Multiple Choice

• yes; The NPV is $314,960.00

• yes; The NPV is $370,509.74

• no; The NPV is $272,189.10

• yes; The NPV is $244,189.10

• yes; The NPV is $97,042.85

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Write a function that inputs a 4 digit year and outputs the ROMAN numeral year
M is 1,000
C is 100
L is 50
X is 10
I is 1
Test with 2016 and 1989

Swanton Industries is expected to pay a dividend of $5 per year for 10 years and then increase the dividend to $10 per share for every year thereafter. The required rate of return on this stock is 20 percent. What is the estimated stock price for Swanton?

You are buying a house and will borrow $225,000 on a 30-year fixed rate mortgage with monthly payments to finance the purchase. Your loan officer has offered you a mortgage with an APR of 4.3 percent. Alternatively, she tells you that you can “buy down” the interest rate to 4.05 percent if you pay points up front on the loan. A point on a loan is 1 percent (one percentage point) of the loan value. How many points, at most, would you be willing to pay to buy down the interest rate?

An investor is considering purchasing a Treasury bond with a 20 year maturity, an 8% coupon and a 9% required rate of return. The bond pays interest semiannually.

a)What is the bond's modified duration?

b)If promised yields rise 25 basis points immediately after the purchase what is the predicted price change in dollars based on the bond's duration?

(please solve with formula not the macauly duration chart)

You are trying to predict if audit clients will go bankrupt in the next year. Based on the results from a logistic regression, the actual vs predicted numbers for clients is as follows, when using a 50 percent cutoff probability for predicting that a client will go bankrupt:

One of your colleagues, John, suggests that you should use a 70 percent cutoff probability for predicting that a client will go bankrupt.

Another colleague, Mike, suggests that you should use a 30 percent cutoff probability for predicting that a client will go bankrupt.

Answer the following questions:

(a) Who is correct, in this situation? Explain your answer with appropriate logic.

(b) What will happen to the Actual vs Predicted matrix if you use:

(i) 70 percent cutoff probability suggested by John? That is, how would the total numbers in the two columns and two rows change, if at all they change?

(i) 30 percent cutoff probability suggested by Mike? That is, how would the total numbers in the two columns and two rows change, if at all they change?

A one-year, $24,600, 12% note is signed on April 1. If the note is repaid on October 1 of the same year, how much interest expense is incurred? (Do not round intermediate calculations.)

$2,952

$1,476

$1,722

$1,230

The following 12%, $1,000 notes were issued on December 1. Which of the following is the correct method of calculation for the interest accrued as of December 31 of the same year on each of the notes described?

Interest on a 4-month note is calculated as: $1,000 × 12% × 1/12.

Interest on a 3-month note is calculated as: $1,000 × 12% × 1/3.

Interest on a 4-month note is calculated as: $1,000 × 12% × 1/4.

Interest on a 2-year note is calculated as: $1,000 × 12% × 1/24.

In Year 2 a new product is forecast to generate Earnings before Depreciation and Taxes of $30,000. Depreciation Expense associated with the product is $8,000. The company’s tax rate is 30%. Compute the after-tax cash flow for Year 2 using both the Income Statement and Tax Shield methods and show you arrive at the same result.

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

1-a. Compute the throughput time for each month.
1-b. Compute the delivery cycle time for each month.
1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

(Round your answers to 1 decimal place.)

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Evaluate the company’s performance over the last four months. (Indicate the effect of each trend by selecting "Favorable" or  "Unfavorable" or "None" for no effect (i.e., zero variance).

3-a. (Month 5) Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. (Month 6) Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

(Round your answers to 1 decimal place.)

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