Assignment

Schulman incorporated is considering investing in a project with the following expected cash flows: -960, 340, 230, 2,810. If Schulman's expected cost of capital is 0.26, what is the expected NPV of the project?

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Question 2 options:

A nice private pay nursing home in Estonia may be contracted for 1,700 Euros per month. US private pay nursing homes cost 4,400 per month. The number of Euros per dollar is 0.9 According to PPP what should a nursing home similar to the one in Estonia cost in the USA in dollars?

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Question 3 options:

You are currently 25 years old and would like to retire at 65. You currently have no debt or savings.  If you start making monthly deposits tomorrow in an index fund of the Wilshire 5000 and assume it will return 7% compounded monthly, how much must you save each month to retire with $1.0 million?

Question 4 options:

You purchase a long call option giving you the right to buy 100 shares of Isher Corporation for a total premium of $3,600.  The strike price on the option is $24 and the final stock price is $94.  What is your profit or loss?

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Question 5 options:

A credit card charges an Annual Percentage Rate (APR) of 0.11 with 12 monthly payments.  What is the Effective Annual Rate (EAR) on the credit card?

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Question 6 options:

Suppose the covariance between the returns of the stock of Poul Inc. and the returns on the Whilshire 5000 is 0.015. If the standard deviation of market returns is 0.014, what is the beta of the stock?

Note: Here the actual numbers rather than percentages are given. So give your answer as an actual number rather than a percentage etc.

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Question 7 options:

A company's cost of debt is 0.04, and its cost of retained earnings is 0.10.  If the company is financed only with debt and equity and it equity fraction is 0.6, what is the company's WACC?

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Question 8 options:

Assume that its trade credit terms are 1/10, net 50 and Mackenzie pays on day 25. Using a 365 day year, what is Mackenzie's Effective Annual Rate (EAR) cost of trade credit? 

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Question 9 options:

Which of the following statements is correct? (More than one answer is possible.) 

Question 10 options:

Heinlein Corporation is financed with 0.3 percent debt and the rest equity.  It has a leveraged beta of 1.6 and is subject to a 0.3 corporate tax rate.  What is Heinlein's unleveraged beta?

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Question 11 options:

Poul Incorporated's actively managed mutual fund generated a rate of return of 0.15 last year.  The U.S. T-Bill rate is 0.05, and Poul's standard deviation is 0.18.  What is the Poul fund's Sharp Ratio?

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Question 12 options:

Anderson Manufacturing has current assets of $470 million, current liabilities of $95, inventory of $10, and cash of $8.  What is Anderson's Quick Ratio?

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Question 13 options:

The economy has been in a recession, but seems to be recovering. Ebeling Inc.'s stock just paid a dividend of $2.8.  The company's dividend is expected to grow at a rate of 0.00 this year, 0.05, next year, and 0.06 for every year after that. If Ebeling has a required rate of return of 0.15, what is the current value of Ebeling's the stock?

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Question 14 options:

If the Present Value of all estimated futures costs of a 2 year new investment project is 970, and the future value of all expected profits is 720, what is the projects MIRR?

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Question 15 options:

McAllister Inc sold a 5 year bond 3 years ago with a $100 coupon at par. If the current interest rate demanded by the market is 0.12, what is the present value of the bond today? The bond has a par value of $1,000. 

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Question 16 options:

Empress Corporation has a capital budget of 130 and and a Net Income of 170. If Empress's target equity fraction is 0.3, what should Empress's dividend be under the residual dividend model?

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Question 17 options:

Vogt Corporation has a Beta of 1.2. The U.S. government T-Bill is expected to yield 0.01, and the S&P 500 is expected to yield 0.08 in the near future. What is Vogt's required rate of return?

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Question 18 options:

Nock Inc. has a Days Inventory Outstanding of 10, an Accounts Receivable $163, an Average Sales per Day of $14, and a Days Payable Outstanding of 3. What is Nock's Cash Conversion Cycle in days? 

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Question 19 options:

Order the following asset classes by average long term rate of return from highest to lowest.

Question 20 options:

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