[ad_1]

Get college assignment help at uniessay writers 5 pts Question 10 Your uncle has $340,000 invested at 7.7 % and he now wants to retire. He wants to withdraw $35,000 at the end of each year, starting at the end of this year. He also wants to have $25,000 left to give you when he stops withdrawing funds from the account. For how many years can he make the $35,000withdrawals and still have $25,000 left at the end? Your answer should be between 12.32 and 20.34, rounded to 2 decimal places, with no special characters. I D Question 11 5 pts Your best friend just won the Florida lottery. She has the choice of $15,900,000 today an annuity with payments of $1,150,000 for 20 years, with the first payment coming one year from today. What rate of return is built into the annuity? Disregard any tax or consequences Your answer should be between 2.01 and 14.74, rounded to 2 decimal places, with no special characters

a. You will have approximately Sin the IRA when you ratire (Do not round until the fnal angwer Then round to the nearest dolar as needed) At the age of 25. to save for ratirement, you decide to deposit $20 at the end of each month in an IRA that pays 4.5% compounded monthly Use the following formuia to denermine how much you will have in the IRA when you retire at age 05 a. b. The interest is approxinmately 5 (Use the answer from part a to fnd this answer Round to the naarest dollar as needed) Plt n-1 A. or mi Find the interss

First Interest Payment Date 25/06/2014 Date Rolling Coupon Adjusted All-in-Rate All-in-Spread Interest Type Interest Payment frequency Method Interest Payment Following 2.25% Fixed Rate Loan Annual Standard No NA Payment Date Currency Principal Due Interest Due Penalties Due Total Due Banalce Due Interest Rate Number of Interest Days 25/06/2014 EUR 25/06/2015 EUR 27/06/2016 EUR 25/06/2017 EUR 26/06/2018 EUR 25/06/2019 EUR 25/06/2020 EUR 25/06/2021 EUR 26/06/2022 EUR Due Date 25/06/2014 0 0 2,000,000.00 2.25% 195 25/06/2015 2.25% 360 25/06/2016 2,25% 360 0 25/06/2017 2.25% 0 360 25/06/2018 2.25% 360 25/06/2019 2.25% 0 360 25/06/2020 2.25% 0 360 25/06/2021 0 2.25% 360 25/06/2022 0 2.25% 360 25/06/2023 25/06/2023 2.25% 360 FUR 0 25/06/2024 25/06/2024 2.25% 360 EUR 27/06/2025 EUR 26/06/2026 EUR 25/06/2027 EUR 25/06/2028 EUR 25/06/2029 EUR 25/06/2030 EUR 25/06/2025 2.25% 360 0 25/06/2026 2.25% 360 25/06/2027 2.25% 360 25/06/2028 2.25% 360 25/06/2029 2.25% 0 360 25/06/2030 2.25% 360 Total EUR 2,000,000.00 0

Use PMT to determine the regular payment amount, rounded to the nearest dolar. The price of a small cabin is $45.000. The bank requires a 5% down payment The buyer is offered two mortgage options: 20-year fed at 95 % or 30-year fied at 9.5% Caloulate the amount of interest paid for each option How much does the buyer save in interest with the 20-year option? Find the monthly payment for the 20-year option (Round to the nearest dolar as needed) Find the monhly payment for the 30-year option Round to the nearest dolar as needed) Caloulate the total cost of interest for both mortgage options How much does the buyer save in interest with he 20 year option? Enter your answer in each of the answer boses

Use PMT to determine the regular payment ampust sounded to the nearest delle, Your eredt card has a balance of 32800 and an annual interest rate of 18% You decide to pay off the balance over two years f there are ne further purchases charged to the cand a. How much must you pay each month? b. How uch total interest wll you pay? a The monthly paymens are apeomaly De set round un the final answ Then round o the rearest dollar as eeded) b. The total interest paid over 2 years is approximately s (Round to the neaest dolar as teeded)

3. You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 5 percent interest. Approximately how long must you wait for your investment to double in value? You can’t use a financial calculator on this.

5. Jabar’s Fashions has just signed a $3.25 million contract. The contract calls for a payment of $0.9 million today, $1.35 million one year from today, and S1 million two years from today. What is this contract worth today(Net Present Value) if the firm can earn S percent on its money?

1. You are planning company. You obtain $20,000 from equity investors and $20,000 from the bank. You will need to pay the bank 10% interest and have promised your investors 20%. The tax rate is 60%. You estimate operating costs at $3000 per year. You plan to operate the company for 3 years and pay off equity and debt during the three years. You expect salvage to be $10,000 at the end of the 3 years. Use the AEC equation and the table format presented in class to determine the annual equivalent revenues for the following a. Standard table with straight line depreciation. b. Now assume salvage will be $15,000 with SL depr. c. Use SOYD depr to calculate the AER (annual equivalent revenues). d. Use 5 year MACRS depr to calculate the AER e. Assume interest is only 28% deductible. Compute the AER f. Using SOYD depr, calculate the deductibility ratio to have an AER the sanie as part a. g. Assume revenues and operating expenses each year are random variables. Determine the AER necessary to be 80% sure this investment will pay off the debt and equity over the three SAle Noyear period. Do this for three probability assumptions: normal, uniform, and triangular. h. Assume operating expenses i. Assume demand is 10,000, 12,000, and 14,000 units in years 1-3 and the price is 2.2226 per unit. Calculate the resulting i. Determine AER as a function of debt ratio as rd varies from 0 to 1,0. k. Determine the AER assuming the first cost is expensed and the salvage is income. to start a new company. You will need $40,000 in capital to start the cases: 3000, 4000, and 5000. Find the AER. are equity. return on [First Cost ia, Salv t(AE depr)]/1 – t) ic = AE op

Use PMT to determine the regular payment amount, sounded to the nearest dollar In terms of paying less in interest, which is more economical for a $230.,000 mortgage a 30 year foed-rate at 10% or a 20-year fed-rate at D5% 7 How much is saved in interest Denermine which loan is more economical Choose the comect answer below O The 30-ear 10% loan is moe ecenomical O The 20-year 9.5% loan is more economical The byer will save approximately Sin interes (De not round unti the final answer Then round to the neaest thousand dollars 1

Use PMT to dehermine the eqular payment amont rounded to the nearest dolar Your gredt card has a balance of $2800 and an annual interest ae of 18% You decide to pay of the balanoe over two years if there are no further purchases charged to the card How much must you pay each month? How much total interest will you pay a. The montly payments ae apprsimately iDe net und u he final anser Then round to the nearest dolar as needed) b. The total ne paid over 2 years is approximaely Round to the nearst dolr as needed)

Get college assignment help at uniessay writers 6. You want to purchase a new Ski Chalet which costs $399,700. Your plan is to pay 5 percent down in cash and finance the balance over 20 years at 12 percent. What will be your monthly mortgage payment?

British American Tobacco Names Nicandro Durante as Chief Executive Officer Source: Lead Story-Dateline: Mulier, Tom and Paul Jarvis, “British American Tobacco Names Nicandro Durante as Chief Executive Officer,” Bloomberg.com, http://www.bloomberg.com/news 2010-06-24hat-says-adams-to-retire-as-ceo-after-seven-years-durante-to-succeed-him.html, posted 6/24/2010. Summary: Key Points the Article Nicandro Dura ha ncluded purchasing over S5 billion in assets and nearly tripling the stock crice, Adams was such a succesaful CEO that shareholders sold off stock on news of the change. Stock price fell about seven-tenths of a percent on the announcement. continue to redefine itself and Ingk for new prafit opportunities. The outgoing CEO indicated that the time was right “to make a change bath for ma and the compa he industry has consolidated a lot in the past several years and must Multiple Choice Questions 1. A company’s CEO is O A. appointed by the board of directors O B elected by the shareholders ) C. elected by mid-level management O D. f these none 2. The board of directors is elected by O A. all the stakeholders O B shareholders O C. employees O D. none of the above t the highest level are known as 3. The people in charge of managing a corporation O P stockholders B. mid-level managers O C. the board directors Click to select your answer.

26. [4 points]. Jeff purchases 120 shares of stock ABC at $34 per share. Initial margin requirement is 45%, maintenance margin requirement is 35%, and margin loan interest is 10%. The price drops to $21. Will the margin call be issued? If yes, what will be the margin call 34 1-45 amount?

Mini Case This Mini Case is available in MyFinanceLab. Your first assignment in your new position as assistant financial analyst at Caledonia Products is to evaluate two new capital-budgeting proposals. Because this is your first assignment, you have been asked not only to provide a recommendation but also to respond to a number of questions aimed at assessing your understanding of the capital-budgeting process. This is a standard procedure for all new financial analysts at Caledonia, and it will serve to determine whether you are moved directly into the capital-budgeting analysis department or are provided with remedial training. The memo- randum you received outlining your assignment follows: To: The New Financial Analysts From: Mr. V. Morrison, CEO, Caledonia Products Re: Capital-Budgeting Analysis Provide an evaluation of two proposed projects, both with 5-year expected lives and identical initial outlays of $110,000. Both of these projects involve additions to Caledonia’s highly successful Avalon product line, and as a result, the required rate of return on both projects has been established 12 percent. The expected free cash flows from each project are as follows: PROJECT B PROJECT A -$110,000 -$110,000 Initial outlay 40,000 20,000 Inflow year 1 40,000 Inflow year 2 30,000 Inflow year 3 40,000 40,000 Inflow year 4 40,000 50,000 Inflow year 5 70,000 40,000 In evaluating these projects, please respond to the following questions: Why is the capital-budgeting process so important? b. Why is it difficult to find exceptionally profitable projects? c. What is the payback period on each project? If Caledonia imposes a 3-year maximum ac- ceptable payback period, which of these projects should be accepted? What are the criticisms of the payback period? a. e. Determine the NPV for each of these projects. Should they be accepted? f Describe the logic behind the NPV g. Determine the PI for each of these projects. Should they be accepted? h Would you expect the NPV and PI methods to give consistent accept/reject decisions? Why or why not? i. What would happen creased? If the required ; Determine the IRR for each project. Should they be accepted? to the NPV and PI for each project if the required rate of return in- rate of return decreased? k. How does a change in the required rate of return affect the project’s internal rate of return? 1. What reinvestment rate assumptions are implicitly made by the NPV and IRR methods? Which one is better?

Robert Black and Carol Alvarez are vice presidents of Western Money Management and codirectors of the company’s pension fund management division. A major new client, the California League of Cities, has requested that Western present an investment seminar to the mayors of the represented cities. Black and Alvarez, who will make the presentation, have asked you to help them by answering the following questions. (2) What are the total return, the current yield, and the capital gains F. yield for the discount bond? Assume that it is held to maturity and the company does not default on it. (Hint: Refer to Footnote 8 for the definition of the current yield and to Table 7-1.) What is reinvestment rate risk? Which has more reinvestment rate H. risk, a 1-year bond or a 10-year bond? I. How does the equation for valuing a bond change if semiannual payments are made? Find the value ofa 10-year, semiannual payment, 10% coupon bond if nominal ra 13%.

FINANCIAL PLANNING PROBLEMS 1. Computing Taxable Income. Thomas Franklin arrived at the following tax information Gross salary, $41.780 Interest earnings, $225 Dividend income, $80 One personal exemption, $2,650 Itemized deductions, $3,890 Adjustments to income, $1,150 What amount would Thomas report as taxable income? (Obj. ) 2. Determining Tax Deductions. If Lola Harper had the fol lowing itemized deductions, should she use Schedule A or the standard deduction? The standard deduction for her tax situation is $6,050. (Obj. 2) Donations to church and other charities, $1,980 Medical and dental expenses exceeding 7.5 percent of ad- justed gross income, $430 State income tax, $690 Job-related expenses exceeding 2 percent of adjusted gross income, $1,610 3. Calculating Average Tax Rate. What would be the average tax rate for a person who paid taxes of $4,864.14 on a tax able income of $39,870? (Obj. 2) 4. Determining a Refund or Taxes Owed. Based on the follow ing data, would Ann and Carl Wilton receive a refund or owe additional taxes? (Obj. 2) Adjusted gross income, $43,190 Itemized deductions, $11,420 Child care tax credit, $80 Federal income tax withheld, $6,784 Amount for personal exemptions, $7,950 Tax rate on taxable income, 15 percent LO10 faa chould

Tax rate on taxai 5. Selecting Federal Tax Forms. Which 1040 form should each of the following individuals use? (Obj. 3) a. A high school student with an after-school job and inter- est earnings of $480 from savings accounts b. A college student who, due to ownership of property, is able to itemize deductions rather than take the standard deduction c. A young, entry-level worker with no dependents and in- come only from salary. 8. Future Value of a Tax Savings. On December 30, you de- cide to make a $1,000 charitable donation. If you are in the 28 percent tax bracket, how much will you save in taxes for the current year? If you deposit that tax savings in a savings account for the next five years at 8 percent, what will be the future value of that account? (Obj. 5) 6. Using Federal Tax Tables. Using the tax table in Exhibit 4-7 (p. 121), determine the amount of taxes for the follow- ing situations: a. A head of household with taxable income of $26,210 b. A single person with taxable income of $26,888 c. A married person filing a separate return with taxable in- come of $26.272. (Obj. 3) 7. Comparing Taxes on Investments. Would you prefer a fully taxable investment earning 10.7 percent or a tax-exempt in- vestment earning 8.1 percent? Why? (Obj. 5)

CFIN5-CHAPTER 2 grative Problem a Jamison was recently hired as a financial analyst by Computron Industries, a manufacturer of onic components. Her first task was to conduct a financial analysis of the fim covering the lat two .To begin, she gathered the following financial statements and other data Balance Sheets Assets 2015 2016 $ 52,000 $ 57,600 Cash Accounts receivable 402,000 351,200 Inventories 836,000 715,200 Total current assets $1,290,000 $1,124,000 Gross fixed assets 527,000 491,000 Less accumulated depreciation 166,200 146,200 $ 360,800 $ 344,800 Net foxed assets Total assets S1.650.800 $1468.800 Liabilities and Equity $ 175,200 Accounts payable $145,600 Notes payable 225,000 200,000 Accruals 140,000 136,000 $ 540,200 Total current liabilities 481,600 Long-term debt 424,612 323,432 Common stock (100,000 shares) 460,000 460,000 Retained earnings 225,988 203,768 $ 685,988 Total equity $ 663,768 Total liabilities and equity $1.650,800 $1.468.800 (continued) 2015 2016 Income Statements $3,432,000 $3,850,000 Sales (2,864,000) ( 340,000) (3,250,000) 430,300) Cost of goods sold Other expenses, 18.900) $3,222.900 $ 209,100 62.500) $ 146,600 20,000) Depreciation Total operating costs $3,700,300 $ 149,700 EBIT L76,000) Interest expense 73,700 $ EBT 58,640) L 29,480) Taxes (40%). S 87.960 $0.880 S 44.220 Net income $0.442 EPS Statement of Cash Flows (2016) Operating Activities $ 44,220 Net income Other additions (sources o f cash) 20,000 Depreciation 29,600 Increase in accounts payable 4,000 Increase in accruals Subtractions (uses of cash) 50,800) Increases in accounts receivable (120,800) Increase in inventories SL73 780) Net cash flow from operations Long-Term Investing Activities SL36.000) Investment in fixed assets Financing Activities $ 25,000 Increase in notes payable 101,180 Increase in long-term debt 22,000) Payment of cash dividends $104,180 Net cash flow from financing $.5,600) Net reduction in cash account 57 600 Cash at beginning of year $ 52.000 Cash at end of year (continued) 2015 50 2016 $6.00 Other Data December 31 stock price 100,000 100,000 Number of shares $0.22 $022 Dividends per share $40,000 $40,000 Lease payments Industry average data for 2016 Ratio Industry Average 2.7x Current 1.0x Quick 6.0x Inventory turnover 32.0 days Days sales outstanding (DSO) 10.7x Fixed assets turnover Total assets turnover 2.6x Debt ratio 50.0% TIE 2.5x Fixed charge coverage 2.1x Net profit margin 3.5% ROA 9.1 % ROE 18.2% Price/earnings 14.2x Market/book 1.4x Assume that you are Donna Jamison’s assistant and that she has asked you to help her prepare a report that evaluates the company’s financial condition. Answer the following questions: a What can you condlude about the company’s financial condition from its statement of cash flows? b. What is the purpose of financial ratio analysis, and what are the five major categories of ratios? c What are Computron’s.current and quick ratios? What do they tell you about the company’s liquidity position? d What is Computron’s inventory turnover, day’s sales outstanding. fixed assets turnover and total assets tumover ratios? How does the firm’s utilization of assets stack up against that of the industry? What are the firm’s debt, times-interest-eamed, and fixed charge coverage ratios? How does Computron compare to the industry with respect to financial leverage? What condlusions can you draw from these ratios? Calculate and discuss the firm’s profitability ratios-that is, its net profit margin, return on assets (ROA) and retun on equity (ROE).

31. [4 points]. Amazon trades at US$1,780.75. Ben pays cash, while Connor buys using 50% margin requirement. Maintenance margin is 30% and margin loan interest is 10% (a) Price moves to $1,900. Compute Ben’s and Connor’s return on investment. (b) Price moves to $1,600. Compute Ben’s and Connor’s return on investment

5 pts Question 4 Suppose the U.S. Treasury offers to sell bonds for $760. No payments will be made until the bond matures 12 years from now, at which time it will be redeemed for $1,000. What interest rate would the bond earn if it were purchased at this price? Your answer should be between 1.08 and 5.64, rounded to 2 decimal places, with no special characters. 5 pts Question 5 Five years ago, Weed Go Inc. earned $2.30 per share. Its earnings this year were $3.10. What was the growth rate in earnings per share (EPS) over the 5-year period? Your answer should be between 2.98 and 14.12, rounded to 2 decimal places, with no special characters.

5 pts Question 8 Your father is about to retire, and wants to buy an annuity that will provide him with $50,000 of income per year for 25 years, beginning a year from today. The going rate on such annuities is 5.15%. How much would it cost him to buy such an annuity today? Your answer should be between 458,000.00 and 760,000.00, rounded to 2 decimal places, with no special characters. 5 pts Question 9 Andy has $500,000 and wants to retire. He expects to live for another 30 years and to earn 7.90% on his invested funds. How much could he withdraw at the end of each of the next 30 years and end up with zero in the account? Your answer should be between 34,960.00 and 57,550.00, rounded to 2 decimal places, with no special characters.

The post Question: 5 Pts Question 10 Your Uncle Has $340,000 Invested At 7.7 % And He Now Wants To Retire. He Wants To Withdraw $35,000 At The End Of Each Year, Starting At The End Of This Year. He Also Wants To Have $25,000 Left To Give You When He Stops Withdrawing Funds From The Account. For How Many Years Can He Make The $35,000withdrawals And Still Have $25,000 Left … appeared first on uniessay writers.

[ad_2]

Source link

November 3, 2019