round 20

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#1HOMEWORK #1A (Financial statements)

Evening Story Corporation has sales of $4,242,060; income tax of $446,923; the selling, general and administrative expenses $262,222; depreciation of $383,401; costs of goods sold of $2,491,370; and interest expense of $158,429. Calculate the amount of the firms gross profit.

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#2Homework #7E (After-Tax cash flow from selling the old asset)

Reversing Rapids Co. purchases an asset for $140,422. This asset qualifies as a five-year recovery asset under MACRS. The five-year expense percentages for years 1, 2, 3, and 4 are 20.00%, 32.00%, 19.20%, and 11.52% respectively. Reversing Rapids has a tax rate of 30%. The asset is sold at the end of year 4 for $14,293.

Calculate book value of an asset. Round the answer to two decimals.

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#3Homework #8C (EOQ, Average Inventory)

Appliance for Less is a local appliance store. It costs this store $27.33 per unit annually for storage, insurance, etc., to hold microwave in their inventory. Sales this year are anticipated to be 589 units. Each order costs $96. The company is using Economic Order Quantity model in placing the orders.

It takes approximately 6 day(s) to receive an order after it has been placed. If the store insists on a 2 day(s) safety stock (assume 365-days a year), what should the inventory level be when a new order is placed?

(Round the answer to the whole number)

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#4 QUIZ

Sonia invested the following amounts in three stocks

Security Investment Beta

Stock A $320,106 2.06

Stock B $418,519 0.76

Stock C $558,408 1.69

Calculate the beta portfolio

Round the answer to two decimal places

(you must show work)

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#5 Homework#5A Value and Expected rate of return on preferred stock)

Golden Rod Corp.s Preferred stock is currently selling for $71.55. The company pays $6.0 annual dividends on this preferred stock. Which rate of return does the investor expect to receive on this stock is purchased today?

Round the answer to two decimals places

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#6 Homework #4G (Bonds Quotes)

assume that today's date is February 15, 2015. Robin Hood Inc. bond is an annual-coupon bond. Par value of the bond is $1,000. How much you will pay for the bond if you purchased the bond today? The answer should be calculated to two decimal places

Company

Price

Coupon Rate

Maturity Date

YTM

Current Yield

Rating

Robin Hood

114.720

5.381

2-15- 2023

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#7 Homework #1C (Operating Cycle and Cash Conversion Cycle ratios)

a) American Bacon Inc. financial statements are presented in the table below.

Based on the information in the table, and using a 365-day year, calculate Average Day’s Cost of Goods Sold.

Round the answers to two decimal places

Balance Sheet December 31, 2010

Cash and marketable securities	$102,000	Accounts payable	$287,000
Accounts receivable	$299,000	Notes payable	$61,200
Inventories	$628,000	Accrued expenses	$51,900
Prepaid expenses	$10,300	*Total current liabilities*	*$400,100*
*Total current assets*	*$1,039,300*	*Long-term debt*	*$415,000*
Gross fixed assets	$1,502,000	Par value and paid-in-capital	$376,000
Less: accumulated depreciation	$312,000	Retained Earnings	$1,038,200
Net fixed assets	$1,190,000	*Common Equity*	*1,414,200*
*Total assets*	*$2,229,300*	*Total liabilities and owner’s equity*	*$2,229,300*

Income statement, Year of 2010

Net sales (all credit)	$6,387,700.00
Less: Cost of goods sold	$4,726,898.00
Selling and administrative expenses	$345,000.00
Depreciation expense	$148,000.00
EBIT	$1,167,802.00
Interest expense	$50,600.00
Earnings before taxes	$1,117,202.00
Income taxes	$446,880.80
Net income	$670,321.20

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Question

#8 Homework #5E (HPR, Annualized holding period return, Effective annual rate on investment)

The prices for the White Swan Corporation for the first quarter of the last year are given below. Find the holding period return (percentage return) for February.

End of the month	Stock price
January	$98.04
February	$105.96
March	$102.18

Round the answers to two decimal places in percentage form. (Write the percentage sign in the "units" box)

Your Answer: