assume the entire 4.0% coupon is paid at the end of the year rather than every 6 months. Assume a par value of $100.) (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" & "%" signs in your response.)

Please fill in the rest.

Aligram Software Ltd has five million shares outstanding and its market price is $61 per share. The company has only two bonds outstanding. Bond A is a 15-year bond issued four years ago, which has a face value of $100 million and a coupon rate of 5%, and is selling for 95% of the par value. Bond B is a five-year bond issued one year ago, which has a face value of $60 million and a coupon rate of 6.5%, and is sel ling for 103% of the par value. Both bonds pay coupon semiannually.

a What are the company’s capital structure weights (both equity and debt) on a market value basis?

b If the cost of equity is 11%, and the tax rate is 15%, what is the company’s Weighted Average Cost of Capital (WACC)?

Hello: Can someone explain the below? I am trying to understand the below.

How does net income and assets vary for each of the below?

1) furniture company sold an unused piece of land next door to their manufacturing facilities. land was purchased for $2M years back and sold for $4M. buyer paid in cash.

2) goodwill was over valued by $25M. Company recorded the entry to adjust goodwill to current value

3) company repurchased $5M of common stock and is holding them as treasury stock

4) company split its common stock 2 for 1 (one share split to 2 shares)

5) company employees exercised 2000 vested stock options with strike price of $100 each

6) company wrote off $2M of accounts receivable.

1- Assume that the following data relative to Rice Company for 2020 is available

Net Income $3,984,000:

Transactions in Common Shares Change Cumulative

Jan. 1,2020 Beginning number 650,000

Apr. 1,2020 Purchase of treasury shares (50,000) 600,000

June 1,2020 100% stock dividend 600,000 1,200,000

Dec 1,2020 Issuance of shares 200,000 1,400,000

5% Cumulative Preferred Stock:

$1,000,000 sold at par on January  1,2020 convertible into 200,000 shares of common stock

Stock options:

Exercisable at the option of $30 per share. Average market price in 2020, $35 and there were 60,000 options outstanding since 2017.

(A) compute the basic earnings per share for 2020. (round to the nearest penny)

(B) compute the diluted earnings per share for 2020. (round to the nearest penny)

The following information is known about a company: its operating assets the current year, 2019, are $700 million and are expected to grow at a rate of 12% per year through 2022. Its operating liabilities are $430 million in 2019 and are expected to grow at a rate of 8% per year through 2022. Its after-tax operating income in 2019 is $30 million and is expected to grow at a rate of 14% per year through 2022. The firm's cost of capital is 8%. There are 14 million shares outstanding. Common stockholders' equity at the end of 2019 is $100 million. Residual operating income is expected to continue to grow at a rate of 7% per year after 2022. If the company's stock price currently trades at a value of $25.00 a share, what is your recommendation and why?