Please see attached file for complete questions set.

1.W&B Corp. has current liabilities of $460,000, a quick ratio of .83, inventory turnover of 5.9, and a current ratio of 1.5. What is the cost of goods sold for the company? (Do not round intermediate calculations.) 2. Mr. Miser loans money at an annual rate of 17 percent. Interest is compounded daily. What is the actual rate Mr. Miser is charging on his loans? 3. A firm has sales of $1,180, net income of $222, net fixed assets of $536, and current assets of $292. The firm has $97 in inventory. What is the common-size statement value of inventory? 4. Lee Sun's has sales of $4,250, total assets of $3,950, and a profit margin of 6 percent. The firm has a total debt ratio of 42 percent. What is the return on equity? 5. You are scheduled to receive $42,000 in two years. When you receive it, you will invest it for 7 more years at 7.0 percent per year. How much will you have in 9 years? 6. A wealthy benefactor just contributed to your college's scholarship program. This gift will provide $20,000 in scholarships next year with that amount increasing by 2 percent annually thereafter. If the discount rate is 6.5 percent, what is the current value of this perpetual gift? 7. You have just received notification that you have won the $3.5 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you're around to collect), 77 years from now. What is the present value of your windfall if the appropriate discount rate is 11 percent? 8. You're trying to save to buy a new $140,000 Ferrari. You have $31,000 today that can be invested at your bank. The bank pays 5.0 percent annual interest on its accounts. How long will it be before you have enough to buy the car? 9. Winston Enterprises would like to buy some additional land and build a new factory. The anticipated total cost is $139.65 million. The owner of the firm is quite conservative and will only do this when the company has sufficient funds to pay cash for the entire expansion project. Management has decided to save $500,000 a month for this purpose. The firm earns 6 percent compounded monthly on the funds it saves. How long does the company have to wait before expanding its operations? (Do not round intermediate calculations.) 10. You are scheduled to receive annual payments of $9,700 for each of the next 22 years. Your discount rate is 9 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year? 11. Jupiter Explorers has $5,800 in sales. The profit margin is 4 percent. There are 5,000 shares of stock outstanding. The market price per share is $1.70. What is the price-earnings ratio? 12. What is the present value of $1,400 a year at a discount rate of 8 percent if the first payment is received 7 years from now and you receive a total of 23 annual payments? 13. Your parents are giving you $310 a month for 5 years while you are in college. At a 8 percent discount rate, what are these payments worth to you when you first start college? 14. Bayside, Inc. 2010 Income Statement ($ in thousands) Net sales $ 7,520 Less: Cost of goods sold 4,690 Less: Depreciation 400 Earnings before interest and taxes $ 2,430 Less: Interest paid 48 Taxable Income $ 2,382 Less: Taxes 834 Net income $ 1,548 Bayside, Inc. 2009 and 2010 Balance Sheets ($ in thousands) 2009 2010 2009 2010 $ Cash $ 155 $ 260 Accounts payable $ 2,200 1,765 Accounts rec. 1,170 1,010 Long-term debt 900 700 $ Inventory 1,860 2,160 Common stock $ 3,170 3,420 Total $ $ Retained 970 1,220 Net fixed assets Total assets 3,185 3,430 earnings 3,870 3,860 $ $ Total liab. & 7,055 7,290 equity $ 7,055 $ 7,290 What is the equity multiplier for 2010? 15. MBM estimates its expansion cost at $18.63 million and wants it fully funded upfront. Management has decided to save $1.1 million a quarter for this purpose. The firm earns 6.25 percent, compounded quarterly, on its savings. How long does the firm have to wait before expanding its operations? 16. Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, a sculpture was sold at auction for a price of $10,301,500. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12,382,500. What was his annual rate of return on this sculpture? 17. You expect to receive $13,000 at graduation in two years. You plan on investing it at 9 percent until you have $102,000. How long will you wait from now? (Do not round your intermediate calculations.) 18. Ansawry Company Balance Sheets For the Year Ending December 31, 2004 and 2005 (dollars in thousands) 2004 2005 Cash Accounts receivable Inventories Total current assets Net fixed assets Total assets 1,800 3,000 7,200 12,000 65,000 77,000 900 2,000 9,000 11,900 75,100 87,000 Notes payable Accounts payable Accrued expenses Total current liabilities Long-term debt Common stock ($0.20 par value) Retained earnings Total liability & equity 300 3,200 500 4,000 39,300 13,700 20,000 77,000 900 4,600 300 5,800 44,000 11,700 25,500 87,000 Additional Data from 2005 Income Statement (in thousands): Depreciation $ 6,200 Net income $ 15,000 What is the Net cash flow (NCF) from operating activities for 2005? 19. You need a 30-year, fixed-rate mortgage to buy a new home for $225,000. Your bank will lend you the money at an APR of 5.5 percent with monthly compounding. You can only afford monthly payments of $1,000 for principal and interest, so you offer to pay off any remaining loan balance at the end of the loan term in the form of a single balloon payment. What will be the amount of the balloon payment? 20. You are given the following information for Dawn Corp.: Decrease in inventory $ 450 Decrease in accounts payable 175 Increase in notes payable 160 Increase in accounts receivable 190 Did cash go up or down? By how much? Cash (Click to select)decreased or increased by $ . Classify each event as a source or use of cash. A decrease in inventory is a A decrease in accounts payable is a An increase in notes payable is a An increase in accounts receivable is a Source or use of cash Source or use of cash Source or use of cash Source or use of cash 21.Metroplex Corporation will pay a $2.70 per share dividend next year. The company pledges to increase its dividend by 4.40 percent per year indefinitely. Required: If you require an 7.30 percent return on your investment, how much will you pay for the company's stock today? 22.Hardy Lumber has a capital structure which includes bonds, preferred stock, and common stock. Which of the following rights have most likely been granted to the preferred shareholders? I. right to share in company profits prior to other shareholders II. right to elect the corporate directors III. right to vote on proposed mergers IV. right to all residual income after the common dividends have been paid 23.An investment offers a 10.5 percent total return over the coming year. Bill Bernanke thinks the total real return on this investment will be only 3.5 percent. What does Bill believe the inflation rate will be over the next year? 24.Marcel Co. is growing quickly. Dividends are expected to grow at a 19 percent rate for the next 3 years, with the growth rate falling off to a constant 4 percent thereafter. Required: If the required return is 8 percent and the company just paid a $1.80 dividend. what is the current share price? (Do not round your intermediate calculations.) 25.Metallica Bearings, Inc., is a young startup company. No dividends will be paid on the stock over the next 10 years because the firm needs to plow back its earnings to fuel growth. The company will pay a $10 per share dividend in 11 years and will increase the dividend by 6 percent per year thereafter. Required: If the required return on this stock is 13 percent, what is the current share price? (Do not round your intermediate calculations.) 26.The Lo Sun Corporation offers a 6.2 percent bond with a current market price of $774.50. The yield to maturity is 8.46 percent. The face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures? 27.Antiques R Us is a mature manufacturing firm. The company just paid a $13 dividend, but management expects to reduce the payout by 11 percent per year indefinitely. Required : If you require an 18 percent return on this stock, what will you pay for a share today? 28.Green Roof Inns is preparing a bond offering with a 6 percent, semiannual coupon and a face value of $1,000. The bonds will be repaid in 10 years and will be sold at par. Given this, which one of the following statements is correct? 29.Which one of the following is a type of equity security that has a fixed dividend and a priority status over other equity securities? 30.Ashes Divide Corporation has bonds on the market with 11 years to maturity, a YTM of 8.6 percent, and a current price of $1,246.50. The bonds make semiannual payments. What must the coupon rate be on these bonds? (Do not round your intermediate calculations.) 31.Ngata Corp. issued 19year bonds 2 years ago at a coupon rate of 9.4 percent. The bonds make semiannual payments. If these bonds currently sell for 102 percent of par value, what is the YTM? 32.A bond that can be paid off early at the issuer's discretion is referred to as being which one of the following? senior zero coupon collateralized callable unsecured 33.Apocalyptica Corp. pays a constant $13 dividend on its stock. The company will maintain this dividend for the next 8 years and will then cease paying dividends forever. Required: If the required return on this stock is 14 percent, what is the current share price? 34.An increase in which of the following will increase the current value of a stock according to the dividend growth model? I. dividend amount II. number of future dividends, provided the current number is less than infinite III. discount rate IV. dividend growth rate 35.Summer Tyme, Inc., is considering a new 3year expansion project that requires an initial fixed asset investment of $1.89 million. The fixed asset will be depreciated straightline to zero over its 3year tax life, after which time it will have a market value of $147,000. The project requires an initial investment in net working capital of $210,000. The project is estimated to generate $1,680,000 in annual sales, with costs of $672,000. The tax rate is 32 percent and the required return on the project is 15 percent. Required: (a) What is the project's year 0 net cash flow? (b) What is the project's year 1 net cash flow? (c) What is the project's year 2 net cash flow? (d) What is the project's year 3 net cash flow? (e) What is the NPV? 36.The expected return on HiLo stock is 14.50 percent while the expected return on the market is 13.2 percent. The beta of HiLo is 1.15. What is the risk-free rate of return? 37.If a firm accepts Project A it will not be feasible to also accept Project B because both projects would require the simultaneous and exclusive use of the same piece of machinery. These projects are considered to be: a.independent. b.operationally distinct. c.economically scaled. d.mutually exclusive. e.interdependent. 38.Which one of the following is an example of unsystematic risk? a.a national sales tax is adopted b.inflation decreases at the national level c.an increased feeling of prosperity is felt around the globe d.consumer spending on entertainment decreased nationally e.income taxes are increased across the board 39.Winnebagel Corp. currently sells 25,800 motor homes per year at $38,700 each, and 10,320 luxury motor coaches per year at $73,100 each. The company wants to introduce a new portable camper to fill out its product line; it hopes to sell 16,340 of these campers per year at $10,320 each. An independent consultant has determined that if Winnebagel introduces the new campers, it should boost the sales of its existing motor homes by 3,870 units per year, and reduce the sales of its motor coaches by 774 units per year. Required : What is the amount to use as the annual sales figure when evaluating this project? 40.Summer Tyme, Inc., is considering a new 3year expansion project that requires an initial fixed asset investment of $5.076 million. The fixed asset will be depreciated straightline to zero over its 3year tax life, after which time it will be worthless. The project is estimated to generate $4,512,000 in annual sales, with costs of $1,804,800. Required: If the tax rate is 35 percent, what is the OCF for this project? 41.A 5year project has an initial fixed asset investment of $21,000, an initial NWC investment of $2,000, and an annual OCF of $32,000. The fixed asset is fully depreciated over the life of the project and has no salvage value. Required: If the required return is 20 percent, what is the project's equivalent annual cost, or EAC? (Do not round your intermediate calculations.) 42.The riskfree rate of return is 3.6 percent and the market risk premium is 11 percent. What is the expected rate of return on a stock with a beta of 1.5? 43.The primary purpose of portfolio diversification is to: a.eliminate assetspecific risk. b.lower both returns and risks. c.eliminate all risks. d.increase returns and risks. e.eliminate systematic risk. 44.A project that provides annual cash flows of $11,800 for 6 years costs $44,657 today. Required: (a) If the required return is 19 percent, what is the NPV for this project? (b) Determine the IRR for this project. 45.Your portfolio is comprised of 40 percent of stock X, 15 percent of stock Y, and 45 percent of stock Z. Stock X has a beta of 1.16, stock Y has a beta of 1.47, and stock Z has a beta of 0.42. What is the beta of your portfolio? 46.A firm evaluates all of its projects by applying the IRR rule. Year 0 1 2 3 Cash Flow -$33,830 23,000 16,000 10,000 Requirement 1: Determine the IRR for the above project. Requirement 2: If the required return is 21 percent, should the firm accept the above project? 47.A project is expected to create operating cash flows of $24,000 a year for three years. The initial cost of the fixed assets is $50,000. These assets will be worthless at the end of the project. An additional $2,500 of net working capital will be required throughout the life of the project. What is the project's net present value if the required rate of return is 10 percent? 48.Marshall's & Co. purchased a corner lot in Eglon City five years ago at a cost of $580,000. The lot was recently appraised at $632,000. At the time of the purchase, the company spent $45,000 to grade the lot and another $4,600 to build a small building on the lot to house a parking lot attendant who has overseen the use of the lot for daily commuter parking. The company now wants to build a new retail store on the site. The building cost is estimated at $1,250,000. What amount should be used as the initial cash flow for this building project? 49.Which one of the following will decrease the net present value of a project? a.increasing the value of each of the project's discounted cash inflows b.decreasing the required discount rate c.moving each of the cash inflows forward to a sooner time period d.increasing the project's initial cost at time zero e.increasing the amount of the final cash inflow 50.What is the profitability index for an investment with the following cash flows given a 6 percent required return? Year Cash Flow 0 -$21,000 1 7,700 2 10,000 3 9,400 51.What is the payback period for the following set of cash flows? Year Cash Flow 0 $ 3,600 1 2,900 2 1,400 3 1,700 4 1,500 52.G & L Plastic Molders spent $1,200 last week repairing a machine. This week the company is trying to decide if the machine could be better utilized if they assigned it a proposed project. When analyzing the proposed project, the $1,200 should be treated as which type of cost? 53.Jasper Metals is considering installing a new molding machine which is expected to produce operating cash flows of $73,000 a year for 7 years. At the beginning of the project, inventory will decrease by $16,000, accounts receivables will increase by $21,000, and accounts payable will increase by $15,000. All net working capital will be recovered at the end of the project. The initial cost of the molding machine is $249,000. The equipment will be depreciated straightline to a zero book value over the life of the project. The equipment will be salvaged at the end of the project creating a $48,000 aftertax cash flow. At the end of the project, net working capital will return to its normal level. What is the net present value of this project given a required return of 14.5 percent? 54.A stock had returns of 9 percent, -8 percent, 6 percent, and 11 percent over the past 4 years. What is the standard deviation of this stock for the past four years? 55.You recently purchased a stock that is expected to earn 22 percent in a booming economy, 11 percent in a normal economy, and lose 4 percent in a recessionary economy. There is a 24 percent probability of a boom, a 67 percent chance of a normal economy, and a 9 percent chance of a recession. What is your expected rate of return on this stock? 56.Samuelson Electronics has a required payback period of three years for all of its projects. Currently, the firm is analyzing two independent projects. Project A has an expected payback period of 2.8 years and a net present value of $6,800. Project B has an expected payback period of 3.1 years with a net present value of $28,400. Which projects should be accepted based on the payback decision rule? 57.Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 7 years ago for $6 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $9.8 million. The company wants to build its new manufacturing plant on this land; the plant will cost $13.2 million to build, and the site requires $784,000 worth of grading before it is suitable for construction. Required : What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project? 58.Marie's Fashions is considering a project that will require $28,000 in net working capital and $87,000 in fixed assets. The project is expected to produce annual sales of $75,000 with associated cash costs of $57,000. The project has a 5year life. The company uses straightline depreciation to a zero book value over the life of the project. The tax rate is 30 percent. What is the operating cash flow for this project? 59.Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $1,890,000 and will last for 6 years. Variable costs are 39 percent of sales, and fixed costs are $159,000 per year. Machine B costs $4,230,000 and will last for 9 years. Variable costs for this machine are 27 percent of sales and fixed costs are $119,000 per year. The sales for each machine will be $8.46 million per year. The required return is 10 percent and the tax rate is 35 percent. Both machines will be depreciated on a straightline basis. Required: (a) If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine A? (Do not round your intermediate calculations.) (b) If the company plans to replace the machine when it wears out on a perpetual basis, what is the EAC for machine B? (Do not round your intermediate calculations.) 60.Using the following returns, calculate the arithmetic average returns, the variances, and the standard deviations for X and Y. Returns Year X Y 1 14 % 2 32 3 21 4 -22 5 23 21 % 42 -7 -21 50 Requirement 1: (a) Calculate the arithmetic average return for X (b) Calculate the arithmetic average return for Y. Requirement 2: (a) Calculate the variance for X. (Do not round intermediate calculations.) (b) Calculate the variance for Y. (Do not round intermediate calculations.) Requirement 3: (a) Calculate the standard deviation for X. (Do not round intermediate calculations.) (b) Calculate the standard deviation for Y. (Do not round intermediate calculations.) 61.Six months ago, you purchased 2,200 shares of ABC stock for $27.49 a share. You have received dividend payments equal to $0.70 a share. Today, you sold all of your shares for $29.48 a share. What is your total dollar return on this investment? 62. One year ago, the Jenkins Family Fun Center deposited $5,000 in an investment account for the purpose of buying new equipment four years from today. Today, they are adding another $6,800 to this account. They plan on making a final deposit of $9,000 to the account next year. How much will be available when they are ready to buy the equipment, assuming they earn a 8 percent rate of return