The store where you bought new home furnishings offers you two alternative payment plans. The first plan requires a $4,000 immediate up-front payment. The second plan requires you to make monthly payments of $137.41, payable at the end of each month for 3 years. What nominal annual interest rate is built into the monthly payment plan? Please show your steps and calculate using a BAII calculator.

## Mutually exclusive projects-calculate the payback periodMaxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B 0 –$17,000 –$20,000 1 10,500 11,500 2 7,000 8,000 3 2,600 7,000 a-1. Calculate the payback period for each project. Payback period Project A years Projec.. |

## Contribution margin ratioWinny's Office Furniture has a contribution margin ratio of 16%. If fixed costs are $178,800, how many dollars of revenue must the company generate in order to reach the break-even point? |

## Firm evaluates all of its projects by applying the irr ruleA firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: If the required return is 15 percent, what is the IRR for this project? |

## Present value of investment under period of rising inflationYou are interested in an investment project that costs $10,500 initially. The investment has a 5- year horizon and promises future end-of-year cash inflows of $5,000, $4,000, $2,500, $3,500 and $2,000 respectively. Your current cost of capital is 8% .. |

## What is the present value of the future? amounts(Present value?) What is the present value of the following future? amounts? |

## Annual rate implied from the past and expected values3 year(s) ago, Mack invested 5,060 dollars. In 2 year(s) from today, he expects to have 8,990 dollars. If Mack expects to earn the same annual return after 2 year from today as the annual rate implied from the past and expected values given in the pr.. |

## What is the current stock priceOne year from today, investors anticipate that Groningen Distilleries Inc. stock will pay a dividend of $3.25 per share.- What is the current stock price? |

## Horizontal analysis of income statementPrepare a three-year horizontal analysis of the income statement and balance sheet of your selected company. Discuss the importance and meaning of horizontal analysis |

## What would expected return on the stockAccording to CAPM theory (Capital Asset Pricing Model), if a stock has a beta of 1.5, the expected return on the overall market is 10% and the risk free rate is 3.2%, what would the expected return on the stock be? |

## What is the present value of the dividend stream in dollarsChapman, Inc.'s Mexican subsidiary, V. Gomez Corporation, is expected to pay to Chapman 4 pesos in dividends in 1 year after all foreign and U.S. taxes have been subtracted. The exchange rate in 1 year is expected to be $0.07 per peso. What is the pr.. |

## Issue more shares and use the proceeds to lower its debtSelect the choice below that will make the quick ratio go up: Firm XYZ will issue more shares and use the proceeds to lower its debt. Suppose that this does not change operating income, interest rates, tax rates, or total assets. Which statement is m.. |

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