You are considering starting a company that manufactures motorcycles. You are planning on financing your firm 40% equity and 60% debt. You estimate that your upfront costs will be $5M, and that you will earn an EBIT of $1M per year for the next 12 years.

Ian's Finest motorcycles make motorcycles similar to the ones that you wish to manufacture. They have a CAPM equity beta of 1.9 and a debt to equity ratio of 0.7. The tax rate for both firms is 35%, the riskless rate is 3%, and the expected return on the S&P500 is 15%. Your cost of debt is 6%.

A). What is the asset beta of Ian's Finest motorcycles?

B). What is your unlevered cost of equity?

C). What is your firm’s equity beta?

D). What is your firm’s weighted average cost of capital?

E). What is the NPV of your proposed motorcycle company using the WACC method?

An engineer has designed a valve that will regulate water pressure on an automobile engine. The engineer designed the valve such that it would produce a mean pressure of 7.6 pounds/square inch. The valve was tested on 7 engines and the mean pressure was 7.1 pounds/square inch with a standard deviation of 0.7. Is there evidence at the 0.01 level that the valve does not perform to the specifications? Assume the population distribution is approximately normal.

Step 1 of 5: State the null and alternative hypotheses.

Step 2 of 5:

Find the value of the test statistic. Round your answer to two decimal places.

Step 3 of 5:

Specify if the test is one-tailed or two-tailed.

Step 4 of 5:

Determine the decision rule for rejecting the null hypothesis. Round your answer to three decimal places.

Step 5 of 5:

Make the decision to reject or fail to reject the null hypothesis.

MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $3 per pound and 0.7 direct labor hours at a rate of $16 per hour. Variable manufacturing overhead is charged at a rate of $3 per direct labor hour. Fixed manufacturing overhead is $18,000 per month. The company’s policy is to end each month with direct materials inventory equal to 30% of the next month’s materials requirement. At the end of August the company had 3,280 pounds of direct materials in inventory. The company’s production budget reports the following.

(1) Prepare direct materials budgets for September and October.
(2) Prepare direct labor budgets for September and October.
(3) Prepare factory overhead budgets for September and October.

P5.29 Jeanne Lewis is attempting to evaluate two possible portfolios consisting of the same five

assets but held in different proportions. She is particularly interested in using beta to com-
pare the risk of the portfolios and, in this regard, has gathered the following data.

Portfolio Weights
Asset Asset Beta Portfolio A Portfolio B
1 1.3 10% 30%
2 0.7 30% 10%
3 1.25 10% 20%
4 1.1 10% 20%
5 0.9 40% 20%
Total 100% 100%

a. Calculate the betas for portfolios A and B.

b. Compare the risk of each portfolio to the market as well as to each other. Which port-
folio is more risky?

P5.30 Referring to Problem 5.29, if the risk-free rate is 2% and the market return is 7%, calcu-
late the required return for each portfolio using the CAPM.

i want problem 5.30

A ship is fitted with six-cylinder CI engine of 75 mm bore and 100 mm stroke. The engine has a brake power output of 110 kW at 370 rpm. The volumetric efficiency at this operating condition, referred to ambient conditions, of 1.013 bar and 20˚C is 80%. You have just fitted a mechanically driven supercharger which has isentropic efficiency of 0.7 and the pressure ration of 1.6. The supercharged version of the engine has a volumetric efficiency of 100% referred to supercharged delivery pressure and temperature. It is assumed that the indicated power developed, per unit volume flow rate of induced air at ambient, is the same for normal and supercharged engine. Determine the net increase in brake power to be expected from the supercharged engine. Take the mechanical efficiency of the engine to be 80% in both cases and mechanical efficiency of the drive from the engine to supercharger as 95%.

Suppose you’re eating in yet another restaurant where the dishes are shared at the table and all placed uniformly on a rotating disk-like surface. Model this surface as a thin disk of radius 46.3 cm. Someone else has spun the surface, such that it is initially at an angular speed of 0.4 rev/s. The surface and food has a combined mass of 4.2 kg. The waiter, to show off, throws a new dish of dumplings (mass 0.9 kg) onto the surface at a speed of 0.7 m/s, such that the dish lands on and sticks to the very edge of the surface moving in the same direction as the rotating food. While this is happening, you quickly calculate the final angular speed of the food so that you can predict its location at any time before others have a chance to eat the dumplings. What is this speed, in rad/s?

A horizontal piston assembly contains water. The piston is connected to a shaft, which can apply different forces to the piston as the water is expanded or compressed. Initially the apparatus contains a saturated liquid-vapor mixture of water at .9 bar with quality of 80% and a volume of 1.0 m^3. The shaft is programmed to move following a polytropic processs until the volume doubles and the pressure is 0.7 bar.

A) For the initial state, what percent of the total volume is occupied by vapor?

B) Could Kinetic and potential effects be neglected for the system? Why or Why not?

C) Determine the amount of heat transfer required to accompany the process in kJ

D) For the initial state, calculate the amount of mass present in the vapor phase kg

E) Determine the type of polytrophic process (find n when PV^n= Constant

If you could answer all the question you’d be absolutely amazing

You are considering starting a company that manufactures racing bicycles. You are planning on financing your firm 40% equity and 60% debt. You estimate that your upfront costs will be $5M, and that you will earn an EBIT of $1M per year for the next 12 years.

Lightning Bolt Bikes makes racing bicycles similar to the ones that you wish to manufacture. They have a CAPM equity beta of 1.9 and a debt to equity ratio of 0.7. The tax rate for both firms is 35%, the riskless rate is 3%, and the expected return on the S&P500 is 15%

A.What is the asset beta of Lightning Bolt Bikes and your unlevered cost of equity?

B. What is your firm’s equity beta?

C. What is your firm's weighted average cost of capital?

D. Use WACC method to find NPV of your proposed bicycle company?

MCO Leather manufactures leather purses. Each purse requires 2 pounds of direct materials at a cost of $4 per pound and 0.7 direct labor hours at a rate of $12 per hour. Variable manufacturing overhead is charged at a rate of $2 per direct labor hour. Fixed manufacturing overhead is $13,000 per month. The company’s policy is to end each month with direct materials inventory equal to 40% of the next month’s materials requirement. At the end of August the company had 2,880 pounds of direct materials in inventory. The company’s production budget reports the following. Production Budget September October November Units to be produced 4,800 7,100 6,400 (1) Prepare direct materials budgets for September and October. (2) Prepare direct labor budgets for September and October. (3) Prepare factory overhead budgets for September and October.