Question 1
1. A project will produce an operating cash flow of $14,600 a year for 8 years. The initial fixed asset investment in the project will be $48,900. The net aftertax salvage value is estimated at $11,000 and will be received during the last year of the project's life. What is the net present value of the project if the required rate of return is 12 percent? A. $23,627.54 B. $28,070.26 C. $34,627.54 D. $39,070.26 E. $41,040.83 2. One year ago, you purchased a stock at a price of $32.16. The stock pays quarterly dividends of $0.20 per share. Today, the stock is selling for $28.20 per share. What is your capital gain on this investment? A. -$4.16 B. -$3.96 C. -$3.76 D. -$3.16 E. -$2.96 3. Six months ago, you purchased 100 shares of stock in Global Trading at a price of $38.70 a share. The stock pays a quarterly dividend of $0.15 a share. Today, you sold all of your shares for $40.10 per share. What is the total amount of your dividend income on this investment? A. $15 B. $30 C. $45 D. $50 E. $60 4. A year ago, you purchased 400 shares of Stellar Wood Products, Inc. stock at a price of $8.62 per share. The stock pays an annual dividend of $0.10 per share. Today, you sold all of your shares for $4.80 per share. What is your total dollar return on this investment? A. -$382 B. -$372 C. -$1,528 D. -$1,488 E. -$1,360 5. You own 400 shares of Western Feed Mills stock valued at $51.20 per share. What is the dividend yield if your annual dividend income is $352? A. 1.68 percent B. 1.72 percent C. 1.83 percent D. 1.13 percent E. 1.21 percent 6. West Wind Tours stock is currently selling for $48 a share. The stock has a dividend yield of 2.6 percent. How much dividend income will you receive per year if you purchase 200 shares of this stock? A. $24.96 B. $36.20 C. $124.80 D. $362.00 E. $249.60 7. Jerilu Markets has a beta of 1.09. The risk-free rate of return is 2.75 percent and the market rate of return is 9.80 percent. What is the risk premium on this stock? A. 6.47 percent B. 7.03 percent C. 7.68 percent D. 8.99 percent E. 9.80 percent 8. What is the standard deviation of the returns on a stock given the following information? A. 1.57 percent B. 2.03 percent C. 2.89 percent D. 3.42 percent E. 4.01 percent 9. Your portfolio is comprised of 40 percent of stock X, 15 percent of stock Y, and 45 percent of stock Z. Stock X has a beta of 1.16, stock Y has a beta of 1.47, and stock Z has a beta of 0.42. What is the beta of your portfolio? A. 0.87 B. 1.09 C. 1.13 D. 1.18 E. 1.21 10. The outstanding bonds of Tech Express are priced at $989 and mature in 8 years. These bonds have a 6 percent coupon and pay interest annually. The firm's tax rate is 39 percent. What is the firm's aftertax cost of debt? A. 3.01 percent B. 3.22 percent C. 3.35 percent D. 3.77 percent E. 4.41 percent 11. Phillips Equipment has 80,000 bonds outstanding that are selling at par. Bonds with similar characteristics are yielding 6.75 percent. The company also has 750,000 shares of 7 percent preferred stock and 2.5 million shares of common stock outstanding. The preferred stock sells for $53 a share. The common stock has a beta of 1.34 and sells for $42 a share. The U.S. Treasury bill is yielding 2.8 percent and the return on the market is 11.2 percent. The corporate tax rate is 38 percent. What is the firm's weighted average cost of capital? A. 10.39 percent B. 10.64 percent C. 11.18 percent D. 11.30 percent E. 11.56 percent,The attachment contains additional information about Question 8.,1.How were problems 3, 4, 8, 9, and 10 calculated? 2. 11.20% is not an answer choice for problem 11. Is the anser 11.18 percent or 11.30 percent?
Question 2
".) On June 1, A and B form a partnership. A contributes $500,000 in cash and B contributes $100,000 in cash; a Maserati appraised at &178,000; equipment valued at &133,000; a building appraised at %200,000 and a solid brass espresso maker valued at $33,000. 2.) Depreciable items have no salvage value and are depreciated straight-line over 10 years. 3.) June 3- Purchased $5,000 supplies for cash. The accountant recoreded $5,000 CR to supplies and $5,000 CR to cash. The accounting system did not have sufficient controls in place to prevent this entry.At June 30 supplies inventory was $1,000. 4.) June 7- Paid wages for work June 1-5 (3 employees @ $200/day). The payroll recurs June 14, June 21 and June 28. At June 30, the employees have earned pay for June 29 and June 30. 5.) June 8- Received a bill for painting the office from Brighpaints for $4,000 due July 8 2/10/n30 6.) June 8 purchased 2,800 widget @ $100 per widget on account with terms of 5/15/n60. The invoice is paid on the last day of the discount period and the discount taken. 7.) June 13- Sold 600 widgets at $138 each 8.) June 15 returned 833 defective widgets for full refund and accepted a $ 2,000 credit for another 500 widgets that were a bit off-color. 9.) June 18-Sold 300 widgets for cash @ $195 each. 10.) June 21- Sold 300 off-color widgets for cash @ $68 each. 11.) June 22- Sold 750 widgets on account 2/12/n 30 @ $111 each. The customer typically takes advantage of the discount. 12.) June 24- Purchased 3000 widgets for the same price and on the same terms as before. 13.) June 27- A withdraws $33,000 to purchase season tickets for 20 to the DASH- home games only; 2 foot-long hot dogs per person per game included in the price. 14.) June 28- Not to be outdone, B withdraws $34,000 to purchase a 98" HDTV (2233 pixels) to watch the DASH home games in her apartment on DISH TV and share the occasions with 22 friends. Catering of hot chicken wings, cheese grits and peanut butter pie by the Lighthouse Restaurant will be abailable each game day. 15.) June 29- Paid monthly rent on A&B Widget warehouse - $6,000 1. Draw T accounts where possible/relevant 2. Prepare J/E for each of the transactions 3. Transfer the J/E to ledger accounts (make up a simple Chart of Accounts and use the numbers in the ledger Accts and J/E). 4. Close the books for June. Prepare unadjusted TB, adjustments, adjusted TB, post closing TB and financial statments. The partners, A and B, split profits/losses equally." " " ",can i get the answer please?,may I get the complete answer?
Question 3
Regression Project Question: Management Accounting Describe in a good level of detail a cost accounting system that would fit Barb?s needs well. Be sure to use your textbook as a reference in finding and describing several choices that need to be made. Explain why you made the choices you did. I have already completed 98% of the assignment but need help answering the above question. (See attached) BACKGROUND OF ASSIGNMENT: Barb has asked for your help in recommending a ?best practice? costing system. She thinks the current cost system, which is a job order system with overhead application based on direct materials cost, no longer is providing the information the company needs to know how to make bids or price completed orders. At your request, Barb?s has provided monthly information about costs and several potential cost drivers for the past three. Brief descriptions of the accounts are as follows. ?Overhead costs? is the total overhead cost in that month. ?Units sold? is the number of units sold that month. ?Labor hours? and ?machine hours? represent the number of each activity in that month. ?Materials? are the total raw material costs incurred in a given month. ?Modified? is the number of autos sold each month that were modified to meet US emissions and safety regulations. ?Veyron? is the number of Veyron replicas sold that month. ?Consultant charges? is the total amount paid to all consultants for sales that month. ?Truly custom? is the number of cars sold that month that are considered highly customized.,Hello! I only need help on the very last question D (highlighted in bold),Hello! I only need help on the very last question D (highlighted in bold) Thank you,Just to reiterate, I only need the below question answered. Thanks! Describe in a good level of detail a cost accounting system that would fit Barb?s needs well. Be sure to use your textbook as a reference in finding and describing several choices that need to be made. Explain why you made the choices you did.
Question 4
Chapter 5 Calculating IRR 6. Compute the internal rate of return for the cash flows of the following projects. Cash Flows Year Project A Project B 0 -3,500 -2,300 1 1,800 900 2 2,400 1,600 3 1,900 1,400 8. Calculating Profitability Index; Suppose the following two independent investment opportunities are available to Green plain, Inc. The appropriate discount rate is 10 percent. Year Project Alpha Project Beta 0 -1,500 -2,500 1 800 500 2 900 1,900 3 700 2,100 a. Compute the profitability index for each of the two projects. b. Which project(s) should Green plain accept based on the profitability index rule? 11. NPV versus IRR Consider the following cash flow on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 14 percent. Year Deepwater Fishing New Submarine Ride 0 -750,000 -2,100,000 1 310,000 1,200,000 2 430,000 760,000 3 330,000 850,000 As a financial analyst for BRC, you are asked the following questions: a. If your decision rule is accept the project with the greater IRR, which project should you choose? b. Because you are fully aware of the IRR rule?s scale problem, you calculate the incremental IRR for the cash flows. Based on your computation, which project should you choose? c. To be prudent you compute the NPV for both projects. Which project should you choose? Is it consistent with the incremental IRR rule? 21. Payback and NPV An investment under consideration has a payback of sex years and a cost of $574,000. If the required return is 12 percent, what is the worst-case NPV? Explain. Assume cash flows are conventional 25. NPV and IRR Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash flows 0 -750,000 1 205,000 2 265,000 3 346,000 4 220,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are ?blocked? and must be reinvested with the government for one year. The reinvestment rate for these funds is 4 percent. If Anderson uses an 11 percent required return on this project, what are the NPV and IRR of the project? Is the IRR you calculated the MIRR of the project? Why or why not? Chapter 6 3. Calculating Project NPV Down Under Boomerang, Inc. is considering a new three year expansion project that requires an initial fixed asset investment of $2.4 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which it will be worthless. The project is estimated to generate $2,050,000 in annual sales, which costs of $950,000. The tax rate is 35 percent and the required return is 12 percent. What is the project?s NPV? 4. Calculating Project Cash Flow from Assets. In the previous problem, suppose the project requires an initial investment in net working capital of $285,000 and the fixed asset will have a market value of $225,000 at end of the project. What is the project?s year 0 net cash flow? Year 1? Year 2? Year 3? What is the new NPV? 14. Comparing Mutually Exclusive Projects Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2,400,000 and will last for sex years. Variable costs are 35 percent sales, and fixed costs are $180,000 per year. Machine B costs $5,400,000 and will last for nine years. The sales for each machine will be $10.5 million per year. The required return is 10 percent and the tax rate is 35 percent. Both machines will be depreciated on a straight-line basis. If the company plans to replace the machine when it wears out on perpetual basis, which machine should you choose? 21. Calculating NPV and IRR for a Replacement. A firm is considering an investment in a new machine with a price of $12 million to replace its existing machine. The current machine has a book value of $4 million and a market value of $3 million. The new machine is expected to have a four-year life, and the old machine has four years left in which it can be used. If the firm replaces the old machine with the new machine it expects to save $4.5 million in operating costs each year over the next four years. Both machines will have no salvage value in four years. If the firm purchases the new machine, it will also need an investment of $ 250,000 in net working capital. The required return on the investment is 10 percent, and the tax rate is 39 percent. What are the NPV and IRR of the decision to replace the old machine? 34. Benson Enterprises is evaluating alternative uses for a three-story manufacturing and warehousing building that it has purchased for $850,000. The company can continue to rent the building to the present occupants for $36,000 per year. The present occupants have indicated an interest in staying in the building for at least another 15 years. Alternatively, the company could modify the existing structure to use for its own manufacturing and warehousing needs. Benson?s production engineer feels the building could be adapted to handle one of two new product lines. The cost and revenue data for the two product alternatives are as follows. Product A Product B Initial cash outlay for building modifications 45,000 65,000 Initial cash outlay for equipment 165,000 205,000 Annual pretax cash revenues (generated for 15 yrs) 135,000 165,000 Annual pretax expenditures (generated for 15yrs) 60,000 75,000 The building will be used for only 15 years for either product A or product B. After 15 years the building will be too small for efficient production of either product line. At that time, Benson plans to rent the building to firms similar to the current occupants. To rent the building again, Benson will need to restore the building to its present layout. The estimated cash cost of restoring the building if product A has been undertaken is $29,000. If product B has been manufactured, the cash cost will be $35,000. These cash costs can be deducted for tax purposes in the year the expenditures occur. Benson will depreciate the original building shell (purchased for $850,000) over a 30-year life to zero, regardless of which alternative it chooses. The building modifications and equipment purchases for either product are estimated to have a 15-year life. They will be depreciated by the straight-line method. The firm?s tax rate is 34 percent, and its required rate of return on such investments is 12 percent. For simplicity, assume all cash flows occur at the end of the year. The initial outlays for modifications and equipment will occur today (year 0), and the restoration outlays will occur at the end of year 15. Benson has other profitable ongoing operations that are sufficient to cover any losses. Which use of the building would you recommend to management?
Question 5
1. (1 point) On January 1, 2014, Peter Co. issued 6% bonds with a face value of $450,000 when the market interest rate was 4%. The bonds are due in seven years and interest is payable every June 30 and December 31. The effective interest method is used to amortize any bond premium or discount. Required: Calculate the selling price of the bonds and indicate the associated accounts and dollar amounts to be reported on the Income Statement for the year ended December 31, 2015, and on the December 31, 2015, Balance Sheet. Round all amounts to the nearest dollar. Selling Price: $_______________________ Account Name ($) Income Statement: _______________________ ____________ Balance Sheet: _______________________ ____________ 2. (1 point) On January 1, 2014, Piper Co. issued 7% bonds with a face value of $700,000 for $671,612 when the market rate of interest was 8%. Interest is payable on June 30 and December 31, and the effective interest method is used to amortize the bond discount. The December 31, 2016, balance sheet of Piper Co. included the following items: Bonds payable, due December 31, 2018 $700,000 Unamortized discount on bonds payable 12,704 On April 1, 2017, Piper retired all of the bonds at 96 plus accrued interest. Required: Prepare the necessary journal entries for the April 1, 2017, bond retirement.
