sanju

 Raneem owns shares in HP Inc. Currently, the market price of the stock is $36.34. Management expects dividends to grow at a constant rate of 6 percent for the foreseeable future. Its last dividend was $3.25. Raneem’s required rate of return for such stocks is 16 percent. She wants to find out whether she should sell his shares or add to her holdings.

1. What is the value of this stock? (1 Mark)

1. Based on your answer above, should Raneem buy additional shares in Honda Inc.? Why or why not? (1 Mark)

The next dividend payment by Halestorm, Inc., will be $ 2.04 per share. The dividends are anticipated to maintain a growth rate of 4.5 percent forever. If the required return is 8%, what is the price of stock now?

(a) What are the current yield on a three-year bond whose face value
is $1000 with a coupon rate of 6% per year and a price of $900?

(1) 6.00% (2)6.67% (3) 10.00% (4) 10.02% (5) 11.11 %

Tharaldson Corporation makes a product with the following standard costs:

The company reported the following results concerning this product in June.

The company applies variable overhead on the basis of direct labor hours. The direct material purchases variance is computed when the materials are purchased .

The materials quantity variance for June is: 

Record the sale of the used machine for $15,000 cash.

Hello I need to calculate the depreciation on these vehicles:

Two vehicles have an estimated useful life of 12 years in the company after which it can be resold for an estimated 10% of its original cost.

Vehicle 1: The average replacement cost of a heavy goods vehicle is presently £120,000

Vehicle 2: The average replacement cost of other vehicle is £24,000 per vehicle.

You are responsible for the cost of depreciation on these vehicles. Depreciation is to be charged at current replacement cost.

Riggs Corp. management is planning to spend $650,000 on a new marketing campaign. They believe that this action will result in additional cash flows of $285,000 over the next three years. If the discount rate is 17.5 percent, what is the NPV on this project? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.)

A Project costs $130,000 and is expected to generate year-end cash inflows of $40, 000, $30,000, $72, 000, $ 91,000 and $ 100,000 in years 1 through 5. The opportunity cost of capital for the company is 15%.

Required:

1. Evaluate the project suitability based on the NPV approach                                                                                                                                                                                                                        
2. Evaluate the project suitability based on the Payback period approach                                                                                                                                           
3. Evaluate the project suitability based on the Profitability Index approach                                                                                                               

Explain how you can use internal rate of return to evaluate a project                      

Trial Balance as at 31 May 2021

Dr.

Cr. 

$

$

Purchases

      145,870

Returns in

          2,350

Returns out

          2,175

Sales

      374,860

Accounts payables

        72,960

Accounts receivables

        84,720

Bank

        54,780

Capital

      110,005

Carriage in

          6,540

Discounts allowed

          2,580

Discounts received

          3,210

Drawings

        45,210

Rent

        39,540

Insurance

        10,270

Furniture and fittings

      165,800

Motor Vehicles

      254,600

Allowance for depreciation - Furniture and fittings

        74,520

Allowance for depreciation - Motor Vehicles

      125,900

Provision for doubtful debts

             940

Opening Inventory

        35,480

Loan

      110,400

Telephone

        14,870

Water rates

        12,360  

      874,970

      874,970

The following items should be taken into consideration:

i)

Closing Inventory at 31 May 2021 was $41,050

ii)

An amount of $1,950 was prepaid for insurance. This has not yet been accounted for.

iii)

A water expense accrual of $850 has not yet been accounted for.      

iv)

Depreciation for the year should be applied at the following rates:

Furniture and fittings

15%

Reducing Balance

Motor Vehicles

20%

Straight Line

a) Prepare the Income Statement for the year ended 31 May 2021

b) Prepare the Balance Sheet as at 31 May 2021

You are evaluating two different dough mixing machines:  
• The Techron I costs $150,000, has a three-year life, and has pretax operating costs of $32,000 per year.  
• The Techron II costs $255,000, has a five-year life, and has pretax operating costs of $19,000 per year.  
For both machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $20,000. If your tax rate is 35% and your discount rate is 12%, which machine do you prefer? Why? 

Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected rate of return required by the market for a portfolio with a beta of 1 is 12%. According to the capital asset pricing model:

1. What is the expected rate of return on the market portfolio?
2. What would be the expected rate of return on a stock with beta = 0?
3. Suppose you consider buying a share of stock at $40. The stock is expected to pay $3 dividends next year and you expect it to sell then for $41. The stock risk has been evaluated at

beta = -0.5. Is the stock overpriced or underpriced?

The Solo Hotel opened for business on May 1, 2014. Here is itstrial balance before adjustment on May 31.

(Prepare a ledger using T-accounts. Enter the trial balanceamounts and post the adjusting entries)

Other data: