3530 SU23 Final Exam - Type X - Solutions (post)

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FULL NAME: ____________ ____ Section: ______ STUDENT ID:______________ AP/ADMS 3530 3.00 Finance Final Exam – Summer 2023 August 17, 2023 Exam Version: X - SOLUTIONS This exam has 45 multiple choice questions and is worth a total of 45 marks . Choose the response that best answers each question. Circle your answers below, and fill in your answers on the bubble sheet using only a pencil (NOT a pen). Only the bubble sheet is used to determine your exam score and it will not be returned to you. Ensure that you write both your full na m e a n d student ID # at the top of this cover page and on the bubble sheet and the version of your exam (X or Y) on the bubble sheet. P l e a se note t h e fol l o w ing points : 1) Read the questions carefully and use your time efficiently . 2) Choose the answers that are closest to yours, because of possible rounding. 3) Keep at least 4 decimal places in your calculations and at least 2 in your final answers and at least 6 decimal places for interest rates. 4) Unless otherwise stated , interest rates are annual , and bonds pay semi- annual coupons and have a face value (or par value) of $1,000 . 5) You may use the back of the exam paper as your scrap paper (no scrap paper is permitted). 6) Instructors and invigilators will not answer questions during the exam. Page 1 of 19

NUMERICAL QUESTIONS 1. You are retiring today and plan to spend $150,000 per year for the next 20 years. If you can earn 4.80% annually and your first withdrawal is at the end of this year, how much should you have saved to finance your retirement? A) $3,000,000 B) $1,901,443 C) $4,856,337 D) $1,584,535 E) $1,267,628 ANSWER: B PMT=150,000; N=20; I/Y=4.80%;FV=0; COMP PV  $1,901,443 2. You want to have $1,720,000 at the end of 22 years when you sell your business and retire to the Bahamas. You have $8,000 to invest now, and you will receive $90,000 at the end of 10 years from a trust fund. In addition, you plan to invest an equal amount at the end of every year over the next 22 years to reach your goal. If you can earn 8.90% annually on your account, how much do you have to invest annually? A) $26,126 B) $148,982 C) $27,704 D) $17,404 E) $22,831 ANSWER: E FV of 90,000 at end of 22 years (22-10 =12 yrs): PV=90,000; N=12, I/Y=8.9%; PMT=0; COMP FV = 250,366.99 NEW FV needed at end of year 22: 1,720,000 – 250,366.99 = 1,469,633.01 Solve for annual savings needed: FV=1,469,633.01; PV=-8,000; N=22. I/Y=8.90%; COMP PMT  $22,831 3. Based on your new high-paying job, you managed to obtain a $480,000, 30-year Canadian mortgage with an APR of 6.50% (compounded semiannually). What is your monthly payment? A) $2,506 B) $2,714 C) $2,824 D) $3,007 E) $3,254 Page 2 of 19

ANSWER: D EAR = (1+.0325)^2 -1 = 0.0660563 Im = (1.0660563)^(1/12)-1 = .5345% PV=-480,000; I/Y=.5345; N=360; FV=0; COMP PMT  $3,007 4. What is the present value of a six-payment annuity of $3,300 per year that begins 5 years from today if the annual discount rate is 5.40%? A) $14,585 B) $12,714 C) $13,400 D) $16,538 E) $15,690 ANSWER: C PMT=3300; N=6; I/Y=5.40%; FV=0 COMP PV 4  16,537.63 PV 0 =16,737.63/(1.054)^4 = $13,400.19 5. The following information of a callable bond which pays interest semi-annually is given: The coupon rate is 3.20% and the number of years to maturity is 12. The bond is callable at 110% of par value in 6 years. If the par value is $1,000 and the current price is $940, what is the yield to call? A) 4.35% B) 1.83% C) 7.15% D) 5.82% E) 2.25% ANSWER: D FV=1110; N=12; PV=-940’ PMT=16; COMP I/Y  2.9078 YTC = 2.9078 x 2 = 5.82% 6. Anthony plans to buy and hold a zero-coupon bond for one year. The face value of the bond is $1,000. The term to maturity of the bond is 8 years. The yield to maturity at the beginning of the year is 4.50% and the yield to maturity at the end of the year is 2.90%. What is Anthony's rate of return if he sells the bond after one year? (Assume annual compounding) A) 14.50% B) 2.90% C) 13.35% D) 20.19% Page 3 of 19

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E) 16.42% ANSWER: E Price at time 0: FV=1000; N=8; I/Y=4.50; PMT=0: COMP PV  703.19 Price at end of year 1: FV=1000; N=7; I/Y=2.90; PMT=0: COMP PV  818.84 HPR = 818.84/703.19 -1 = 0.1642 = 16.42% 7. Harley Inc. just paid a dividend of $6.80 per share. The dividend is expected to grow at a constant rate forever. The company has a dividend policy of paying out 43% of its earnings every year. The ROE (return on equity) of reinvestments is 11.40%. The required rate of return is 12.60%. What is the current stock price? A) $118.68 B) $111.44 C) $142.42 D) $92.87 E) $61.91 ANSWER: A P0 = DIV1/(r-g) g = RR X ROE = 57% x 11.40% = 0.06498 P0 = 6.80 x (1.06498)/(.126 - .06498) = = 7.2419/0.06102 = $118.68 8. Analysts predict that Green Inc.'s earnings and dividends will see growth of 5.60% annually for the foreseeable future. Shareholders of Green require a 14.90% annual return and the company just paid a $3.37 annual dividend. Based on this, what will be the price of Green’s stock in 4 years? A) $45.06 B) $47.58 C) $42.67 D) $50.25 E) $29.70 ANSWER: B P0 = DIV0 x(1+g)/(r-g) = [3.37 x (1.056)]/(.149 - .056) = 38.2658 P4 = P0 x (1+g)^4 = 38.2658 x (1.056)^4 = $47.58 Page 4 of 19

9. A project with a net investment today of $250,000 will generate $45,000 in net annual cash flows forever, starting at the end of year one. Calculate the project’s IRR. A) 18% B) 20% C) 22% D) 24% E) 28% ANSWER: A PV = C / r $250,000 = 45,000 / r R = 45,000 / 250,000 = 18% 10. Your company is experiencing capital rationing and looking to choose 1 of 2 competing projects. Project A will cost $25,000 upfront and generate annual cash flows of $7,500 for 5 years, project B will cost $9,000 upfront and generate cash flows of $3,000 for the next 5 years. Which project should you pick if the cost of capital is 7%? A) Project A because its NPV is higher B) Project B because its NPV is higher C) Project A because its Profitability Index is higher D) Project B because its Profitability Index is higher E) Project B because its IRR is higher ANSWER: D When a company is facing capital rationing, PI should be used NPV project A = -$25,000 + $30,751 = $5,751 PI project A = 5,751/25,000 = 0.23 NPV project B = -$9,000 + $12,301 = $3,301 PI project B = 3,301/9,000 = 0.37 11. What is the NPV of the following project that generates cash flows over the next five years at $1000, $5500, $7500, $5000, $8000 respectively? The project’s IRR is 9.13% and its internal cost of capital is 6%. A) $0 B) $1,573 C) $2,075 D) $5,436 E) $20,000 ANSWER: C PV of CF1= $1000, CF2 = $5500, CF3 = $7500, CF4 = $5000, CF5 = $8000 at Page 5 of 19

i=9.13% = $19,999 PV of CF1= $1000, CF2 = $5500, CF3 = $7500, CF4 = $5000, CF5 = $8000 at i=6% = $22,074 NPV = $22,074 - $19,999 = $2,075 12. What is the discounted payback for a project that costs $20,000 today and generates $10,000, $5,000, and $15,000 over the next three years, if the discount rate is 10%? A) 3.1 years B) 2.4 years C) 2.2 years D) 2.6 years E) 2.8 years ANSWER: D Year CF PV of CF Cumulativ e PV of CF 0 (20,000 ) (20,000 ) 1 10,000 9,091 (10,909) 2 5,000 4,132 (6,777) 3 15,000 11,270 4,493 Discounted payback = 2 + 6777/11270 = 2.6 years 13. A company is considering adding a new line of sandals to its existing portfolio. The company expects to sell 500,000 of these new units at a price of $15, and a variable cost of $10/unit. The new line of sandals will unfortunately cannibalize their existing flip/flop product where sales will be reduced by 100,000 units. Flip-flops have a price of $12 and a variable cost of $8/unit. Fixed costs are $200,000 and will not change. Ignore taxes. What is the operating cash flow to be used for evaluating this new project? A) $400,000 B) $1,600,000 C) $1,900,000 D) $2,000,000 E) $2,100,000 ANSWER: E OCF =(15-10)*500000 = $2,500,000 OCF reduction from cannibalization = (12-8)*100000 = -$400,000 Total impact = $2,500,000 - $400,000 = $2,100,000 Page 6 of 19

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14. Company XYZ is looking into purchasing a $1,000,000 machine that will allow for cost reductions (before tax) of $180,000 annually for 10 years. This machine is in a 15% CCA asset class and taxes are 25%. There are no net working capital constraints or any salvage value at the end of the project. What is the NPV of this project if the discount rate is 9%? A) -133,616 B) $16,182 C) $25,679 D) $124,591 E) $149,799 ANSWER: B Initial investment = -$1,000,000 FV of OCF PV = $866383; [PMT=$180,000x(1-25%); N = 10; FV = 0; IY = 9%] PVCCATS = (1000000*0.15*0.25)/(0.15+0.09)*(1+0.045)/(1+0.09) = $149,799 NPV = -$1000000 + $866383 + $149799 = $16,182 15. What is the change in NPV of a project if it can now generate a salvage value of $100,000 at the end of 10 years (versus the previously assumed $0 salvage value), if taxes are 20%, CCA rate is 15%, and the firm’s discount rate is 10%? A) $38,554 increase B) $35,867 increase C) $39,146 increase D) $43,180 increase E) $33,927 increase ANSWER: E CCA Impact = -(100000*0.15*0.2)/(0.15+0.1)*(1/((1+0.1)^10)) = -$4,627 PV of Salvage = 100000/(1+10%)^10 = $38,554 NPV = $38,554 - $4,626 = $33,927 increase 16. You are considering purchasing a new warehouse for $1,500,000 which will generate pre-tax annual cash flows of $185,000 for 15 years. The warehouse belongs to a 20% CCA asset class. You will also be required to invest $50,000 in net working capital which will be recovered at the end of the project. The warehouse will continue to have a value of $500,000 in 15 years. What is the NPV of this project if taxes are 20% and the discount rate is 7.5%? Page 7 of 19

A) -$171,136 B) $114,854 C) $128,286 D) $58.982 E) $97,640 ANSWER: C Initial Investment = -$1,500,000 PV = $1,306,414 [PMT=$185,000x(1-20%);N = 15; FV = 0; IY = 7.5%] PV of CCATS = (1500000*0.2*0.2)/(0.075+0.2)*(1+0.5*0.075)/(1+0.075) - (500000*0.2*0.2)/(0.075+0.2)*(1/((1+0.075)^15)) PV of CCATS = $185,991 PV of Salvage = 500000/(1+0.075)^15 = $168,983 PV of NWC = -50000 + 50000/(1+0.075)^15 = -$33,102 NPV = -1,500,000 + 1,306,414 + 185,991 + 168,983 – 33,102 = $ 128,286 17. ABC Corp. is conducting a sensitivity analysis to assess the impact on a project’s NPV. The only change is that annual cash fixed costs will increase from $2,100 this year to $2,300 next year. If ABC is profitable, in a 15% tax bracket, and has a 12% discount rate, then what is the impact on NPV over the one year? A) NPV decreases by $200.00 B) NPV decreases by $170.00 C) NPV decreases by $151.79 D) NPV decreases by $116.07 E) NPV decreases by $104.03 ANSWER: C Increase in costs of $200 Decrease in Pre-tax profit $200 Decrease in taxes of $200 * 15% = $30 Decrease in after tax profits of $200 - $30 = $170 (cash flow) PV of $170 discounted at 12% = $151.79. 18. ABC Corp.’s current sales are $8 million, variable costs $4.5 million, fixed costs $1.2 million and depreciation $1 million. At what level of sales revenue will ABC earn a profit of zero dollars? Page 8 of 19

A) $3,911,111 B) $5,028,571 C) $6,157,377 D) $6,345,650 E) $7,222,469 A NSWER : B B/E Sales Revenue = (F/C + Depreciation) / Contribution per $ sale Contribution per $ sales = ($8,000,000/$8,000,000 - $4,500,000/$8,000,000) = ($1 - $0.5625) B/E Sales Revenue = ($1,200,000 + $1,000,000) / ($1 - $0.5625) = $5,028,571 Use the following information to answer the next 2 questions: 19. MNU Corp. invests in project “A” that generates $12,000 in revenue annually, requires fixed costs of $2,000 each year and allows MNU to claim depreciation of $1,000 each year. The variable costs are two thirds of sales. If sales revenue were to increase by 5%, then pre-tax profit will increase by _______ , assuming all other variables remained the same. A) 5 percent B) 10 percent C) 15 percent D) 20 percent E) 25 percent A NSWER : D Pre-tax profits currently = Revenue - variable costs - fixed costs - depreciation = $12,000 - $8,000 - $2,000 - $1,000 = $1,000 Pretax profits after 5% sales increase = ($12,000 * 1.05) - ($8,000 * 1.05) - $2,000 - $1,000 = = $12,600 - $8,400 - $2,000 - $1,000 = $1,200 A pre-tax increase of $200 or ($200 / $1,000) = 20%. 20. Based on the above information, what is MNU’s degree of operating leverage when sales revenue was $12,000? A) 1.0 Page 9 of 19

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B) 1.5 C) 3.0 D) 4.0 E) 4.5 ANSWER: D DOL = 1 + [(Fixed Costs + Depreciation) / Pre-tax profit] = 1 + [(2,000 + 1,000) / 1,000] = 4.0 21. ABC Corp’s stock had annual returns of 17.61%, -8.71%, 7.19%, and 12.99% from 2019 to 2022. What is the standard deviation of its returns over this period? A) 4.2% B) 11.47% C) 18.74% D) 7.21% E) 9.94% ANSWER: B Calculate the standard deviation of the sample returns Average return = (17.61 - 8.71 + 7.19 + 12.99) / 4 = 7.27; Variance = ((17.61 - 7.27)^2 + (-8.71 - 7.27)^2 + (7.19 - 7.27)^2 + (12.99 - 7.27)^2 ))/(4 - 1) = 131.67 Standard deviation = 131.67^0.5 = 11.47% 22. Next year’s forecast for XYZ Corp’s stock price is noted below, based on three possible economic scenarios: Scenario Probability Dividend Stock Price Boom 30% $0.50 $19.50 Normal 50% $0.20 $10.00 Recession 20% $0 $0 The stock price today is $9 per share. What is the expected return if you buy the stock today and sell it a year from now? A) 20.56% B) 12.27% C) 13.61% Page 10 of 19

D) 23.33% E) 27.43% ANSWER: D E(r) Boom = [0.50 + (19.50 - 9.00)] / 9.00 = 122.22% E(r) Normal = [0.2 + (10.00 - 9.00)] / 9.00 = 13.33% E(r) Recession = [0 + (0 - 9.00)] / 9.00 = -100.00% E(r) = 0.3*122.22 + 0.5*13.33 + 0.2*(-100) = 23.33% 23. KLM Corp. has bonds with 20 years to maturity, an 8% coupon rate, and pay interest every 6 months. The $1,000 face value bonds currently trade at $686.86 and KLM’s tax rate is 40%. Based on this information what is KLM’s after-tax cost of debt? A) 4.8% B) 7.33% C) 7.56% D) 12.22% E) 6.94% ANSWER: B Solve for the bonds YTM N = 40; PV = $-686.86; PMT = $40; FV = $1,000 I/Y = 6.11% periodic rate YTM = 12.22% Rd after-tax = 12.22% x (1 - T) = 12.22% x (1 - 0.4) = 7.33% 24. Based on the following information determine the systematic risk of security X. Security Expected Return Beta X 8% ? Y ? 2.3 Return on market portfolio = 6% Return on risk-free asset = 3% A) 0.56 B) 0.83 C) 1.33 D) 1.67 E) 1.83 ANSWER : D Page 11 of 19

Re-arrange the CAPM formula to solve for Beta Beta X = (E(r) – Rf) / (Rm – Rf) = (8% - 3%) / (6% - 3%) = 1.67 Beta X = (8% - 3%)/(6% - 3%) = 1.67 25. What would be the expected return on a portfolio that was 45% invested in an index that represented the broader stock market and 55% in treasury bills. Assume the risk- free rate of return was 6.7% and that the market risk premium was 7.2%? A) 6.93% B) 9.94% C) 10.75% D) 13.90% E) 15.16% ANSWER : B Portfolio β = 0.45 (1.0) + 0.55 (0.00) = 0.45. Using CAPM E(r) = rf + β (rm - rf) E(r) = 0.067 + 0.45 (0.072) = 0.0994 or 9.94%. 26. Amherst Inc. has 210,000 shares of common stock outstanding at a market price of $21 per share and has a beta of 0.80. The market risk premium is estimated at 7% and the Treasury bill rate is 4%. Amherst also has $400,000 in par value bonds that are selling at 102 percent of face value. What proportion of the firm is financed with debt? A) 8.46% B) 11.51% C) 10.2% D) 9.87% E) 13.5% ANSWER: A Market value CS = 210,000 x $21 = $4,410,000 Market value debt = 400,000 x 1.02 = $408,000 D/V = 408,000/ [4,410,000 + 408,000] = 0.0846 or 8.46% 27. Forester Group wants to invest in a project that has the same level of risk as the company’s existing business. Currently it has a debt-to-equity ratio of 2/3. The stock has a beta of 1.40. The market value of its debt is $236 million with a yield to maturity of 8%. Currently the T-bill return is 1.5% annually and the market risk premium is 5%. If the Page 12 of 19

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company has a 40% tax rate, what minimum rate of return should the company require on the project? A) 5.15% B) 8.96% C) 7.02% D) 8.50% E) 9.33% ANSWER: C Cost of equity: Re = 1.5% + 1.4 x 5% = 8.5% Cost of debt (after tax) = 0.08 x (1 – 0.4) = 0.048 = 4.8% Given D/E = 2/3, → D+E = V → 2 +3 = 5 D/V = 2/5 = 40% and E/V = 3/5 = 60% WACC = [0.4 x 4.8%] + [ 0.6 x 8.5%] = 7.02% 28. Book value of Big Door Company assets is $80 million. The company has 60% debt, and the rest is equity-financed. Due to recent events, the 6 million shares outstanding are currently trading at only $4 per share, and the market value of its debt securities is 20% below the face value. The shareholders now demand a 20% rate of return and the bondholders’ required return (after-tax) is 14%. The company is considering a project that has the same risk as the overall company. This project has an initial cost of $630,000 and after-tax cash inflows of $450,000 per year for 2 years. What is the NPV of the project? A) $79,525 B) $89,630 C) $68,153 D) $92,055 E) $57,833 ANSWER: B Before: V = E + D = $80 million = 32 + 48 Now: E+D = V = (6mill x $4) + (48 *.8) = 24 + 38.4 = $62.4 million WACC = 24/62.4 * 0.2 + 38.4/62.4 * .14 = 0.076923 + 0.086154 = 0.1630 or 16.30% NPV = -630,000 + PV [ n = 2, I/Y = 16.3%, PMT = 450,000] = -630,000 + 719,630.57 Page 13 of 19

= 89,630.57 29. Evergreen Sports has issued debt with a market value of $28 billion. The bonds have 8 years to maturity, pay annual coupons, have a current yield of 8%, and are priced at $950 per $1000 face value. The company has a book value of common equity of $20 billion, and its 1.8 billion common shares are trading at $18 per share. It just paid an annual common dividend of $1.593 per share and the dividend growth rate is 4%. Evergreen also has preferred stock worth a total of $6 billion, currently trading at $54 per share and paying a dividend of $4.50 per share. The corporate tax rate is 30%. Calculate the WACC for the firm. A) 7.2% B) 6.6% C) 5.2% D) 8.9% E) 9.7% ANSWER: E Annual coupon = 0.08 x 950 = $76 -950 = PV, 1000 = FV, 76 = PMT, 8= N, CPT I/Y = 8.4861% Cost of debt = (1 – 0.30) x 8.4861% = 5.9402% Market value of equity = 1.8 x $18 = $32.4 billion Cost of equity = (1.593 x 1.04)/18 + 0.04 = 0.132040 or 13.2040% Cost of PS = 4.5/54 = 0.083333 or 8.3333% WACC = [28/66.4 * 0.059402] + [6/66.4 * 0.083333] + [32.4/66.4 *0.132040] = 0.025049 +0.007530 +0.064429 = 0.097008 or 9.7% 30. Sunshine Bowling needs to raise $2 million for a 6 month period. Bank A quotes a simple interest rate of 7% annually but requires the firm to maintain an interest-free compensation balance of 20%. Whereas Bank B quotes a discount interest rate of 7.5%. What is the difference between the cost of this bank loan when quoted with a compensating balance versus when it is borrowed on a discount basis? A) The compensating loan is 0.642% per year cheaper. Page 14 of 19

B) The discount loan is 0.997% per year cheaper. C) The discount loan is 0.642% per year cheaper. D) The compensating loan is 0.997% per year cheaper. E) Both charge the same effective annual interest rate. ANSWER: B Bank A EAR: (1+ 70,000/1,600,000) 2 – 1 = 0.08941 or 8.941% Bank B EAR: [1/(1 – 0.075/2)] 2 – 1 = 0.07944 or 7.944% Difference 8.941% - 7.944% = 0.997% 31. Dino Corporation has $20 million in average inventory, $4 million of average trade receivables, and $5.2 million of average trade payables. The company has annual sales of $48 million and its annual cost of sales is $26.5 million. What is the cash conversion cycle of Dino Corporation? A) 192 days B) 234 days C) 162 days D) 305 days E) 284 days ANSWER: B CashConv .cycle = inventory period + trade receivables period – t rade payables period ¿ $ 20,000,000 ( $ 26,500,000 365 ) + $ 4,000,000 ( $ 48,000,000 365 ) − $ 5,200,000 ( $ 26,500,000 365 ) = ( 275.47 + 30.42 − 71.62 ) days = 234.27 ∨ 234 days 32. Gloria’s Pancakes currently orders pancake mix once a week. The mix is used up by the end of the week, at which point more is reordered. Each time Gloria orders pancake mix, she spends about a half hour of her time, which she estimates is worth $20. Gloria sells 200 pounds of reconstituted pancakes each week. The carrying cost of each pound of the mix is $0.05 per week. How many times per month should Gloria restock? A) Twice a week B) Once a month C) Twice a month D) Once a week E) Once every three weeks Page 15 of 19

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ANSWER: C Q* = = 400 The optimal order size is 400 pounds, meaning that she should reorder 400 pounds at a time every other week i.e. twice a month 33. The Branding Iron Company currently offers terms of sale of 4/30, net 90 to its customers. What is the effective annual rate it is charging its customers who take the full 60 days to pay? A) 35.67% B) 64.32% C) 40.90% D) 28.19% E) 44.95% ANSWER: D EAR = (1 + 0.04/0.96) 365/60 – 1 = 0.28188 = 28.19% 34. Suppose that your weekly cash expenses are $80. Every time you withdraw money from the automated teller at your bank, you are charged $.15. Your bank account pays interest of 3% annually. What is your optimal-sized withdrawal? A) $102 B) $269 C) $204 D) $194 E) $359 ANSWER: C Annual cash disbursements = $80 x 52 = 4,160 Q = = 203.96 = $204 35. Which of the following decisions is most appropriate when a potential customer presents an 80 percent chance of paying in one month, on a $11,000 sale, that has a present value of cost of $8,800 when the monthly interest rate is 1.5%? A) Grant credit since expected profit is $230.56 B) Refuse credit since expected profit is zero. Page 16 of 19

C) Grant credit since expected profit is $1,629.50. D) Refuse credit since the expected loss is $1,760.25. E) Refuse credit since expected loss is $130.05. ANSWER: E = [.80 x ((11,000/1.015)-8,800)] + 0.20 (-8,800) = 1,629.95 – 1,760 = -130.05 CONCEPTUAL QUESTIONS 36. Which of the following statements is most likely correct for a project with a positive NPV? A) Accepting the project has a negative effect on shareholders B) The discount rate exceeds the cost of capital C) Its IRR exceeds the cost of capital D) The profitability index equals one E) The profitability index will be zero. ANSWER: C 37. When determining whether an existing machine should be replaced by a new machine, we should calculate and compare the _____. A) profitability indexes B) equivalent annual costs C) internal rates of return D) net present values E) discounted payback periods ANSWER: B 38. Which of the following costs probably should NOT be allocated to the NPV calculation for a new project that requires a new building on land already owned by the company? A) Marketing costs for the new project B) The cost of a new warehouse, currently being built for this project C) Labour expense for employees who are working in new warehouse D) Allocated property taxes for the land being used by the new building E) Increase in inventory ANSWER: D 39. What effect will a reduction in the cost of capital have on the accounting break-even Page 17 of 19

level of revenues? A) It raises the break-even level B) It reduces the break-even level C) It has no effect on the break-even level D) This cannot be determined without knowing the length of the investment horizon E) It depends on the tax rate ANSWER: C 40. Which of the following statements is correct concerning sensitivity analysis? A) It ignores interrelationships between variables B) Several variables are allowed to change concurrently C) It considers all feasible variable combinations D) Its results are free from ambiguity E) It requires a computer to assess all combinations of variables ANSWER: A 41. According to CAPM, a stock's Beta measures the: A) average return on the stock. B) variability in the stock's returns compared to that of the market portfolio. C) difference between the return on the stock and return on the market portfolio. D) market risk premium on the stock. E) the standard deviation of a stock's returns over one year. ANSWER: B 42. Which of the following risks is most important to a well-diversified investor in common stocks? A) credit risk B) unique risk C) total risk D) diversifiable risk E) market risk ANSWER: E 43. A firm is considering manufacturing a new product line. The cost of capital associated with the new product line depends on: A) the book value of the firm's outstanding equity. B) the coupon rate on their existing debt. C) the form of financing used for the product. D) the degree of risk for the new product. E) the dividend yield on the firm's common shares. ANSWER: D Page 18 of 19

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44. Which statement is TRUE about terms of sale of 2/10, net 60? A) A 10% cash discount is offered for payment before 60 days. B) No cash discount is offered after Day 10. C) A 8% cash discount can be taken for payment before Day 50 (60 – 10). D) A 10% cash discount can be taken if paid by the second day after invoicing. E) A 2% late charge is added if the payment is made after Day 10. ANSWER: B 45. A company’s cost of debt when calculating its WACC _____ A) Will be a function of the yield to maturity on similar debt in the marketplace B) Will generally be higher than its cost of equity C) Can be calculated using the capital asset pricing model D) Can be calculated using the dividend discount model E) Can be determined from its dividend payout policy and the firm’s tax rate ANSWER: A **END OF EXAM** Page 19 of 19

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O Odysseyware Ô https://sfdr.owschools.com/owsoo/studentAssignment/index?eh=65534403 San Felipe Der RIO CISD- IS JALYN GARCIA Odysseyware LEARN MESSAGE HELP SIGN OUT Assignment - 1. Credit Scores and Loans Attempt 1 of 1 ASSIGNMENTS COURSES SECTION 3 OF 4 QUESTION 6 OF 8 1 2 4 5 >> Match the option with the lowest monthly payment to highest monthly payment. $12,000 loan with 1% simple 1. lowest payment interest over 7 years $7,500 loan with 4% simple interest 2. second highest payment over 5 years $8,500 loan with 2% simple 3. third highest payment interest over 6 years $10,000 loan with 3% simple 4. fourth highest payment interest over 4 years 9:19 PM 后 ENG 2/4/2021 P Type here to search R

ccounting | Spring 2023 uiz Course Home - kar X K Chapter 9 Quiz OA. $18,200 OB. $18,800 OC. $17,500 O D. $20,300 mylab.pearson.com Question 5 of 10 X G At year-end, Snow 0 4 kara harper 04/09/23 10:36 AM This quiz: 10 point(s) possible This question: 1 point(s) possible ? Submit quiz Buddy Company uses the allowance method to account for uncollectible receivables. At the beginning of the year, Allowance for Bad Debts had a credit balance of $800. During the year Buddy wrote off uncollectible receivables of $2,100. Buddy recorded Bad Debts Expense of $2,800. Buddy's year-end balance in Allowance for Bad Debts is $1,500. Buddy's ending balance of Accounts Receivable is $20,300. Compute the net realizable value of Accounts Receivable at year-end.

Eat min C e New tab Λ Content xW Quiz 3-MAT-143, section 03F, Fa X + Q A ✩ https://www.webassign.net/web/Student/Assignment-Responses/last?dep=34832472 Viewing Saved Work Revert to Last Response DETAILS MY NOTES You deposit $850 in an account paying an annual simple interest rate of 7.8%. Find the future value of the investment (in dollars) after 1 year. DETAILS MY NOTES Calculate the simple interest due (in dollars) on a 40-day loan of $1,600 if the annual interest rate is 9%. (Use 360 days in 1 year.) $ DETAILS MY NOTES

все Google Chrome - D... My Learning Progre... N Northwestern Univ... Solution Manual Fo... Business Law Question 28 of 40 View Policies Show Attempt History < Current Attempt in Progress X Your answer is incorrect. 0/0.3 Your grandfather has agreed to deposit a certain amount of money each year into an account paying 7.90 percent annually to help you go to graduate school. Starting next year, and for the following four years, he plans to deposit $2,350, $8,600, $7,200, $6,600, and $12,150 into the account. How much will you have at the end of the five years? (Round answer to 2 decimal places, e.g. 15.25.) Future value at end of five years eTextbook and Media Save for Later Using multiple attempts will impact your score. 20% score reduction after attempt 2 Q Search 41719.11 GUND Attempts: 1 of 3 used Submit Answer

My Questions | bartleby b + Camden County College References Chapter 3 Quiz Ha X //camdenccinstructure.com/courses/3788/assignments/35967?module item id=88693 Next> Send to Gradebook < Prev Submitted to Gradebook, Fri, Oct 4, 2019, 9:34:35 AM (America/New York -04:00) Question 19 -/1 View Policies Current Attempt in Progress A process with no beginning work in process, completed and transferred out 85200 units during a period and had 50100 units in the ending work in process inventory that were 20% complete. The equivalent units of production for the period for conversion costs were: O 95220 equivalent units. O 135300 equivalent units. O 70200 equivalent units. O 85200 equivalent units. eTextbook and Media Attempts: 0 of 1 used Submit Answer Save for Later 11:21 AM 10/4/2019 hp ins prt sc 12 end 11 home f10 delete fg f8 f5 f4 II & num backspace 6 5 lock } { P T U Y home + 96

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V Content Pearson (Assignments) - MA Ô https://www.mathxl.com/Student/PlayerTest.aspx?testld%3D225147196 3 103 Spring 2021 st: Test 2 (Finance) Online nis Question: 1 pt 5 of 19 (1 complete) ▼ How much must be deposited today into the following account in order to have a $135,000 college fund in 11 years? Assume no additional deposits are made. An account with quarterly compounding and an APR of 7.32% Sshould be deposited today. (Do not round until the final answer. Then round to the nearest cent as needed.)

Courses Mastering Chernie X 2MateryCheme X loud/modules/unproctoredTest.QuestionSheet McCraith-Sectic x Updte Help Caroline Achienge S01243611acadceduLogout all 2021 I Chapter 1 Consumer Finance / Section 1.5 Digital Exercises Gradebook. Extemat kercises Remaining Time Unimted Suppose you are paid $3,000 per month and your employer's 401(k) matches your contributions by 10% up to a maximum of 15% of your pay. Assuming you max-out your retirement savings and you work for 25 years, how much will the 401(k) be worth when you retire (if you can get an APR of 8% during your work years)? If you are taxed at a rate of 27%, then how much will you have when you retire? Round all answers to 2 decimal places. Before taxes retirement amount $ Number After taxes retirement amount $ Number Submit Assignment Quit & Save Васк Question Menu 4 Next 38°F Partly sunny A 0) 411 PM 11/19/202 end home delete prt sc 144 4+ 4- 40 num lock backspace & 8. 6. 7. home |近

My Blackboard MTH101 B01 - QUANTITATIVE LITERACY (Fall 2021 Credit Courses) Homework Homework 1.3 Homework 1.3 Score: 0/19 2/8 answered X Question 3 > Score on last try: 0 of 1 pts. See Details for more. > Next question 2 Get a similar question You can retry this question below You deposit $6000 in an account earning 5% interest compóunded monthly. How much will you have in the account in 15 years? $ 8,540.57 Question Help: Message instructor Submit Question МacBook Air 000 D00 F6 F5 F4 esc F2 F3 F1 %24 并

Study Excel Instructio x EXAM 3-BUSI 320 class notes x b Login (bartieby es/155996/assignments/1958552 E Individual Differen... M Corporate Finance U SPAN101: Element... L Canvas Dashboard U Course Registration out # 4 Comp Prob - Ch 12 (D).docx I Downle Case Study # 4 Excel Submission – Capital Budgeting Comprehensive Problem Pinnacle Custom Home Builders purchased a 40 foot articulating boom lift three years ago for $50,000. The equipment has been depreciated under the 5-year MACRS schedule (20%, 32%, 19%, 12%, 12% & 5%). The old equipment can be sold for $33,000. Pinnacle is considering the purchase of a new 60 foot articulating boom lift that would allow the company to complete nearly all of its construction projects without the need for costly rental lifts. The new lift could be purchased for $105,000 and would also fall under the 5-year MACRS depreciation schedule. Assume the old and new equipment would provide the following operating gains (or losses) over the next six years.…

https://sfdr.owschools.com/owsoo/studentAssignment/index?eh=65534403 SSIGNMENTS Assignment - 1. Credit Scores and Loans Attempt 1 of 1 COURSES SECTION 3 OF 4 QUESTION 1 4 8 You get a personal loan of $5,000 with 12% simple interest too be paid over 30 months. What is your monthly payment? O $150.00 O $166.67 O $216.67 O $175.00 NEXT QUESTION O ASK FOR HELP TURN IT IN e to search Pause T H K B N M Alt Ct

Odysseyware Ô https://sfdr.owschools.com/ows00/studentAssignment/index?eh=65534412 San Felipe Del RIO CISD-TIS JALYN GARCIA Odysseyware LEARN MESSAGE HELP SIGN OUT Assignment - 3. Automobile Loens Attempt 1 of 1 ASSIGNMENTS COURSES SECTION 2 OF 4 QUESTION 2 OF 6 《く 11 4 5 6 3 > » Miguel takes a car loan for $16,000. The loan is for 60 months and has an interest rate of 4%. There are an additional $1,000 of fees. What is the APR for this loan? O 6.25% O 6.4% O 8.6% O 10.25% NEXT QUESTION O ASK FOR HELP TURN IT IN P Type here to search 11:20 PM G 10 ENG 2/6/2021 G C 2N M 中 o

os.schoolsplp.com/enrollments/156569804/items/YUI32/work?prev3LNSDS O Western Brown Loc. Desmos | Graphing. A ALEKS- Gracie Glov. M My Classes | McGra. A Classes Next Activity > els B: Lesson 1 - Salary Target due: 1/14/21 58.33% $344.75 $700 2) Choose the best answer. Caleb has a job that pays $11.15 per hour for a 40-hour work week. He is paid time and a half for every hour over 40 that he works in a week. What will his gross pay be for a week in which he works 46 hours? NTT $546.35 $446 $512.90 $256.45 $769.35 O O O O O

New tab x Content x Quiz 3-MAT-143, section 03F, Fax + https://www.webassign.net/web/Student/Assignment-Responses/last?dep=34832472 a A ✰ DETAILS MY NOTES ASK YOUR TEACHE A newspaper editor starts a retirement savings plan in which $225 per month is deposited at the beginning of each month into an account that earns an annual interest rate of 6.4% compounded monthly. Find the value of this investment (in dollars) after 20 years. (Round your answer to the nearest cent.) $ DETAILS MY NOTES ASK YOUR TEACHI logo design company purchases four new computers for $12,500. The company finances the cost of the computers for 3 years at an annual interest rate of 5.175% compounded monthly. Find the month ayment (in dollars) for this loan. (Round your answer to the nearest cent. See Example 8 in this section.) Submit Assignment Home My Assignments Request Extension Copyright © 1998-2024 Cengage Learning, Inc. All Rights Reserved | TERMS OF USE PRIVACY 12:03 PM

Spring 2021 Final Exam(2) - Saved to this PC - erences Mailings Review View Help 三三|A|T AaBbCcD AaBbCcDc AaBbC AABBCCC AaB I Normal T No Spac... Heading 1 Heading 2 Title Paragraph Styles 3-Michael Cool's employer offers its workers an optional two-month unpaid vacation after 7 years of service to the firm, who just started working for the firm, plans to spend his vacation touring Europe at an estimated cost of $24,000. To finance his trip, Robert plans to make an annual deposit of $2,500 into a savings account at the end of the next seven years (first deposit will occur one year from today. The account pays 8% annual interest rate, a. Will Michael's account balance in seven years be enough to pay for his trip? b. Suppose Michael increases his annual deposit to S2,700. How large will his account balance be in seven years? 4- The Robinson Company has the following current assets and current liabilities for these two

17.39 .. 90 PROBLEMS OF SEMESTER FINAL TEST 2021 Word es Mailings Review View Help O Tell me what you want to do Aa - AaBbCeDd AaBbCcl AaBbCcDe AaBbCcDe AaBt Heading 2 Heading 3 T Normal I No Spac. Headin Paragraph Styles 4.5.6 7 8.. 9. • 10. 11 12. 13. 14. 15.I Thursday : January 21, 2021 --- 80 Minutes 1. In this section we examine three theories of investor preference: The dividend irrelevance theory. The "bird in the hand" theory, the tax preference theory, which theory is the best? What is the different of stock dividends, stock splits, and stock repurchase. 2. In the working capital management, we know about cash conversion cycle model. For problem if average inventories are $3 million and sales are $11 million. If receivables are S 657.535 and sales are S 11 million. Then, if its cost of goods sold are $9 million per year and if its accounts payable average $ 657.535. What is the length of the cash conversion sicle? 3. The ELGRAJO Corporation has capital structure as follow…

The first closing entry would include a a. Debit to c Finley capital for $155,000 B. Credit to c Finley capital for $50,000 c. Debit to c Finley capital for $50,000 D. Credit to c Finley capital for $155,000

PowerSchool Leaming : Portal : D A ANet Online 4DC a login.achievementnetwork.org/tutti/learn/assignments/viewAssignment.svc?ciid3FE954372A54D406885C1144055.. A1 Math Algebra II 20-21 Form MT Online Screen Settings 9 of 9 * Full Screen I Sa Main Street Bank has savings accounts that earn 0.8% interest per month. All deposits, interest payments, and account closures are processed on the first day of a month Part A Assume a customer deposits the same amount of money, x, in dollars, each month. Write an expression that can be used to determine how much money would be in a savings account from Main Street Bank after n months. Respond in the space provided. Part B Luciana and Valerie are both opening savings accounts at Main Street Bank and will close their savings accounts at the end of their savings strategy Luciana's savings strategy is to deposit $200 each month for 24 months. Valerie's savings strategy is to deposit $400 each month for 12 months. Whose savings strategy will result in…

Auditing || fall20 Dashboard My courses ACCT4141_iram_fall20 WEEK 7: 25 OCTOBER - 31 OCTOBER Case study 2 Separate groups: 5 My Submissions Case 2 Title Start Date Due Date Post Date Marks Available Case study 2 - Case 2 27 Oct 2020 - 08:00 28 Oct 2020 - 06:00 28 Oct 2020 - 19:00 100 Summary: On Chapters 9, 10, and 11: The YuRaeKa charity was established in 1960. The charity’s aim is to provide support to children from disadvantaged backgrounds who wish to take part in sports such as tennis, badminton, squash, basketball and football. YuRaeKa has a detailed constitution[1] which explains how the charity’s income can be spent. The constitution also notes that administration expenditure cannot exceed 10% of income in any year. The charity’s income is derived wholly from voluntary donations. Sources of donations include: (i) Cash collected by volunteers asking the public for donations in shopping areas, (ii) Cheques sent to the charity’s head office, (iii) Donations…

MindTap - Cengage Learning 2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSession Locator=&inprogress=false ork items week 6: Homework eBook Salary State income taxes Exercise 12-22 (Algorithmic) (LO. 2, 3, 5) Yanni, who is single, provides you with the following information for 2021: CengageNOWv2 | Online teachin X Print Item Mortgage interest expense on principal residence Charitable contributions Interest income a. Yanni's taxable income: b. Yanni's AMT base: Check My Work Click here to access the exemption table. If required, round your answers to the nearest dollar. Compute the following: c. Yanni's tentative minimum tax: $117,400 11,740 10,566 2,348 1,761 94,507 32,647 X + 8,488

5:42 AM Tue Nov 16 * 100% www-awu.aleks.coma Exam 2, 7.3-9.4 REVIEW Report Overall Assignment Score: 73% (Best Score) Ninotchka V Score. O O pont Submitteu. NOV Z 7.32 1 IVI Tme Spet. S s Español Incorrect Your answer is incorrect. Salma wants to save money to open a tutoring center. She buys an annuity with a monthly payment of $27 that pays 3.7% interest, compounded monthly. Payments will be made at the end of each month. Find the total value of the annuity in 10 years. Do not round any intermediate computations, and round your final answer to the nearest cent. If necessary, refer to the list of financial formulas. 圖 Answer Submitted: 00 $12345.92 Correct Answer: $3913.49 Assignments List EVEI IVIUIawll LLC. All Rights Reserved. Terms of Use Privacy Center Accessibility II

Perform a categorical analysis on the majors of students enrolled in the MBA. Describe your findings.

Font Paragraph Styles Editing Dictate Editor Paste Undo Clipboard Styles Voice Editor a) Will credit cards help? The average undergraduate student leaves college with a diploma and around $2750 in credit card debt (graduate students; $4800). Suppose you have a credit card with a balance of $2750 and an interest rate of 19.8% APR. The minimum payment is $45.00. The amount of interest due each month is figured as current balance where r is the rate (decimal form) and n is 12. Fill in the table, making minimum payments. Current balance Month Interest Payment Amount applied to principal 1 $2750.00 $45.38 $45.00 -$0.38 $2750.38 $45.00 $45.00 4 $45.00 $45.00 $45.00 $45.00 8. $45.00 9. $45.00 10 $45.00 11 $45.00 12 $45.00 Page 4 of 6 1011 words DFocus 80% P Type here to search 立

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