Star Industries owns and operates landfills for several municipalities throughout the Midwestern part of the U.S. Star typically contracts with the municipality to provide landfill services for a period of 20 years. The firm then constructs a lined landfill (required by federal law) that has the capacity for five years. The $9.4 million expenditure required to construct the new landfill results in negative cash flows at the end of years 5, 10, and 15. This change in sign on the stream of cash flows over the 20-year contract period introduces the potential for multiple IRRs, so Star's management has decided to use the MIRR to evaluate new landfill investment contracts. The annual cash inflows to Star begin in year 1 and extend through year 20 are estimated to equal $3.1 million (this does not reflect the cost of constructing the landfills every five years). Star uses a 9.4 % discount rate to evaluate its new projects, so it plans to discount all the construction costs every five years back to year 0 using this rate before calculating the MIRR.

a. What are the project's NPV, IRR, and MIRR?

b. Is this a good investment opportunity for Star Industries? Why or why not?

On January 1, 2018, Cameron Inc. bought 20% of the outstanding common stock of Lake Construction Company for $340 million cash. At the date of acquisition of the stock, Lake's net assets had a fair value of $900 million. Their book value was $850 million. The difference was attributable to the fair value of Lake's buildings and its land exceeding book value, each accounting for one-half of the difference. Lake’s net income for the year ended December 31, 2018, was $270 million. During 2018, Lake declared and paid cash dividends of $30 million. The buildings have a remaining life of 5 years.

Required:
1. Complete the table below and prepare all appropriate journal entries related to the investment during 2018, assuming Cameron accounts for this investment by the equity method.
2. Determine the amounts to be reported by Cameron.

Listed below are several terms and phrases associated with property, plant, and equipment and intangible assets. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.

Given the new found interest in nuclear power plants due to potential carbon taxes, you consider starting a company to build a nuclear power plant. Before you can build the plant, you need to gather permits, fight lawsuits and so forth. That will cost $800 million today and take 5 years to resolve with a 35% probability of success. If you build the plant, you must pay $9 billion the day you start building the plant, which is immediately after the lawsuits etc are resolved. The power plant itself takes 4 years to build. At that point the plant starts operating (exactly 4 years from when construction started). You receive $1 billion per year for 50 years starting one year from when the plant starts operating. At the end of the project, you have to pay $3 billion to shut down the plant. Your discount rate is 6% (annual rate, annual compounding).

Assume that you made the $800 million investment and the 5 years of permits, lawsuits and so forth have passed. The $800 million investment was successful. Now you are debating if you should make the plant or not today. What is the NPV of the plant?

​(MIRR)  Star Industries owns and operates landfills for several municipalities throughout the Midwestern part of the U.S. Star typically contracts with the municipality to provide landfill services for a period of 20 years. The firm then constructs a lined landfill​ (required by federal​ law) that has capacity for five years. The ​$9.6 million expenditure required to construct the new landfill results in negative cash flows at the end of years​ 5, 10, and 15. This change in sign on the stream of cash flows over the​ 20-year contract period introduces the potential for multiple​ IRRs, so​ Star's management has decided to use the MIRR to evaluate new landfill investment contracts. The annual cash inflows to Star begin in year 1 and extend through year 20 are estimated to equal ​$3.5 million​ (this does not reflect the cost of constructing the landfills every five​ years). Star uses a 10.4​% discount rate to evaluate its new​ projects, so it plans to discount all the construction costs every five years back to year 0 using this rate before calculating the MIRR.

a.What are the​ project's NPV,​ IRR, and​ MIRR?

b.Is this a good investment opportunity for Star​ Industries? Why or why​ not?

Square Manufacturing is considering investing in a robotics manufacturing line. Installation of the line will cost an estimated $10.5 million. This amount must be paid immediately even though construction will take three years to complete (years 0, 1, and 2). Year 3 will be spent testing the production line and, hence, it will not yield any positive cash flows. If the operation is very successful, the company can expect after-tax cash savings of $7.5 million per year in each of years 4 through 7. After reviewing the use of these systems with the management of other companies, Square’s controller has concluded that the operation will most probably result in annual savings of $4.9 million per year for each of years 4 through 7. However, it is entirely possible that the savings could be as low as $3.3 million per year for each of years 4 through 7. The company uses a 14 percent discount rate. Use Exhibit A.8.

Required:

Compute the NPV under the three scenarios. (Round PV factor to 3 decimal places. Enter your answers in thousands of dollars. Negative amounts should be indicated by a minus sign.)

During 2019, Brent Industries, Inc. constructed a new manufacturing facility at a cost of $12,000,000. The weighted average accumulated expenditures for 2019 were calculated to be $5,750,000. The company had the following debt outstanding at December 31, 2019:

(a) 7 percent, five-year note to finance construction of the manufacturing facility, dated January 1, 2019, $4,000,000.

(b) 9 percent, 20-year bonds issued at par on April 30, 2015, $8,400,000.

(c) 7 percent, six-year note payable, dated March 1, 2017, $1,800,000.

Required:

1. Determine the amount of interest that should be capitalized in 2019 assuming that the facility is completed at the end of 2019. DON'T NEED

2. Show the most likely journal entry to record the capitalized interest assuming that Brent recorded all interest as expense when paid or accrued. DON'T NEED

3. Give the journal entry to record depreciation on the facility in 2020 assuming a 25 year useful life and no salvage value.

4. Give the journal entry to sell the manufacturing facility at the end of 2030 for $7 million in cash.

I have the answers to 1&2 - I just need 3&4 please. Thanks!

In general, Medicare pays hospitals

Question options:

Which of the following is true about the source of insurance?

Question options:

Which of the following is true of the Medicare program?

Question options:

Which of the following is true?

Question options:

Which of the following is true?

Question options:

Which of the following are NOT insurance products commonly offered in the United States?

Question options:

Construct an Excel Spreadsheet running debt to equity levels from 0% to 70% in increments of 1% and determine the optimal capital structure for the firm given the information in the problem below. Submit in readable formatted Excel that shows formulas or allows me to click on cells to see formulas.

Ruby Slippers Co. sells shoes in the Land of Oz. The demand for shoes is always stable; each of the 555 citizens buys 1 pair of shoes each year, for $99. The company incurs production costs of $77 / pair of shoes, and pays a $9999 yearly salary to its CEO, Dorothy. There is no inflation and the demand for the shoes is expected to continue forever, with the same cost structure. The company is financed by all equity, the risk free rate in the Land of Oz is 4%, the market return is 10%, and the firm's equity beta is 1.
The Wizard of Oz has decided to introduce a 35% corporate tax rate starting tomorrow. Dorothy would like your help in determining the optimal amount of debt financing under the new corporate tax law. She obtained the following information about the cost of debt from the Yellow Brick Bank:

Percent of debt financing
Interest rate
0-19%
6%
20-29%
6.1%
30-34%
6.2%
35-39%
6.3%
40-44%
6.8%
45-49%
7.2%
50-54%
7.5%
55-59%
8%
60-64%
8.5%
65-69%
9%
70-75%
9.5%

Prepare a table that analyses the effect of leverage on the cost of capital and firm value for various debt financing percentages (e.g. by 1% increments). Ruby Slippers plans on rearranging its capital structure by borrowing debt and repurchasing equity, e.g. not by adding additional financing on top of the equity it has now. First, calculate the change in beta for the corporation's equity given by BetaL = BetaU X [1 + (1-T) X (D/S)]. Where T is the tax rate, D is the percentage of Debt, and S is the percentage of equity. Then proceed to calculate the required return on equity, the firm's WACC, the firm's value, and the dollar amount of debt and equity in the firm. Also calculate the effect of leverage on EBT and Net Income. Compute the present value of interest tax shield and the financial distress costs (implied financial distress costs=VL - VU - PV(Tax shield)). Plot the firm value and the cost of capital (for debt, equity, and the firm) in two charts as a function of leverage.
What is the optimum leverage for Ruby Slippers?

1. D Corp uses the FIFO method in its process costing system. This month, the beginning inventory in the first processing department consisted of 510 units. The costs and percentage completion of these units in beginning inventory were:

A total of 9,000 units were started of which 7,900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

The ending inventory was 70% complete with respect to materials and 80% complete with respect to conversion costs. What are the equivalent units for conversion costs for the month in the first processing department?

ABC corp has 2 plants to produce a single product that sells for a single price: $153. Variable manufacturing costs at plant A is 78 whereas plant B is 81. Fixed manufacturing costs per unit are 34 for plant A and 10 for plant B. Variable marketing costs are 15 for plant A and 16 for plant B whereas fixed distribution costs per unit are 22 and 18 for plants A and B respectively. Total capacity for each plant is 400 units per day and 320 units per day for plants A & B respectively. The normal number of workdays for both plants is 240 days, but they can expand to 300 days if they use overtime, which increases variable manufacturing cost per unit by $3 at plant A, and $8 for plant B. All fixed cost per unit calculations are based on a normal capacity of 240 days.

What is the margin of safety (based on normal days at capacity and no changes to inventory), in percent, for plant A?

1. D Corp uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 580 units. The costs and percentage completion of these units in beginning inventory were:

A total of 9,000 units were started of which 7,900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

The ending inventory was 70% complete with respect to materials and 80% complete with respect to conversion costs. What are the equivalent units for conversion costs for the month in the first processing department?