round 17
nelson860
round_17.docx
ROUND 48$
#8Homework #4D (YTM annually, semi-annually)
A few years ago, Spider Web, Inc. issued bonds with a 11.18 percent annual coupon rate, paid semiannually. The bonds have a par value of $1,000, a current price of $886, and will mature in 16 years. What would the annual yield to maturity be on the bond if you purchased the bond today?
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
You should use Excel or financial calculator.
Your Answer:
#1 Homework #5E (HPR, Annualized holding period return, Effective annual rate on investment)
Mary purchased 100 shares of Sweet Pea Co. stock at a price of $44.14 six months ago. She sold all stocks today for $42.00. During that period the stock paid dividends of $1.87 per share. What is Mary’s effective annual rate?
Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box)
Your Answer:
#4 Homework #6C (IRR and MIRR annually and semi-annually)
Tall Trees, Inc. is using the modified internal rate of return (MIRR) when evaluating projects. The company is able to reinvest cash flows received from the project at an annual rate of 11.81 percent. What is the MIRR of a project if the initial costs are $1,666,500 and the project life is estimated as 6 years? The project will produce the same after-tax cash inflows of 502,100 per year at the end of the year.
Round the answer to two decimal places in percentage form. (Write the percentage sign in the "units" box)
Your Answer:
#5Homework #6D (Profitability Index)
A project has an initial outlay of $3,850. It has a single payoff at the end of year 2 of $9,662. What is the profitability index (PI) of the project, if the company’s cost of capital is 8.75 percent?
Round the answer to two decimal places.
Your Answer:
#7Homework #6F (Cost of equity financing)
Nature Food Inc. needs to estimate the cost of financing on preferred stock. The firm has preferred stock outstanding that pays a constant dividend of $4.41 per year. That preferred stock is currently selling for $51.67. However, the underwriter would charge flotation costs of $3.66 per share. What is the form’s cost of preferred stock financing?
Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box)
Your Answer:
#9 Homework #7A (Break-even point, Operating leverage)
The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $85.02. The variable cost per unit is $24.98, Poseidon Swim has average fixed costs per year of $6,557.
Determine the degree of operating leverage for the level of production and sales 353 swim trunks
Your Answer
#10 Homework #7B (Financial leverage)
Use the following information about Rat Race Home Security, Inc. to answer the questions:
Average selling price per unit $348.
Variable cost per unit $191
Units sold 421
Fixed costs $8,427
Interest expense 15,989
Based on the data above, what will be the resulting percentage change in earnings per share of Rat Race Home Security, Inc. if they expect operating profit to change 6.4 percent?
(You should calculate the degree of financial leverage first).
(Write the percentage sign in the "units" box).
Round the answer to two decimals
Your Answer:
#13 Homework #7E (After-Tax cash flow from selling the old asset)
Genetic Insights Co. purchases an asset for $16,994. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, respectively. Genetic Insights has a tax rate of 30%. The asset is sold at the end of six years for $4,630.
Calculate tax paid on gain on disposal. Round the answer to two decimals.
Your Answer:
#14 Homework #8A (Lock-Box system, Cost of Trade Credit)
Aqua System Inc. expects to have $24,286,200 in credit sales during the coming year. Currently all checks are sent to the home office. A proposed lockbox system can eliminate 1 days of float, releasing funds which, when invested, will earn 8.05 percent per year. What annual savings can aqua system expect if the system is implemented? Use a 365-day year.
#15Homework #8B (Carrying Costs and Ordering Costs)
Post Card Depot, an large retailer of post cards, orders 6,212,670 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 13 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.21 per post card per year. The ordering cost is $371 per order.
What is the annual carrying costs of post card inventory (round the answer to two decimal places)?
Your Answer:
#16 Homework #8C (EOQ, Average Inventory)
Cheeseburger and Taco Company purchases 8,751 boxes of cheese each year. It costs $25 to place and ship each order and $4.99 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders.
What is the annual carrying costs of post card inventory.
Round the answer to two decimals.
Your Answer:
Quiz #1
Round the answer to two decimal places (YOU MUST SHOW ALL THE WORK)
