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Words 780

Pages 4

Problem Set I Problem Set I

4-20

Juan’s Taco Company has restaurants in five college towns. Juan wants to expand into Austin and College Station and needs a bank loan to do this. Mr. Bryan, the banker, will finance construction if Juan can present an acceptable three-month financial plan for January through March. The following are actual and forecasted sales figures:

Table 1

Actual

November $120,000

December 140,000

Forecast

January $190,000

February 210,000

March 230,000

April $230,000

Of Juan’s sales, 30 percent are for cash and the remaining 70 percent are on credit. Of credit sales, 40 percent are paid in the month after sale and 60 percent are paid in the second month after the sale. Materials cost 20 percent of sales and are paid for in cash. Labor expense is 50 percent of sales and it is paid in the month of sales. Selling and administrative expense is 5 percent of sales and is paid in the month of sale. Overhead expense is $12,000 in cash per month; depreciation expense is $25,000 per month. Taxes of $20,000 and dividends of $16,000 will be paid in March. Cash at the beginning of January is $70,000 and the minimum desired cash balance is $65,000.For January, February, and March, prepare a schedule of monthly cash receipts, monthly cash payments, and a complete monthly cash budget with borrowings and repayments.

Table 2

Cash Receipts Schedule Sales Credit sales (70%) Cash sales (30%) Collections (month after credit sales) 40% Collections (two months after credit sales) 60% Total Cash Receipts

November $120,000 84,000 36,000

December $140,000 98,000 42,000 33,600

January $190,000 133,000 57,000 39,200 50,400

February $210,000 147,000 63,000 53,200 58,800 $146,600

March $230,000 161,000 69,000 58,800 79,800 $175,000

April

$230,000 161,000 69,000 64,400 88,200 $207,600

Table 3

Cash Payments…...

...Text Problem Sets - Week Two Vaughan Thompson FIN/571: Corporate Finance April 22, 2013 Text Problem Sets: FIN/571 - Week Two Chapter Five Question # 4 Define the following terms: bond indenture, par value, principal, maturity, call provision, and sinking fund. Bond indenture. Bond indenture is a legal contract for a publicly traded bond. The structure of this contract outline incentives explicitly by detailing responsibilities, constraints, penalties, and oversight required. For example, contracts may specify interest and principal payment timing and amounts. Par value. Par value denotes face value or designated value of a bond or stock. Par value of a bond is typically $1,000 and the sum investors pay upon issue. It is also the sum received when they redeem the bond matures. Conversely, stock par value is frequently set at $1. In this case, par value is an accounting tool that shows no connection to the stocks’ market value. Principal. The term “principal” refers to a sum of money one borrows or invests. The face amount of a bond - the value printed on a stock or bond, or a debt balance. Principal does not encompass finance charges. Principal also describes an investor represented by a broker who executes trades on that investor’s behalf or an investor who trades for his or her own benefit. Principal also refers to a party affected by an agent’s decisions in a principal-agent relationship. Maturity. Maturity is the end of a bond’s life. In finance, maturity......

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...1. Refer to Problem 1.8 on page 59 of the Hubbard/O’Brien textbook. To answer questions a, b, and c, carefully study the graph and identify the points that are unattainable, efficient, and inefficient. Be sure to explain how you identified the points in each case. To answer question d, note that the graph shows the trade-off between producing capital goods (machines, tools, and factories) and producing consumption goods (food, clothing, and movies); which of these will add to an economy’s ability to produce in the future? a. Point E is currently unattainable because that point is beyond the line meaning that there are not enough resources to reach that point. b. Points B, C, and D are efficient because the points are on the line in the graph. c. Point A is inefficient because that point is below the line meaning all resources are not being used. d. Point D is likely to have the highest growth rate because there are more consumption goods being used at that point. 2. Refer to Problem 3.7 on page 62 of the Hubbard/O’Brien textbook. George represents households while BMW and McDonald’s represent firms. For each transaction, identify whether the transaction takes place in the factor market or the product market. • If the transaction takes place in the factor market, indicate whether households are supplying or demanding factors of production and whether firms are supplying or demanding factors of production. • If...

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...Unit 2 Problem Set 1 Unit 2 Problems 1. By default, Windows 7 standard users are permitted to install Plug and Play devices only if their drivers are digitally signed. 2. The debilitating conditions in which files are stored as clusters scattered all over a disk is called fragmentation 3. The file system included in Windows 7 that is specially designed for use on flash drives is called exFat 4. Technically speaking, you create Partitions on basic disk and volumes on dynamic disks 5. In windows 7, the FAT32 files system is limited to volumes no larger than 32 gigabytes 6. The digital signature of a driver consists of a checksum that is appended to the driver itself before publication. 7. To create a fourth primary partition on a basic disk, you must use the diskpart.exe utility. 8. To extend or shrink a partition on a basic disk, you must be a member of the backup operator or administrators groups 9. The defaults partition style used by Windows 7 on an x86 computer is MBR 10. All digitally signed drivers have undergone WHQL testing. Unit 3 Problems Set1 Unit 3 Problems 1. A software routine, which also acts as a filter that blocks certain types of incoming and outgoing traffic, while enabling other types is called firewall 2. The network tool provides a central access point for all of the network controls and connections on a computer running Windows 7 3. A device that one network to another is called router 4. The most common method for illustrating the......

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...Problem Set 2 International Finance Shrikhande Fall 2006 SUGGESTED SOLUTIONS TO CHAPTER 4 PROBLEMS 1. From base price levels of 100 in 1987, West German and U.S. price levels in 1988 stood at 102 and 106, respectively. If the 1987 $/DM exchange rate was $0.54, what should the exchange rate be in 1988? In fact, the exchange rate in 1988 was DM 1 = $0.56. What might account for the discrepancy? (Price levels were measured using the consumer price index.) Answer. If e1981 is the dollar value of the German mark in 1988, then according to purchasing power parity e1988/.54 = 106/102 or e1988 = $.5612. The discrepancy between the predicted rate of $.5612 and the actual rate of $.56 is insignificant and hence needs no explaining. Historically, however, discrepancies betweenthe PPP rate and the actual rate have frequently occurred. These discrepancies could be due to mismeasurement of the relevant price indices. Estimates based on narrower price indices reflecting only traded goods prices would probably be closer to the mark, so to speak. Alternatively, it could be due to a switch in investors' preferences from dollar to non-dollar assets. 3. In early 1996, the short-term interest rate in France was 3.7%, and forecast French inflation was 1.8%. At the same time, the short-term German interest rate was 2.6% and forecast German inflation was 1.6%. a. Based on these figures, what were the real interest rates in France and Germany? Answer. The French real......

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...costs. 2. Calculate the budgeted cost of trophies and plaques based on department overhead rates, where forming department overhead costs are allocated based on direct labor costs of the forming department , and assembly department overhead costs are allocated based on total direct costs of the assembly department. 3. Calculate the budgeted cost of trophies and plaques if Tarquin allocated overhead costs in each department using activity-based costing. 4. Explain how the disaggregation of information could improve or reduce decision quality. Overhead rate = Total overhead 56,346 0.712113744 Total Direct costs $79,125 Tarquin's Trophies Budgeted Information For the Year Ended November 30, 2011 Forming Department Trophies Plaques Total Direct materials $13,000 $11,250 $24,250 Direct labor 15,600 9,000 24,600 Overhead Costs Setup 12,000 Supervision 10,386 Allocated overhead 20,366 14,420 Assembly Department Trophies Plaques Total Direct materials $2,600 $9,375 $11,975 Direct labor 7,800 10,500 18,300 Overhead Costs Setup 23,000 Supervision 10,960 Allocated overhead 7,406 14,153 Recap of total costs Trophies Plaques Total Direct materials $15,600 $20,625 $36,225 Direct labor 23,400 19,500 $42,900 Overhead Costs 27,772 28,574 $56,346 Total $66,772 $68,699 $135,471......

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...Problem Set II P2-6A A. Earnings per share. | | Earnings per share = Net income/Average No. of outstanding shares | | 2011-$2.00 = 60,000/30,0002012- $2.12=70,000/33,000 | | B. Working capital. | | Working capital = current assets - current liabilities | | 2011- 85,000 = 155,000-70,0002012- 113,000 = 188,000- 75,000 | | C. Current ratio. | | Current ratio = Current assets/Current liability | | 2011 :2.2 =155,000/70,0002012: 2.5 = 188,000/75,000 | | D. Debt to total assets ratio. | | | | Debt to total asset ratio = Total debt/Total assets | | 2011- 23.4% = 160,000/685,0002012- 20.4% = 155,000/760,000 | | E. Free cash flow. | | Free cash flow = Cash from operating activities-Cash used for cap. Exp.-Dividends | 2011- 3,0002012-17,000 | | F.) Based on the ratios calculated, discuss briefly the improvement or lack thereof in | Financial position and operating results from 2011 to 2012 of Sievert Corporation. | | | There was an increase of net income and earnings per share in which showed the growth of the company. The liquidity showed in the working capital and ratio. The solvency improved the debt of total assets ratio and the free cash flow | | | | | P13-2A A. Earnings per share: Earnings per share = Net income/Average No. of outstanding shares $218,000/59,000 = $3.69 No. of outstanding share for 2012 = 290,000/5: 58000 No. of outstanding share for 2011 = 300,000/5: 60000 Average no. of......

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...Lab 2 Table 2-1 | DISK 0 | DISK 1 | DISK TYPE | BASIC | BASIC | TOTAL DISK SIZE | 60 GB | 15 GB | NUMBER AND TYPE OF PARTITION | 1 PRIMARY | 0 | AMOUNT OF UNALLOCATED SPACE | 20 | 15 | Lab 2 Table 2-2 | Disk 0 | Disk1 | Unallocated space left(in gigabytes) | 18.05 | 15 | Unallocated space left(in megabytes) | 18483.2 | 15360 | Exercise 2.2 1. Partition 1 2. Because partition 1 is in FAT32 format 3. There are 19283 MB, or 19 GB of available shrink space. Exercise 2.3 4. Volume Y has less storage space than Volume X. This is due to the amount of space of Volume Y being entered in MB, after having expanded and shrunk Volume X to a size larger than its original size. Also, Volume Y was created in NTFS format, whereas Volume X was created in FAT 32, and then converted to NTFS format. Exercise 2.4 5. A volume cannot be extended once another volume has been created after it. In order to extend the first volume, the volume after it would have to be deleted. 6. The X: drive has a capacity of 2.65 GB. 7. No, it does not reflect this addition. 8. The Alice3 volume is not a partition. It is a mounted volume. Essentially, this means that it is a Folder with its own storage capacity, separate from the rest of the volume in which it is located. 9. Alice3 has a capacity of 1.95 GB. Exercise 2.5 10. They’ve all been converted from Basic to Dynamic. 11. There are now four partitions visible on Disk 0. Unit 2 Problem Set 1......

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...DeVry FIN 515 Week 2 Problem Set IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download http://www.hwspeed.com/DeVry-FIN-515-Week-2-Problem-Set-Latest-5785848944.htm?categoryId=-1 If You Face Any Problem E- Mail Us At JOHNMATE1122@Gmail.Com Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_2_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 4 (pages 132–136): 3. Calculate the future value of $2000 in a. five years at an interest rate of 5% per year; b. ten years at an interest rate of 5% per year; and c. five years at an interest rate of 10% per year. d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)? 4.What is the present value of $10,000 received a. twelve years from today when the interest rate is 4% per year; b. twenty years from today when the interest rate is 8% per year; and c. six years from today when the interest rate is 2% per year? 5.Your brother has offered to give you either $5,000 today or $10,000 in 10 years. If the interest rate is 7% per year, which option is preferable? 6.Consider the following alternatives. i. $100 received in 1 year ii. $200 received in 5 years iii. $300 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate......

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...Week 2 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_2_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 4 (pages 132–136): 3. Calculate the future value of $2000 in a. five years at an interest rate of 5% per year; Answer: FV5 = 2000 ×1.055 = 2552.56 b. ten years at an interest rate of 5% per year; and Answer: FV10 = 2,000× 1.0510= 3257.79 c. five years at an interest rate of 10% per year. Answer: FV5 =2000 × 1.15 = 3221.02 d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)? Answer: In the last 5 years we get interest on the interest earned in the first 5 years as well as interest on the original $2000. 4. What is the present value of $10,000 received a. twelve years from today when the interest rate is 4% per year; Answer: PV=10,0001.0412 = 6245.97 b. twenty years from today when the interest rate is 8% per year; and Answer: PV=10,0001.0820 = 2145.48 c. six years from today when the interest rate is 2% per year? Answer: PV=10,0001.026 = 8879.71 5. Your brother has offered to give you either $5,000 today or $10,000 in 10 years. If the interest rate is 7% per year, which option is preferable? Answer: PV = RECEIVED FUNDS(RATE ^ YEAR) Received funds | Years | Rate | PV | 10,000 | 10 | 1.07 |......

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...FIN 515 Week 2 Problem Set http://www.homeworkwarehouse.com/downloads/fin-515-week-2-problem-set/ FIN 515 Week 2 Problem Set Chapter 4 1. Calculate the future value of $2000 in a. five years at an interest rate of 5% per year; b. ten years at an interest rate of 5% per year; and c. five years at an interest rate of 10% per year. d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)? 2. What is the present value of $10,000 received a. twelve years from today when the interest rate is 4% per year; b. twenty years from today when the interest rate is 8% per year; and c. six years from today when the interest rate is 2% per year? .Your brother has offered to give you either $5,000 today or $10,000 in 10 years. If the interest rate is 7% per year, which option is preferable? 3. Consider the following alternatives. i. $100 received in 1 year ii. $200 received in 5 years iii. $300 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 10% per year. b. What is your ranking if the interest rate is only 5% per year? c. What is your ranking if the interest rate is 20% per year? 4. Your daughter is currently 8 years old. You anticipate that she will be going to college in 10 years. You would like to have $100,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 3% per year, how much money do you......

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...sensitivity of a bond and its time to maturity are positive correlated. (c) To a zero-coupon bond Typically, the negative sign is ignored. This expression implicates that the elasticity of a zero-coupon bond is equal to its time to maturity (t). 2. Duration and elasticities (a) The higher the coupon payments, the ‘heavier’ the left hand side. To get the ‘system on balance’, we have to move the fulcrum to the left. This would lead to a shorter distance and hence a lower duration. And vice versa, the lower the coupon payments, the ‘heavier’ the right hand side. Now, to get the ‘system on balance’, we have to move the fulcrum to the right. This would lead to a longer distance from the origin and hence a higher duration. (b) Based on the preceding formula, the sigh of duration is positive. Modified duration is considered as a direct measure of price sensitivity to interest rate changes. Thus, the relationship of bond prices to interest rates is negative correlation. (C) -108*2.2*0.25%＄-0.594 3. Duration calculations (a) What is the price of the bond? According to the equation , we get the following: t | CF | PV | 0.5 | $25 | $23.95 | 1 | $25 | $22.94 | 1.5 | $25 | $21.97 | 2 | $25 | $21.04 | 2.5 | $25 | $20.15 | 3 | $25 | $19.30 | 3.5 | $25 | $18.49 | 4 | $1,025 | $726.14 | | Price | $873.98 | (b) Calculate and interpret the Macauley Duration for the bond. According to the Macauley Duration’s......

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...FIN 515 Week 2 Problem Set http://www.homeworkwarehouse.com/downloads/fin-515-week-2-problem-set/ FIN 515 Week 2 Problem Set Chapter 4 1. Calculate the future value of $2000 in a. five years at an interest rate of 5% per year; b. ten years at an interest rate of 5% per year; and c. five years at an interest rate of 10% per year. d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)? 2. What is the present value of $10,000 received a. twelve years from today when the interest rate is 4% per year; b. twenty years from today when the interest rate is 8% per year; and c. six years from today when the interest rate is 2% per year? .Your brother has offered to give you either $5,000 today or $10,000 in 10 years. If the interest rate is 7% per year, which option is preferable? 3. Consider the following alternatives. i. $100 received in 1 year ii. $200 received in 5 years iii. $300 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 10% per year. b. What is your ranking if the interest rate is only 5% per year? c. What is your ranking if the interest rate is 20% per year? 4. Your daughter is currently 8 years old. You anticipate that she will be going to college in 10 years. You would like to have $100,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 3% per year, how much money do you......

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...FIN 515 Week 2 Problem Set Answers http://homeworklance.com/downloads/fin-515-week-2-problem-set-answers/ Answer the following questions and solve the following problems in the space provided. When you are done, save the file in the format flastname_Week_2_Problem_Set.docx, where flastname is your first initial and you last name, and submit it to the appropriate dropbox. Chapter 4 (pages 132–136): 3. Calculate the future value of $2000 in a. five years at an interest rate of 5% per year; b. ten years at an interest rate of 5% per year; and c. five years at an interest rate of 10% per year. d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)? 4. What is the present value of $10,000 received a. twelve years from today when the interest rate is 4% per year; b. twenty years from today when the interest rate is 8% per year; and c. six years from today when the interest rate is 2% per year? 5. Your brother has offered to give you either $5,000 today or $10,000 in 10 years. If the interest rate is 7% per year, which option is preferable? 6. Consider the following alternatives. i. $100 received in 1 year ii. $200 received in 5 years iii. $300 received in 10 years a. Rank the alternatives from most valuable to least valuable if the interest rate is 10% per year. b. What is your ranking if the interest rate is only 5% per year? c. What is your ranking if the interest rate is 20% per year? 8. Your......

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...Problem set 2 1) PA=FV(1+y1) 95.24=100(1+y1) Y1=5% PB=c(1+y1) +c+FV(1+y2)2 107.42=10(1+0.05) +10+100(1+y2)2 Y2=6% PC=c(1+y1) +c(1+y2)2+ c+FV(1+y3)3 140.51=20(1+0.05) +20(1+0.06)2+ 20+100(1+y3)3 Y3=5% PD=FV(1+y4)4 85.48=100(1+y4)2 Y4=4% 2) PE=c(1+y1) +c+FV(1+y2)2 FV=100 C=25 PE=25(1+0.05) +25+100(1+0.06)2=135.06 Build a replicating portfolio because arbitrage opportunity only available when selling bonds E and buying a replicating portfolio. So XA CF1A+XB CF1B=CF1c, XA*100+XB*10=25 XA CF2A+XB CF2B=CF2C, XA+0+XB*110=125 XA=0.1364 XB=1.1364 Arbitrage profit is 136-135.06=0.94 In conclusion, the arbitrage profit is $0.94 when building replicating portfolio whih consist of buying 0.1364 bond A and 1.1364 bond B. 3) P=c(1+y1) +c+FV(1+y2)2 105.6=10(1+y1) +10+100(1+y2)2 123.86=20(1+y1) +20+100(1+y2)2 (1+y2)2= 120123.86-20(1+y1) So, 105.6=10(1+y1) +10+100120123.86-20(1+y1) Y1=4.98% 123.86=20(1+0.0498) +20+100(1+y2)2 Y2=7% 4) FV=100 Coupon rate=10% A, if 1 year. CF1=C1+P1 CF1=C1+10+100(1+1Y2)2 Finally, we do not know 1Y2 so that we can’t make sure at what price need to sell the bind. This will lead the customer to liquidity risk. B, if 3 years. Cause is a 2 years bond. CF1=10*(1+1Y3)2+110*(1+2Y3) The investor will face reinvestment risk when they don’t not what rate their......

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...BUS 308 Week 2 Problem Set To Buy This material Click below link http://www.uoptutors.com/BUS-308/BUS-308-Week-2-Problem-Set Problem One Suppose that an automotive parts and accessories chain is experimenting with a new sales promotion. Two similar stores are selected for the experiment. For Store 1, nothing changes. This store constitutes the control group. For Store 2, the treatment group, the promotion is implemented. Sales in hundreds of dollars over a five-day period are as follows: Control: 6, 6, 7, 10, 12, 9, 6, 5, 5, 7 Treatment: 2, 5, 2, 4, 7, 1, 2, 3, 4, 5 The expectation that sales will be higher in the treatment group makes this a one-tailed test; the alternate hypothesis is m1 < m2. Use Excel to determine whether differences between the two groups are statistically significant. Show all of your work and clearly label each of your calculations. Share your calculations and your interpretations of your findings in your Word document. Problem Two Suppose that a home builder is approached by a customer who wants to move in as soon as possible. The customer chooses three home designs that she likes and asks the home builder which one could be completed the fastest. To compare the three designs on speed of completion, the builder randomly selects 10 homes that he built in the past based on each of the three designs. Use the Excel Analysis ToolPak to run an ANOVA test in order to determine which design would be best for the customer. Show all of your work......

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