Ans 1:
Initial Investment = $20 million
Book Value at the end of Year 4 = $4 million
Depreciation per year = (20-4)/4 = $4 million
Salvage value of the equipment = $6 million
Tax rate = 35%
Tax on the gain on sale of equipment = (6-4)*35% =$.7 million
Aft
SHOW ALL YOUR WORK!
1. The Whirlwind Co. just paid an annual dividend of $2.10 a share. The firm
expects to pay dividends forever and to increase the dividend by 3.5 percent
annually. What is the current value of this stock if the required return is 11
pe
Module 8, 23 questions
Question 1
Questions 1-4 are based on the following information:
You and your friends have decided to go to The Kentucky Derby. There are 12 horses in the race.
How many ways can the horses come in first, second, or third?
This an e
Project A
Initial Investment = $1.5 million
Duration of the project = 3 Years
Additional Revenue before tax per year = $1.2 million
Additional Annual Costs = $600,000
Marginal Tax Rate = 35%
Salvage Value = $0
Depreciation expenses= ($1.5-0)/3 = $.5 milli
APA Style Sheet
QHT1 Task 1 Memo
1
APA Style Sheet
To:
Supervisor
RE:
2
Costs of Quality
The following report looks into the costs of quality considerations decided upon by an
organization. The three categories of costs of quality are further analyzed wit
Communication can be defined as the process of transmitting information and common
understanding from one person to another (Keyton, 2011). Every communication exchange has
the two elements of the sender and the receiver. The sender is the one who initiat
M-Fresh Water Company
Author:
Date:
Purpose: Calculate water bills for commercial businesses
Quarterly Data
Customer Name
Cust Type
Red Lake Chapter
NPROFIT
Amity Church
NPROFIT
Church of Christ
NPROFIT
NM State Highway
GOV
Spot Free Power Wash
COM
CIT Ap
Ski Pro Corporation
The decision to make or buy the bindings depends on the cost incurred in making or buying the
10,000 pairs of skis and bindings. The following table shows the cost incurred in the scenarios
under consideration.
Hence by making the 10,0
Production Volume
Making
Direct Labor
Direct Material
Fixed Overhead
Variable Overhead
Total Cost
Buying
Direct Labor
Direct Material
Fixed Overhead
Variable OH
Sub-contracting charges
Total Cost
Savings in Cost
Hence sub-contract is the make
Maximum Purc
Name:
Acct 221.ol3.mj
Part 1 =
Part 2 =
Total =
1|Page
Quiz 1 Part 1 Online WebTycho
Stop:
Start:
Time:
Ans a:
General Journal:
Date
Jan 1,
2012
Account
Cash
Debit
$22000
Preferred Stock ($20 par)
$20000
Paid-in Capital in Excess of Par, Preferred Stock
J
Parker Department Store
Income Statement
December 31,2 014
Sales Revenue
Total Sales
Less : Sales Return and Allowances
Net Sales Revenue
$626,000
(8,000)
$618,000
Cost of Goods Sold
Gross Profit
Operating Expenses
Salaries and Wages Expense
Maintenance a
Utilities
Facility Lease
Equipment Depreciation
Supplies
Factory Overhead
Cost Behavior
Total Cost in $
Mixed
$230
Fixed
12,043
Fixed
3,600
Fixed
600
2012
January
Febrauary
March
April
May
June
$16,473
Cream Base in oz
Natural Oils in oz
Bottle (8-oz)
Cos
1. assume that all of the bonds listed in the following table are the same except for
their pattern of promised cash flow over time. Prices are quoted per $100 of face
value
a) use the information in the table and the law of one price to infer the values
Net Increase in Revenue
Equipment Purchase price
Installation
Total Investment on Equipment
300,000
1,200,000
300,000
1,500,000
Net Working Capital
100,000
Selling Price of Equipment at the end of 10th Year
Net Working Capital Recovered
500,000
100
Weight of Debt = 39%
Weight of Common Stock = 43%
Weight of Preferred Stock = 18%
Marginal Tax Rate = 40%
Return on Debt or Cost of Debt = 11%
Return on Common Stock or Cost of Common Stock = 19%
Return on Preferred Stock or Cost of Preferred Stock = 11%
Ans 1:
a) After-Tax Cost of Debt The after-tax cost of debt is given by the following formula
Kd =Pre-Tax Cost of Debt *(1-Tax Rate)
Now the Pre-Tax Cost of Debt = Interest Rate Paid on the long term debt = 10%
The Tax Rate = 35%
Hence the after-tax Cost
Interest Rate Paid on Debt
Tax Rate of the firm
Total Long term Debt (million)
Common Equity
Weight of Debt
Weight of Common Equity
WACC
Current Dividend Per Share
Dividend Growth Rate
Dividend Per Share Next Year
Current Market Price Per share
10%
6.50%
RUNNING HEAD: ABBOTT LABS STOCK RISK MEASUREMENT
1
Weighted Average Cost of Capital
The Weighted Average Cost of Capital is the cost of each component of capital multiplied
by the proportional weight. The WACC is a measure of the risk of an enterprise and
Application of risk measurement to determine stability of company portfolio of Abbott Labortories, to include the
following:
a) Year-by-year stock return calculations for a five year period
b) Calculate the beta coefficient of the stock
c) Calculate the s
Ans 1:
Par Value of Bond = $1000
Time to Maturity (Years) = 20
Interest Rate = 8%
Coupon Paid = 8%*$1000 = $80
a) When a bond is issued the Yield to Maturity is equal to the coupon rate or the nominal
interest rate as given here. Hence in this case the Yi
Ans 1:
The Discount rate of a 180 day bond is given by
D = (F-P)*365/t*F
Where F = Face Value of the bond
P = Price of the bond
T = 180 days
Y = 4.24%
Putting the values we get
P = $978.8
Hence correct option is e
Ans 2:
Maturity of the STRIPS = 12 years