Activity3

“Suppose that you have been given a summer job at J limited, a company that manufactures sophisticated radar sets for commercial aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its tremendous growth. The bank requires financial statements before approving such a loan. You have been asked to help prepare the financial statements and were given the following list of costs: The cost of the memory chips used in a radar set. Factory heating costs. Factory equipment maintenance costs. Training costs for new administrative employees. The cost of the solder that is used in assembling the radar sets. The travel costs of the company’s salespersons. Wages and salaries of factory security personnel. The cost of air-conditioning executive offices. Wages and salaries in the department that handles billing customers. Depreciation on the equipment in the fitness room used by factory workers. Telephone expenses incurred by factory management.…

Consider a firm with a contract to sell anasset for $115,000 three years from now. The asset costs $76,000 to produce today.Given a relevant discount rate on this asset of 13 percent per year, will the firm makea profit on this asset? At what rate does the firm just break even?

company wants to issue a 15-year Bond with $1,000 face value and an 8% Annual coupon. the bond can be sold to investors for $1,010 per Bond but will incur transaction cost of $15 per Bond if the company tax rate is 21%. what is the after-tax cost of debt financing to the firm?

A lathe costs $56,000 and is expected to result in net cash inflows of $20,000 at the end of each year for three years and then have a market value of $10,000 at the end of the third year. The equipment could be leased for $22,000 a year, with the first payment due immediately. If the organization does not pay income taxes and its MARR is 10%, show whether the organization should lease or purchase  the equipment.

If a $900,000 30-year fully amortizing fixed rate mortgage loan from City National Bank has an annual interest rate of 6.25% with a monthly payment of $5,541.45, and a $900,000 15-year fully amortizing fixed rate mortgage loan from Wells Fargo Bank has an annual interest rate of 5.25% with a monthly payment of $7,234.90, a borrower should: a. Choose the 30-year fixed rate loan from City National Bank because of the lower monthly payments   b. Make a careful analysis of all the terms and conditions of the available loans to determine which loan is better for that borrower under the circumstances, or if another loan or lender should be considered   c. Choose a 7-year adjustable rate interest-only loan from PNC Bank instead with a low teaser interest rate of 1.0% for the first loan year   d.Choose the 15-year fixed rate loan from Wells Fargo because of the lower interest rate

A borrower bought a house for $250,000; he can obtain an 80% loan with a 30-year fully amortizing, 6% interest rate and monthly payment. Assuming the marginal tax rate for the borrower is 25%. Maintain and insurance are currently $1,200 each per year, Selling cost is 6% of sale; property tax is 2% of the value each year, property value increases 5% per year. What is the first year total tax deduction from owning? $4250.0 $4920.71 53940.0 $3729.25

The Hard Rock Mining Company is developing cost formulas for management planning and decision-making purposes. The company’s cost analyst has concluded that utilities cost is a mixed cost, and he is attempting to find a base with which the cost might be closely correlated. The controller has suggested that tons mined might be a good base to use in developing a cost formula. The production superintendent disagrees; she thinks that direct labor-hours would be a better base. The cost analyst has decided to try both bases and has assembled the following information:     Quarter TonsMined DirectLabor-Hours   UtilitiesCost   Year 1:             First 25,000     6,000     $ 60,000         Second 17,000     4,000     $ 55,000         Third 30,000     5,000     $ 70,000         Fourth 22,000     7,000     $ 85,000       Year 2:             First 28,000     11,800     $ 118,000         Second 35,000     10,800     $ 123,000         Third 40,000     9,800     $ 95,000…

Suppose that your monthly net income is $2,950. Your monthly debt payments include your student loan payment and a gas credit card. They total $590. What is your debt payments-to-income ratio? %

Please show all work and explain answer. OneRing Company sells memorabilia to residents of Middle-Earth. They are about to invest $6 million in a new ring making plant.   Fixed costs of operating the plant are $1 million a year. The ring costs $60/unit to manufacture (variable cost) and will be sold for $200/unit. The plant will last for 5 years, and will be depreciated over 5 years to zero using the straight-line method. The plant will have no salvage value after five years.   Net working capital requirements are negligible for this project. Assume there are no taxes in Middle-Earth, and that the appropriate discount rate for the project is ten percent.   How many rings per year must OneRing sell in order to break even?

You have decided to endow your favorite university with a scholarship. It is expected to cost $15,000 per year to attend the university into perpetuity. You expect to give the university the endowment in 5 years and will accumulate it by making equal annual (end-of-year) deposits into an account. The rate of interest is expected to be 8% for all future time periods. a) How large must the endowment be? b) How much must you deposit at the end of each of the next 5 years to accumulate the required amount?

If $ 650 is deposited at the end of each quarter into an account paying 11% compounded quarterly, how much money will be in that account after 6 years? Round your answer to two digits!

The actual cash value of a property is BEST described as: OA its original cost only its original cost less depreciation its replacement cost less depreciation the cost to repair or rebuild the property OD. Re

Economics Daegu considers producing electric razors for men. If the market demand is high, he would get a return of $100,000, but if there were a low demand for this type of razor, he would lose $60,000. Daegu also considers the possibility of ordering a market survey to gather additional information about the market demand. The survey includes a sophisticated questionnaire administered to a test market and costs $5,000. Daegu believes that there is a 62:38 chance that the market information will be favorable (i.e., predicting a high market demand) and unfavorable (i.e., predicting a low market demand). Furthermore, the probabilities of a favorable survey given a high market demand and an unfavorable survey given a low demand are both 0.8. Daegu is not sure if the value of the survey is worth the cost Draw the decision tree and advise Daegu

You're working with a buyer who wants to make an offer on a house. You check the Flood Insurance Rate Maps and see that the property is located in a V Zone. What should you tell the buyer? This coastal property is not considered a high- risk category on the FIRM maps, so insurance is not required. The property is in a special flood hazard area, and flood insurance will be required if the buyer intends to use a federally insured or regulated lender. The property is in a 100-year flood plain, so flood insurance is encouraged but not required by lenders. The property is considered to be very valuable and is likely to increase in value in the near future.

Your boss would like your help on a marketing research project he is conducting on the relationship between the price of juice and the quantity of juice supplied. He hands you the following document: Price of Juice Quantity of Juice Supplied (Dollars per can) (Billions of cans) 0.50 750 0.75 1,000 1.00 1,500 1.25 2,000 Your task is to take this and construct a graphical representation of the data. In doing so, you determine that as the price of juice rises, the quantity of juice supplied increases. This confirms the

A Chevrolet Sonic Hatchback costs $ 14,800.00. With a 13% down payment, you can have an amortized loan for 9 years at a rate of 4%. What will the monthly payment be? how much will the car cost in total? how much money paid in interest?

With the help of an attorney, you are guiding a client through creating a lease. The client will be leasing a commercial property. They think their lease should reflect how well their business is doing in terms of sales. Based on these facts, evaluate what kind of lease the client should use. percentage lease ground lease gross lease variable lease

Hello, can you help me with this problem. Thanks

A new housing development has lots of packed earth and weeds, but no grass. Two neighbors make a wager on who will be the first to have a lush lawn. Mr. Furious knows that a lawn will not grow without grass seed, so he immediately buys the most expensive seed he can find because everyone knows that quality improves with price. Besides, he will recover the cost of the seed through his wager. Next, he stands knee deep in his weeds and tosses the seed around his yard. Confident that he has a headstart on his neighbor, who is not making much visible progress, he begins his next project. Ms. Slo N. Steady, having grown up in the country, proceeds to clear the lot, till the soil, and even alter the slope of the terrain to provide better drainage. She checks the soil’s pH, applies weed killer and fertilizer, and then distributes the grass seed evenly with a spreader. She applies a mulch cover and waters the lawn appropriately. She finishes several days after her neighbor, who asks if she…

Annie tells her granddaughter, Mary, that in 1934 you could buy a house for $ 17,000 and a jacket for $ 6 . Mary says that in 2018 such a house costs $ 275,000 and such a jacket costs $ 60 . The CPI in 1934 was 15.2 , and in 2018 , it was 245.4 .   Which house has the lower real price? Which jacket has the lower real price? The house with the lower price is the _______, and the jacket with the lower price is the _______. A. $275,000 house in 2018; $6 jacket in 1934 B. $17,000 house in 1934; $60 jacket in 2018 C. $275,000 house in 2018; $60 jacket in 2018 D. $17,000 house in 1934; $6 jacket in 1934

Ben and Sons Co Ltd, a machine intensive manufacturing company situated in the Northen province of Zambia intends to introduce a high technology product in response to the market dynamics. Major proportion of the product’s cost will depend on the decisions made early in its lifecycle. The product will face competition from four major brands already on the market. The Managing Director, Mr William Mwape, has just attended a seminar organized by CA Zambia which covered modern management accounting techniques such as lifecycle costing, JIT system, backflush and throughput accounting etc. He now wishes to implement the knowledge acquired in order to maximize return over the product’s lifecycle. Required:  (a) Explain four (4) ways Ben and Sons Co Ltd can maximize the return over its product’s life cycle.

A used car salesman has the following typical strategy for selling cars.His car is really worth £5000. But he starts his negotiations with a buyer byasking for a starting price of £6000. He then negotiates the price down to £5750at which point the buyer is happy to buy the car. What heuristic is the salesmanexploiting?

An annuity pays $25,000 semiannually (every 6 months) for 12 years. An alternative investment’s APR is 10% with quarterly compounding. What is the value of this annuity?

We need to choose best among the three available investment alternatives high-risk stock, low-risk stock and savings account. Fixed payoff o: 500€ for savings account for the deposited amount. 200€ fixed fee needs to be paid towards trading charges. Payoffs details depends on market conditions as mentioned below. Which investment option you will choose and why? If you need any more details to solve this problem, please make your assumptions and list all the assumptions that you made. Market Up Market Same Market Down High Risk 1700 300 -800 Low Risk 1200 400 100 Probability 0.5 0.3 0.2

Can you explain to me why my teacher said that the answer in here can't be determined? Or was she wrong? Please accompany the explanation with a solution so I could understand better. Thank you.  If the sales this year amounted to P500,000, sales this year at last year's prices is P460,000, the cost of sales this year is P300,000, and the cost of sales this year at last year's price is P260,000. How much is the gross profit variation due to sales price factor?

Damen Ship Repair has just introduced a new service. For a fixed annual fee, Damen will predict what are the most likely repair parts you will need for each of your cargo ships over the next year. It will then preposition those parts either on your ships or at Damen’s shipyards depending on whether your crew can install that part or it must be done at a shipyard. Then all you pay for is the installation labor you actually use each year, which also comes at a discounted rate. a) Specify the key features and benefits that they would want to inform customers about b) Develop an integrated marketing communication plan for marketing the service

If the contract annual interest rate on a $2,880,000 fixed rate loan that is fully amortizing over 20 years with equal monthly payments is 6.25%, what is the effective yield to the lender if the lender charges 1.5% as an origination fee, $288 for a credit report and $3,080 for an appraisal fee and the loan is repaid after ten years? a. 6.25% b. 6.51% c. 6.46% d. 6.49%

Suppose that a firm has the option to make or buy a part. Its annual requirement is 11,000 units. A supplier is able to supply the part at $6 per unit. The firm estimates that it costs $800 to prepare the contract with the supplier. To make the part, the firm must invest $29,000 in equipment, and the firm estimates that it costs $3 per unit to make the part.   COSTS MAKE OPTION BUY OPTION Fixed Cost $29,000 $800         Variable Cost $3 $6         Annual Requirement = 11,000 units 1. What is the break-even point? Round your answer to the nearest whole number. 2. What is the total cost at the break-even point? Round your answer to the nearest dollar. 3. What is the total cost for the make option? Round your answer to the nearest dollar.

What would it cost an insurance company to replace a family’s personal property that originally cost $113,000? The replacement costs for the items have increased by 12 percent.

What is the APR on a $700,000 fixed rate mortgage loan fully amortizing over 30 years if the stated annual interest rate is 5.5% and the lender charges 1.5% as an origination fee, $750 for an appraisal and $18 for a credit report? a.5.65% b.5.72% c.5.36% d. 5.5%

A 75% leased apartment building that you recently acquired in Las Vegas, Nevada had an estimated annual NOI of $180,000. After you complete some needed renovations and improvements, you believe you can increase the occupancy to 95% while achieving higher rents and reduced operating costs, and you believe the renovated building will sell at a lower cap rate. If you can increase the NOI by 50% and reduce the sale cap rate by 25%, you will increase the sale price of the property by: a. 75% b. 25% c. 50% d. 100%

Carl’s house payment is $1,100 per month and his car payment is $466 per month. If Carl's take-home pay is $2,950 per month, what percentage does Carl spend on his home and car?   Loan payments-to-income ratio