He has offered to pay you back $12,000 in a year. If the cost of capital of this investment opportunity is 10%, what is its NPV? Should you undertake the investment opportunity? Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. 8.
A dollar today is worth more than a dollar to be received in the future because-the dollar can be invested today and earn interes If you were to put $1,000 in the bank at 6% interest each year for the next 10 years, which table would you use to find the ending balance in your account? - compound sum of an annuity of $1 The FVIFA for the future value of an annuity is 4.5 at 10% for 4 years. If we wish to accumulate $8,000 by the end of 4 years, how much should the annual payments be?-. $1,778 Under what conditions must a distinction be made between money to be received today andmoney to be received in the future?- when idle money can earn a positive return An annuity may be defined as-a series of consecutive payments of equal An annuity may be defined as-a series of consecutive payments of equal amounts. You are to receive $12,000 at the end of 5 years.
Diluted earnings per share of $1.60 to $1.72 were expected for the fiscal year ending February 3, 2012. Our guidance assumed approximately $2.4 billion in share repurchases during 2011 spread evenly across the four
The total amount is $1,517,391 |13. Tuttle Buildings Inc. has decided to go public by selling $6,000,000 of new common stock. Its | |investment bankers agreed to take a smaller fee now (6% of gross proceeds versus their normal 10%) in exchange for a 1 year option to | |purchase an additional 250,000 shares at $7.00 per share. The | |Investment bankers expect to exercise the option and purchase the 250,000 shares in exactly one year, when the stock price is forecasted to| |be $6.50 per share. However, there is a chance that the stock | |price will actually be $12.00 per share one year from now.
On July 1, 2012, Herzog Mining lends cash and accepts a $9,000 note receivable that offers 10% interest and is due in nine months. Herzog reported its financial statements at the end of fiscal year on December 31, 2012 (An adjusting entry for interest revenue was recorded). How would Herzog record the transaction on April 1, 2013, when the borrower pays Herzog the correct amount owed? A. B. C. D. 2 4.
A family spends $28,000 a year for living expenses. If prices increase by 4 percent a year for the next three years, what amount will the family need for its living expenses? Answer: PV (1 + i)^n or, PV (1 + .04)^3 or, $28,000 * 1.125 = $31,500 needed for the family’s annual living expenses. 5. What would be the yearly earnings for a person with $6,000 in savings at an annual interest rate of 5.5 percent?
4. Norton Co., a U.S. corporation, sold inventory on December 1, 2011, with payment of 10,000 British pounds to be received in sixty days. The pertinent exchange rates were as follows: What amount of foreign exchange gain or loss should be recorded on January 30? A. $1,516 gain.
If a project with normal cash flows has an IRR greater than the WACC, the project must also have a positive NPV. 3. The Ackert Company's last dividend was $1.55. The dividend growth rate is expected to be constant at 1.5% for 2 years, after which dividends are expected to grow at a rate of 8.0% forever. The firm's required return (rs) is 12.0%.
The compensation expense for 2011 will be (Round off turnover calculations to three decimal places and answer to the nearest dollar.) ** $77,468 | $80,022 | $82,575 | $160,043 | 4. On January 1, 2010, Wilson Corporation granted Emelia Walker, its president, a compensatory stock option plan to purchase 8,000 shares of Wilson's $10 par common stock. The option price is $25 per share and the option has a fair value of $7 per option, which is exercisable on January 1, 2014, after four years of service. How much compensation expense should Wilson recognize on December 31, 2010?
Part (b) Calculate the seasonal forecast of sales for February of Year 3. Part (c) Which forecast do you think is most accurate and why? 11. Question : (TCO 6) Davis Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project A Project B Initial Investment $800,000 $650,000 Annual Net Income $50,000 45,000 Annual Cash Inflow $220,000 $200,000 Salvage Value $0 $0 Estimated Useful Life 5 years 4 years The company requires a 10% rate of return on all new investments.