The Lockit Company manufactures door knobs for residential homes and apartments. Lockit is considering the use of simple (single-driver) and multiple regression analyses to forecast annual sales because previous forecasts have been inaccurate. The new sales forecast will be used to initiate the budgeting process and to identify more completely the underlying process that generates sales. Larry Husky, the controller of Lockit, has considered many possible independent variables and equations to predict sales and has narrowed his choices to four equations. Husky used annual observations from 20 prior years to estimate each of the four equations.
2a. What is the shortest loan (36 months, 48 months, 60 months or 72 months) that has a monthly payment within your $500 budget that will allow you to buy the $30,000 car? Answer: Through Bank of America, I found a rate of 2.99% for the 36, 48 and 60 month loans. We are able to put down 20% and will need to finance $24,000. The shortest loan period for the $30,000 car that would be under our $500 limit is the 60 month loan at a rate of $431.13 per month.
You deposit $16,000 per year for 12 years (deposits at the end of each year) in an account that pays an annual interest rate of 14%. What will your account be worth at the end of 12 years? 11. You plan to borrow $389,000 now and repay it in 25 equal annual installments (payments will be made at the end of each year). If the annual interest rate is 14%, how much will your annual payments
Table of Contents Executive Summary and Hypothesis 3 Discussion 4 Conclusions 5 Annotated Bibliography 6 Bibliography 7 Appendix 8 Data Sets 9 Charts & Graphs 5 Table of Descriptive Statistics 11 Confidence Interval 14 Hypothesis Testing 18 Regression Model 19 ABSTRACT/EXECUTIVE SUMMARY This Capstone will research the correlation between particular states, and how the commuting time relates to median income. The data collected will show that states with higher median incomes show commuters with shorter commuter time to their work place. This Capstone will research the correlation between particular states, and how the commuting time relates to median income. The data collected did not show that states with higher
c. After repaying the debt, what will Baruk’s share price be? 81 − 36 = $4.5 / share 10 a. ©2011 Pearson Education, Inc. Publishing as Prentice Hall Berk/DeMarzo • Corporate Finance, Second Edition 203 b. c. 16-3. 36 = 8 million shares 4.5 81 = $4.5 / share 18 When a firm defaults on its debt, debt holders
To evaluate the budget and identify concerns we will use results from years 6 through 8 and compare to year 9. The intent is to identify areas that CBI management will need to review before finalizing. The following budget assumptions are made: * Moderate improvement in the market * No pricing change * Factory overhead $481,798 including $150,000 in depreciation * Year end A/R will be equal to 12% of annual sales based on historical data * AP will be 10% of purchases * Raw materials and work in process inventory not expected to change levels * Selling commissions expected to remain at 3% * Transportation contract $30.00 a unit * Advertising
Using the data in the case, including base case sales projections, develop a spreadsheet model that has two major components; a weekly cash flow statement and a weekly income statement. The model should start on 10/1/2010 and end on 12/31/2014. Use the following assumptions: a. No SWATCH business b. No special promotions c. The minimum “other” product inventory described on p. 5 will be maintained d. Trade accounts payable will not exceed $200,000 during the forecast period e. The revolver loan will be at its maximum value of $530,000 and any additional cash will be supplied by the overdraft mechanism.
Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 154,000 units per year. Price per unit is $41, variable cost per unit is $20, and fixed costs are $865,102 per year. The tax rate is 33 percent, and we require a 14 percent return on this project. Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within (14 percent.
4. If you were opening a savings account with compound interest, would you prefer an account that offers annual compounding, quarterly compounding, or daily compounding? Why? (3-6 sentences. 2.0 points) I would prefer annual compounding because it seems
Firm has only two long term debt, which are specifically the two bonds issued. To find the before tax cost of long term debt, there are two different way which can prove the same results. Let’s start by calculating each of them one by one: 1. A) before tax cost of debt for the first bond = 8.25% x $133 million = $10,972,500 B) After tax cost of debt: i x (1- tax*) = 8.25% x (1- 0.3879) = 0.050498 $133million x 0.050498 = $6,716,234 ―» before tax cost of debt: $6,716,234/ (1- 0.3879) = $10,972,445 or approximately $10,972,500 2. A) Before tax cost for the second bond = 9.375% x $100 million = $9,375,000 B) After tax cost of debt: 9.375% (1- 0.3879*) =0.05738 0.05738 x $100million = $5,738,000 ―» before tax cost of debt = $5,738,000/ (1- 0.3879) = $9,374,300 or approximately