# Math homework help

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**#1 Homework #5E (HPR, Annualized holding period return, Effective annual rate on investment)**

You purchased 300 shares of General Electric stock at a price of $70.62 four years ago. You sold all stocks today for $78.13. During that period the stock paid dividends of $3.32 per share. What is your annualized holding period return (annual percentage rate)?

*Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units” box)*

Your Answer:

**#2 Homework #6A (Payback period and Discounted payback period)**

**Find the Discounted Payback period for the following project. The discount is 7%**

Project X | |

Initial outlay | $17,461 |

Year 1 | $5,689 |

Year 2 | $5,807 |

Year 3 | $5,601 |

Year 4 | $8,912 |

Round the answer to two decimal place

Your Answer

**#3Homework #6B (NPV)**

A project has an initial outlay of $1,509. It has a single payoff at the end of year 9 of $7,718. What is the net present value (NPV) of the project if the company’s cost of capital is 12.87 percent?

*Round the answer to two decimal places.*

Your Answer:

**#4 Homework #6C (IRR and MIRR annually and semi-annually)**

Find the modified internal rate of return (MIRR) for the following series of future cash flows if the company is able to reinvest cash flows received from the project at an annual rate of 9.61 percent.The initial outlay is $377,900.

Year 1: $126,000

Year 2: $192,400

Year 3: $171,400

Year 4: $160,500

Year 5: $198,700

*Round the answer to two decimal places in percentage form. (Write the percentage sign in the “units” box)*

Your Answer:

**#5Homework #6D (Profitability Index)**

Good Morning Food, Inc. is using the profitability index (PI) when evaluating projects. You have to find the PI for the company’s project, assuming the company’s cost of capital is 6.89 percent. The initial outlay for the project is $426,367. The project will produce the following end-of-the-year after-tax cash inflows of

Year 1: $194,200

Year 2: $32,301

Year 3: $487,106

Year 4: $454,071

*Round the answer to two decimal places.*

Your Answer:

**#7Homework #6F (Cost of equity financing)**

Paul Sharp is CFO of Fast Rocket Inc. He tries to determine the cost of equity financing for his company. The stock has a beta of 2.05. Paul estimated that the market return is 8.86%. The current rate for 10-year Treasury Bonds is 4.81%. Calculate cost of common equity financing using CAPM – SML formula.

*Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units” box)*

Your Answer:

**#8Homework #6G (WACC)**

Garden Tools Inc. has bonds, preferred stock, and common stocks outstanding. The number of securities outstanding, the current market price, and the required rate of return for these securities are stated in the table below. The firm’s tax rate is 35%.

Calculate the firm’s WACC adjusted for taxes using the market information in the table.

*Round the answers to two decimal places in percentage form. (Write the percentage sign in the “units” box)*

The Number of Securities Outstanding | Selling price | The Required Rate of Return | |

Bonds | 1,094 | $1,046 | 11.83% |

Preferred Stocks | 5,218 | $98.12 | 16.89% |

Common Stocks | 1,299 | $147.59 | 11.49% |

Your Answer:

**#9 Homework #7A (Break-even point, Operating leverage)**

The Poseidon Swim Company produces swim trunks. The average selling price for one of their swim trunks is $87.62. The variable cost per unit is $26.96, Poseidon Swim has average fixed costs per year of $19,957.

What would be the operating profit or loss associated with the production and sale of 454 swim trunks?

Your answer

**#10 Homework #7B (Financial leverage)**

Use the following information about Rat Race Home Security, Inc. to answer the questions:

Average selling price per unit $331.

Variable cost per unit $193

Units sold 317

Fixed costs $6,921

Interest expense $18,761

Based on the data above, what is the degree of financial leverage of Rat Race Home Security, Inc.?

Your Answer:

**#11Homework #7C (Total (Combined) leverage)**

Haunted Forest, Inc.is selling fog machines.

Use the following information about Haunted Forest, Inc. to answer the following questions.

Average selling price per unit $333.

Variable cost per unit $211

Units sold 310

Fixed costs $15,260

Interest expense $3,875

Based on the data above, what will be the resulting percentage change in earnings per share if they expect units produced and sold to change -3.3 percent?

*(You should calculate the degree of total (combined) leverage first).*

*(Write the percentage sign in the “units” box).*

*Round the answer to two decimals*

Your Answer:

**#13 Homework #7E (After-Tax cash flow from selling the old asset)**

Genetic Insights Co. purchases an asset for $14,604. This asset qualifies as a seven-year recovery asset under MACRS. The seven-year fixed depreciation percentages for years 1, 2, 3, 4, 5, and 6 are 14.29%, 24.49%, 17.49%, 12.49%, 8.93%, and 8.93%, respectively. Genetic Insights has a tax rate of 30%. The asset is sold at the end of six years for $3,790.

Calculate gain or loss on disposal.

Gain should be entered as a positive number. Loss should be entered as a negative number. *Round the answer to two decimals.*

Your Answer:

**#14 Homework #8A (Lock-Box system, Cost of Trade Credit)**

Pet Store Inc. sells on terms of 1/10, net 55. What is the effective annual cost of trade credit under these terms? Use a 365-day year.

Round the answer to two decimal places in percentage form.

Your Answer

**#15Homework #8B (Carrying Costs and Ordering Costs)**

Post Card Depot, an large retailer of post cards, orders 8,161,640 post cards per year from its manufacturer. Post Card Depot plans on ordering post card 24 times over the next year. Post Card Depot receives the same number of post cards each time it orders. The carrying cost is $0.28 per post card per year. The ordering cost is $391 per order.

What is the annual total costs of post card inventory?

(R*ound the answer to two decimal places*).

Your Answer:

**#16 Homework #8C (EOQ, Average Inventory)**

Cheesburger and Taco Company purchases 14,198 boxes of cheese each year. It costs $22 to place and ship each order and $4.38 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders.

How many orders will be placed each year? *Round the answer to the whole number*

Your Answer:

Quiz #1

What is the value of a bond that has a par value of $1000, a coupon rate of 8.26 percent (paid annually), and that the matures in 30 years? Assume a required rate of return on this nbond is 8.65 percent.

Round the answer to two decimal places (YOU MUST SHOW ALL THE WORK)

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