Those questions are related to Financial Mathematics: Mario's regular pay is $23.00 per hour. The regular workweek

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Those questions are related to Financial Mathematics:

Mario's regular pay is $23.00 per hour. The regular workweek is 40 hours, and overtime is paid at time-and-a-half the regular hourly rate. If Mario worked 46.5 hours last week, what were his gross earnings?

You are buying a pack of milk (priced at 3.49CAD) and paper towels (priced at 6.99CAD) in a grocery store in Ontario. Only paper towels are subject to HST in Ontario. How much would be your total bill at the grocery store?

The CPI was 125.2 for 2014. Determine the purchasing power of the Canadian dollar for the 2014 and interpret the meaning of the result.

Calculate the net price of an item, worth $5,000, after three trade discounts of 20%, 10%, and 5%.

Calculate the amount of interest on $1560 earning 7% p.a., starting on October 1, 2018, for the next 10 months.

On January 15, Sheridan Service received a shipment with an invoice dated January 14, terms 4/10 E.O.M., for $2592. On February 9, Sheridan Service mailed a cheque for $1392 in partial payment of the invoice. By how much did Sheridan Service reduce its debt?

Compute the face value of a 90-day promissory note dated October 22, 2018 that has a maturity value of $76,386.99 and an interest rate of 7.5% p.a.

Scheduled payments of $1010 due five months ago and $1280 due today are to be repaid by a payment of $615 in four months and balance in seven months. If money is worth 7.75% p.a. and the focal date is in seven months, what is the amount of the final payment? (Hint: Set the size of the final payment be $x. Set up an equality of amount which supposed to be payed due today and the repaid amount.)

An Italian company is considering expanding the sales of its cappuccino machines to the U.S. market. As a result, the idea of setting up a manufacturing facility in the U.S. should be explored. The company estimates the initial demand in the U.S. will bring in an annual operating profit of $2,500,000, which is expected to keep track with the U.S. price level. The new facility will free up the amount currently exported to the U.S. market. The company presently realizes an annual operating profit of ?1,000,000 on its U.S. export.

The manufacturing facility is expected to cost $24 million. The company plans to finance the project with a combination of debt and equity capital. The new project will increase the company's borrowing capacity by ?10 million, and the company plans to borrow only that amount. The city in which the facility will be built has promised to provide a 5-year interest only loan of $7.5 million at 6% per annum (note: principal will be paid back in a lump sum at the end of year 5).

The U.S. IRS will allow the company to straight-line depreciate the new facility over 5 years. After that time, the company plans to sell all molding equipment (accounts for 55% of the project's cost). Although it is difficult to estimate the salvage value, the company is confident that the after-tax salvage value will be at least 25% of the original book value.

Corporate tax rates in the U.S. and Italy are the same as 35%. The long-term inflation rate is expected to be 3% in the U.S. and 5% in Italy. The current spot exchange rate is $1.5/?. The Italian company explicitly believes in PPP as the best means to forecast future exchange rates.

The company's U.S. sales affiliate currently holds $1.5 millionreadiesfor repatriation back to Italy. The money was accumulated under a special tax concession rate of 25%. If the fund were repatriated, additional tax will be due.

The company estimates its weighted average cost of capital to be 11%, and the all-equity cost of capital to be 15%. It can borrow dollars at 9% per annum and Euros at 10%.

1)Whaareee the amount and the cost of debt used to finance the U.S. manufacturing facility?

2)Why is the APV model better than the NPV model for capital budgeting analysis?

3)Specify the discount rate you would use for the calculation of the (1) present value of after-tax operating cash flows; (2) PV of depreciation tax shield; (3) PV of terminal cash flows. Explain why.

4)Illustrate how to calculate the PV of after-tax operating cash flows in APV analysis (use the first two years in your illustration).

5)Calculate the PV of interest tax shield from the non-concessionary loan.

6)Calculate the number of funds that will be freed up by the new project.

7)Calculate the subsidy provided by the host city.

8)Assume the preliminary estimate of the 5-year project's APV is -?1,000,000 (negative ?1,000,000). Which does not include the after-tax salvage value of the equipment. Calculate the break-even after-tax salvage value. Do you recommend the project to the Italian company? Explain.

9)Now assume the concessionary loan offered by the host city increases to $20 million. How much of the interest payment should be used to calculate the interest tax shield? Explain.