Question 1
Course Hero My Dashboard Study Materials Tutors Flashcards Textbook Help Study Groups Upload Documents Finance Ask a Question, Get an Answer FAST! Logout Get an answer to this Finance homework question! Get Step By Step Solution NOW! Student's Question: I need help on finding my errors within the project Excell workbook. When I go online to submit an attempt,I am scoring 84 out of 100 points. So several of my answers are wrong.I will past the multiple choice answer file below. Question 1 [Q #1 ] Net Present Value for "A" is (using a 15% discount rate) : Answer -$357 $357 $411 -$4,110 $839 $556 4 points Question 2 [Q #3 ] Internal Rate of Return for "A" is Answer 23.47% -19.2% -5.9% 25.44 15.22% 4 points Question 3 [Q #2 ] Net Present Value for "B" is (using a 12% discount rate): Answer $396 -$354 -$462 $188 $3,960 -$39,500 4 points Question 4 [Q #4 ] Internal Rate of Return for "B" is Answer 15.22% -15.22% -23.4 23.4%. 4 points Question 5 [Q # 7] Given a borrower has $385,000 per year to pay on a loan and given the lenders debt coverage ratio of 1.3, what is the amount the lender will allow the borrow to allocate toward a loan? (per year) Answer $385,000 $536,000 $22,333 $296,154 4 points Question 6 [Q # 6] What is the after tax, after CapEx cash flow able to service a loan? Answer $506,670 $609,344 $296,670 -$184,960 4 points Question 7 [Q # 5 ] Net Present Value of the after tax cash flows on the pro forma is Answer -$1,520,311 -$1,648,334 -1,420,978 1,462,802 $1,520,311 4 points Question 8 [Q # 8] The total amount of debt that can be serviced if $100,000 is paid each period. (Restated: Given PMT = $100k, i = 10%, n = 15, what is the loan amount (using annual compounding)) Answer $2,375,250 $760,607 $76,923 $1,257,750 $1,500,000 3 points Question 9 [Q #9 ] Given the data on worksheet "Q9 - 13", What is the WACC of company "XYZ"? Answer 12.18% 11.19% 10.4 12.0% 4 points Question 10 [Q # 10] Calculate CAPM based on "XYZ" common equity based on the data provided. Answer 11.4 % 17.5% 13% 12.04% 4 points Question 11 [Q # 12] What is the payback for project "M". (If you like, you can use a 20% discount rate). Answer about $734k $5,803 (Present value) 6 years 16% 4 points Question 12 {Q # 13] Comparing the net income yield to a CD or risk free rate of 6%, does project "M" beat the risk free rate? Compare year one if you consider the Net Income versus the Price paid for project "M". Answer Yes No 6% Trick question! 4 points Question 13 [Q # 11] What is the appropriate discount rate to evaluate this opportunity (of those provided here)? Answer Cost of marginal debt the average return for the stock market (knowing XYZ is a public company). Beta of XYZ times the stock market average. Since the risk of the project is not given, it will be assumed it is riskier that a diversified portfolio; therefore, the discount rate is greater than 17.5% 4 points Question 14 [Q # 15 ] Ranking the projects (highest to lowest) according to IRR Answer N, O, P, Q Q, P, N, O P, N, Q, O O, P, N, Q P, N, O, Q 4 points Question 15 [ Q #16 ] Ranking projects (earliest to latest) using the payback method Answer Q, P, O, N Q, O, P, N O, N, Q, P P, N, Q, O 4 points Question 16 [Q #14 ] Ranking the projects (highest to lowest) according to NPV Answer N, O, P, Q O, P, Q, N P, O, N, Q P, N, Q, O 4 points Question 17 [Q #19 ] What is the pro forma revenue calculated for year 5? Answer $896,580 $210,311 $473,508 $143,644 $2,406,820 4 points Question 18 [Q # 25 ] What is the IRR of this acquisition? Answer 18.2% 15% Cannot be determined 8% 4 points Question 19 [Q # 24 ] Using the given discount rate, what is the NPV of the acquisition? (Use your equity investment (your cash out of pocket) and the cash flows from the opportunity) Answer $1,690,126 $2,154,294 $6,482 $714,213 4 points Question 20 [Q #17] What is the purchase Price of the acquisition? Answer $30,000,000 $11,100,000 $2,835,000 $6,000,000 4 points Question 21 [Q #18 ] What is the Goodwill Amount of the Purchase Price? Answer $88,750 $1,775,000 $1,060,000 -$1,060,000 Does not exist in this problem. 4 points Question 22 [Q # 22 ] What is the net cash flow for year 2? (after debt service and CapEx) Answer $131,179 $420,575 -$1,991 $64,512 $861,840 4 points Question 23 [Q #23 ] Without considering any principal payments or capital expenditures, what is the cash flow for the seller in the year of the sale? Answer $64,512 $364,000 $187,000 -$2,457 Cannot determine from the information; but seller was not profitable and that is why he is selling. 4 points Question 24 [Q # 21] What is the net income for year 1? Answer $117,592 $330,217 -$1,991 $64,675 4 points Question 25 [Q #20 ] What is the principal portion of your debt payment in year 8? Answer $330,750 $212,625 $0 $512,750 4 points Question 26 [Q # 26 ] Considering the "math answer only", do we make the acquisition? Answer no maybe yes Bottom of Form Download Attachment: Finance (1) 180211_Modified(1).xls ASK THIS QUESTION ... Tutor's Reply: Dear Student, I have accepted your assignment and started working on it. Thank You. Tutor's Reply: Dear Student, Please find the solution attached. ============================================= I have highlighted my comments in Green Colour in the word document and also in the excel sheet whereever I have computed something. ================================================ Regards Download Attachment: 6752969.xls Tutor's Reply: Dear Student, Please find the solution attached. ============================================= I have highlighted my comments in Green Colour in the word document and also in the excel sheet whereever I have computed something. ================================================ Regards Download Attachment: 6752969.docx Get Step By Step Solution NOW! Student's Question: Did you receive my previous reply? ASK THIS QUESTION ... Tutor's Reply: Dear Student, Please find the solution attached. ============================================= I have highlighted my comments in Green Colour in the word document and also in the excel sheet whereever I have computed something. ================================================ Regards Download Attachment: 6752969.xls Tutor's Reply: Dear Student, Please find the solution attached. ============================================= I have highlighted my comments in Green Colour in the word document and also in the excel sheet whereever I have computed something. ================================================ Regards Download Attachment: 6752969.doc Tutor's Reply: Dear Student, Please find the solution attached. ============================================= I have highlighted my comments in Green Colour in the word document and also in the excel sheet whereever I have computed something. ================================================ Regards Download Attachment: 6752969.doc Ask a Tutor my question My Questions * -- Select a subject --AccountingBiologyBusinessChemistryCivil EngineeringComputer ScienceEconomicsElectrical EngineeringEnglishFinanceMathMechanical EngineeringOperations ManagementOther SubjectsPhysicsStatistics and ProbabilityWriting HelpAttach A Document (optional): * Due Date: Choose dateTime: Any12 AM1 AM2 AM3 AM4 AM5 AM6 AM7 AM8 AM9 AM10 AM11 AM12 PM1 PM2 PM3 PM4 PM5 PM6 PM7 PM8 PM9 PM10 PM11 PMmorningafternoonevening Our current time in (CST) is Mon Oct 10 2011 6:46:08 AM Browse all Questions Related Questions My data analysis question...I need an interpretation of the histogram Parcell Company contracted on 4/1/07 to construct a building for $2,500,000. The project was completed in 2005. Additional data follow: 2007 2008 2009 Costs incurred to date $ 560,000 $1,350,000 $1,900,000 Estimated cost to complete 1,040,000 450,000 Billings to date 500,000 2,000,000 2,500,000 Collections to date 400,000 1,300,000 2,400,000 Instructions (a) Calculate the income recognized by Parcell under the percentage-of-completion method of accounting in each of the years 2007, 2008, and 2009. (b) Prepare all necessary entries for the year 2008. (c) Present the balance sheet... A man age 55 is a member of his employer s occupational pension scheme. He has been a member of the scheme since he joined the employer at age 35, and he expects to retire at age 65. However, at any time before age 65 he could: (a) die; (b) leave the employer and hence have to leave the pension scheme; or (c) be forced to retire early because of ill health. His salary is 40,000 per annum, and this is not expected to change in future. It is assumed to be paid continuously. The pension scheme s actuary uses the following Markov model to represent the man s life history before age 65. - Z Z Z Z Z Z Z ZZ~... i tried downloaded 2 documents but they did not download...i still got chraged for the 2 downloads?? Can you guys help me with that? *Project 4 - Due March 15. MadLibs continues to be a game that amuses small children. It works like this - * a paragraph or two is written with some key words missing. In their place is * an indication of the type of word (proper name, adjective, adverb, verb, etc.) * that should be placed there. Then one person gets to ask every other person * in turn to provide that kind of word and the blanks are filled in. * When complete, the text is read back, generally to great hilarity. * In this project, we are going to take a stab at implementing such a game in Java. * Consider the following paragraph:... Use this data for the questions... -Mass of tube + MnO2 = 21.5403g -Mass of tube + MnO2 + KClO3 + KCl = 22.5518g -Constant mass of test tube + reaction product = 22.3514g Questions: 1. What is mass of O2 released? (0.2004g) 2. How many moles of O2 were released? (.0063g) 3. How many moles of KClO3 required by the moles of O2 released? (2 moles) 4. What is the mass of KClO3 required? (245.099g) 5. What is the mass of KClO3 & KCl mixture? (.0115g) 6. What is the percent of KClO3 in KClO3 & KCl mixture? 7. If there was 0.5011g of KClO3 in the original mixture, what is the true percent of KClO3? I can figure... Recently Asked Questions Estimate the electric field at a point 2.40 perpendicular to the midpoint of a uniformly charged 2.00--long thin wire carrying a total charge of 4.15 . The organizational rules identified by Gestalt psychologists illustrate that: a. sensation has no effect on perception. b. the perceived whole differs from the sum of its parts. c. perception is the same as sensation. d. we learn to perceive the world through experience What type of immunity results from recovery from mumps? A) Innate immunity B) Naturally acquired active immunity (I chose this one) C) Naturally acquired passive immunity D) Artificially acquired active immunity E) Artificially acquired passive immunity Newborns' immunity due to the transfer of antibodies across the placenta is an example of A) innate immunity (I chose this one) B) naturally acquired active immunity C) naturally acquired passive immunity D) artificially acquired active immunity E) artificially acquired passive immunity P23-33B Mancini manufactures embroidered jackets. The company prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a jacket is based on static budget volume of 14,000 jackets per month: You were hired as a consultant to Giambono Company, whose target capital structure is 40% debt, 15% preferred, and 45% common equity. The after-tax cost of debt is 6.00%, the cost of preferred is 7.50%, and the cost of common using retained earnings is 12.75%. The firm will not be issuing any new stock. What is its WACC? Paloma did not make it to work for, her car broke down on the freeway. Paloma did not make it to work for her car, broke down on the freeway. Paloma did not make it to work, for her car broke down on the freeway Quick and Easy! Ask a question Expert answers Accept if satisfied As seen in Save 20% or More on Tuition Making smarter decisions about the courses you take, and performing better in those courses will save you thousands of dollars. Save 20% or More Subjects Math Physics Chemistry History Statistics Biology Engineering Economics Computer Science Education Psychology Law Philosophy English View All Learning Resources Study Guides Reference Materials Practice Exams Labs Lecture Notes Practice Problems Syllabi Textbook Help Tutors Video Lectures Flashcards Locations Alabama Alaska Arizona Arkansas Australia Brazil California Canada China Colorado Connecticut Delaware District of Columbia Florida France Georgia Germany Hawaii Idaho Illinois India Indiana Iowa Kansas Kentucky Louisiana Maine Malaysia Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Other International Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas United Kingdom Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Yukon Territory About Us Contact Us Feedback Copyright Notice Privacy Terms Sitemap Tutors Educational Concepts Textbooks Blog Study Skills Affiliate Course Hero is not sponsored or endorsed by any college or university. Copyright ? 2011. Course Hero, Inc.
Question 3
Please answer all questions: "Use the following information for ECE Incorporated to answer questions 1 - 3: Assets $200 million Shareholder Equity $100 million Sales $300 million 1. If ECE's stock is currently trading at $24.00 and ECE has 25 million shares outstanding, then ECE's market-to-book ratio is closest to: a. .24 b. 4 c. 6 d. 30 2. If ECE's return on assets (ROA) is 12%, the ECE's net income is: a. $6 million b. $12 million c. $24 million d. $36 million 3. If ECE's net profit margin is 8%, then ECE's return on equity (ROE) is: a. 10% b. 12% c. 24% d. 30% 4. If Firm A and Firm B are in the same industry and use the same production method, and Firm A's asset turnover is higher than that of Firm B, then all else equal we can conclude: a. Firm A is more efficient than Firm b. Firm A has a lower dollar amount of assets than Firm B c. Firm A has higher sales than Firm B d. Firm A has a lower ROE than Firm B 5. If Moon Corporation's gross margin declined, which of the following is true? a. It's cost of goods sold increased. b. It's cost of goods sold as a percent of sales increased. c. Its sales increased d. Its net profit margin was unaffected by the decline. 6. Which of the following statements is false? a. The main components of net working capital are cash, inventory, receivables, and payables. b. The firm's cash cycle is the average length of time between when a firm originally purchases its inventory and when it receives the cash back from selling its product. c. Working capital includes the cash that is needed to run the firm on a day-to-day basis. It does not include excess cash, which is cash that is not required to run the business and can be invested at a market rate. d. If the firm pays cash for its inventory, the firm's operating cycle is identical to the firm's cash cycle. Please use the following information to answer questions 7 - 8. Reardon Metal (RM) had $120 million is sales in 2009. Its cost of goods sold was $85, and its average inventory balance was $15 million. 7. The average number of inventory days outstanding for Rearden is closest to: a. 6 days b. 8 days c. 37 days d. 64 days 8. The industry average days of inventory is 75 days. The amount that Rearden would have to increase/decrease its inventory in order to match the industry average is closest to: a. decrease inventory by 2.2 million b. increase inventory by 2.2 million c. increase inventory by 2.5 million d. increase inventory by 4.2 million 9. Rearden Metal needs to order a new blast furnace that will be delivered in one year. The $1,000,000 price for the blast furnace is due in one year when the new furnace is installed. The blast furnace manufacturer offers Rearden Metal a discount of $50,000 if they pay for the furnace now. If the interest rate is 7%, then the NPV of paying for the furnace now is closest to: a. ($15,421) b. $15,421 c. ($46,729) d. $46,729 10. Which of the following statements is false? a. The interest rates that banks offer on investments or charge on loans depends on the horizon of the investment or loan. b. The Federal Reserve determines very short-term interest rates through its influence on the federal funds rate. c. The interest rates that are quoted by banks and other financial institutions are nominal interest rates. d. Fundamentally, interest rates are determined by the Federal Reserve. 11. Suppose a ten-year bond with semiannual coupons has a price of $1,071.06 and a yield to maturity of 7%. This bond's coupon rate is closest to: a. 3.5% b. 6.0% c. 7.0% d. 8.0% Use the following information to answer questions 12-14 The Sisyphean Company has a bond outstanding with a face value of $1,000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semiannually. 12. How much will each semiannual coupon payment be? a. $60 b. $40 c. $120 d. $80 13. Assuming the appropriate YTM on the Sisyphean bond is 7.5%, then the price that this bond trades for will be closest to: a. $1,045 b. $691 c. $1,000 d. $957 14. Assuming the appropriate YTM on the Sisyphean bond is 9%, then this bond will trade at a. A premium b. A discount c. Par d. Not enough information to determine 15. Which of the following statements is false? a. Prices of bonds with lower durations are more sensitive to interest rate changes b. When a bond is trading at a discount, the price increase between coupons will exceed the drop when a coupon is paid, so the bond's price will rise and its discount will decline as time passes. c. Coupon bonds may trade at a discount, at a premium, or at par. d. The sensitivity of a bond's price changes in interest rates is the bond's duration. 16. Which of the following is not a way a firm can increase its dividend? a. By increasing its retention rate b. By decreasing its shares outstanding c. By increasing its earnings (net income) d. By increasing its dividend payout rate Use the following to answer questions 17-19 Rearden Metals has a current stock price of $30 share, is expected to pay a dividend of $1.20 in one year, and its expected price right after paying that dividend is $33. 17. Rearden?s expected dividend yield is closest to: a. 3.40% b. 3.65% c. 4.00% d. 4.20% 18. Rearden?s expected capital gains yield is closest to: a. 4.0% b. 6.4% c. 8.2% d. 14.0% 19. NoGrowth Industries presently pays an annual dividend of $1.50 per share and it is expected that these dividend payments will continue indefinitely. If NoGrowth's equity cost of capital is 12%, then the value of a share of NoGrowth's stock is closest to: a. $10 b. $15 c. $14 d. $12.50 20. Von Bora Corporation (VBC) is expected to pay a $2.00 dividend at the end of this year. If you expect VBC's dividend to grow by 5% per year forever and VBC's equity cost of capital is 13%, then the value of a share of BBC stock is closest to: a. 25 b. $40 c. $15.40 d. $11.10 21. Which of the following statements is false? a. The total payout model allows us to ignore the firm's choice between dividends and share repurchases b. By repurchasing shares, the firm increases its share count, which decreases its earning and dividends on a per-share basis. c. The total payout model discounts the total payouts that the firm makes to shareholders, which is the total amount spent on both dividends and share repurchases d. In the dividend discount model we implicitly assume that any cash paid out to the shareholders takes the form of a dividend. 22. Suppose that KAN's beta is 1.5. If the market risk premium is 8% and the risk-free interest rate is 4%, then the expected return for KAN stock is? a. 8.0% b. 16.0% c. 13.5% d. 10.0% Use the following information to answer questions 24-25: Food For Less (FFL), a grocery store, is considering offering one hour photo developing in their store. The firm expects that sales from the new one hour machine will be $150,000 per year. FFL currently offers overnight film processing with annual sales of $100,000. While many of the one hour photo sales will be new customers, FFL estimates that 60% of their current overnight photo customers will switch and use the one hour service. 23. The level of incremental sales associated with introducing the new one hour photo service is closest to: a. $90,000 b. 150,000 c. 60,000 d. 120,000 24. Suppose that of the 60% of FFL's current overnight photo customers, half would start taking their film to a competitor that offers one hour photo processing if FFL fails to offer the one hour service. The level of incremental sales in this case is closest to: a. $60,000 b. $150,000 c. $90,000 d. $120,000 25. You are considering adding a microbrewery on to one of your firm's existing restaurants. This will entail an increase in inventory of $8,000, an increase in accounts payable of $2,500, and an increase in property, plant and equipment of $40,000. All other accounts will remain unchanged. The change in net working capital resulting form the addition of the microbrewery is a. $45,500 b. $10,500 c. $6,500 d. $5,500 26. Bubba Company reported net income of $300 million for the most recent fiscal year. The firm had depreciation expenses of $125 million and capital expenditures of $150 million. Although they had no interest expense, the firm did have an increase in net working capital of $20 million. What is Bubba's free cash flow? a. $170 million b. $255 million c. $150 million d. $5 million 27. Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy, with each outcome being equally likely. The initial investment required for the project is $80,000, and the project's cost of capital is 15%. The risk-free interest rate is 5%. The NPV for this project is closest to: a. $6,250 b. $14,100 c. $10,000 d. $18,600 28. Suppose that Taggart Transcontinental currently has no debt and has an equity cost of capital of 10%. Taggart is considering borrowing funds at a cost of 6% and using these funds to repurchase existing shares of stock. Assume perfect capital markets. If Taggart borrows until they achieve a debt-to-equity ratio of 20%, then Taggart's levered cost of equity would be closest to: a. 8.0% b. 9.2% c. 10.0% d. 11.0% 29. Which of the following statements is false? a. In perfect capital markets, buying and selling securities is a zero-NPV transaction, so it should not affect firm value. b. Making positive NPV investments will create value for the firm's investors, whereas saving the cash or paying it out will not. c. In perfect capital markets, if a firm invests excess cash flows in financial securities, the firm's choice of payout versus retention is irrelevant and does not affect the initial share price. d. After adjusting for investor taxes, there remains a substantial tax advantage for the firm to retain excess cash. 30. Which of the following statements is false? a. A call option gives the owner the right to buy the asset. b. A put option gives the owner the right to sell the asset. c. A financial option contract gives the writer the right (but not the obligation) to purchase or sell an asset at a fixed price at some future date. d. A stock option gives the holder the option to buy or sell a share of stock on or before a given date for a given price. 31. Wyatt Oil has 8 million shares outstanding and is about to issue 10 million new shares in an IPO. The IPO price has been set at $15 per share, and the underwriting spread is 6%. the IPO is a big success with investors, and the share price rises to $35 the first day of trading. The amount that Wyatt Oil raised during the IPO is closest to a. $113 million b. $141 million c. $150 million d. $329 million
