Finance Answers

Suppose that Calloway golf would like to capitalize on Phil Michelson winning the Open Championship in 2013 by releasing a new putter. The new product will require new equipment for $421,075.00 that will be depreciated using the 5-year MACRS schedule. The project will run for 2 years with the following forecasted numbers:

Year 1 Year 2
Putter price $64.57 $64.57
Units sold 18,834.00 10,381.00
COGS 42.00% of sales 42.00% of sales
Selling and Administrative 21.00% of sales 21.00% of sales

Calloway has a 14.00% cost of capital and a 39.00% tax rate. The firm expects to sell the equipment after 2 years for a NSV of $148,698.00.

What is the project cash flow for year 2? (include the terminal cash flow here)

Answer Format: Currency: Round to: 2 decimal places.

Explain why a firm $1 million in the bank would care about the market interest rate when investing $10 million into a new building, after all they do not need to borrow money. When would they undertake this investment project?

Suppose that a proposal for tax reductions associated with the purchase of capital is up for debate. Suppose too that union leaders are called upon to comment on the proposal from the perspective of how it will affect the welfare of their members as workers (not consumers). Will they all agree on the effects of the proposal? Explain your answer

jules is thinking about opening a jewelry store why would she need seed capital?
a. train the workers
b.purchase equipment
c. develop a business model
d.rent a store

outline the evolution of public finance from the field of economics

How do the different levels of government use tax dollars to provide services for Americans

What is a bicameral congress

Suppose that you spent $200 on clothes and paid with a credit card. Your credit card company's monthly interest rate is 1.6 percent, and you paid $100 of your bill halfway through the month. Figure out the finance charge for the first two methods.
(1)Previous Balance (2) Adjusted Balance

CCA is also listed on the Australian Stock Exchange since 1970.
1. What is the average annual dividend growth rate for CCA between 2013 and 2017?
Hint-use information provided on page 135.
2. Do you think CCA will maintain this recent growth rate forever? Justify your answer
and if you disagree then also suggest a new dividend growth rate range. Hint-start by
reading pages 8-9.
3. Suppose the annual dividend growth rate is 5 percent, which will continue into the
foreseeable future. What is the intrinsic value of CCA’s share at 31st December 2018,
if you require an annual return of 10 percent?
4. What was CCA’s share price on 31st December 2018?
5. Should you invest in CCA’s shares based on 3 and 4 above? Why or why not?

Annual Report as in here https://www.ccamatil.com/-/media/Cca/Corporate/Files/Annual-Reports/2018/Annual-Report-2017.ashx

Tartan Industries currently has total capital equal to $9 million, has zero debt, is in the 40% federal-plus-state tax bracket, has a net income of $2 million, and distributes 40% of its earnings as dividends. Net income is expected to grow at a constant rate of 4% per year, 380,000 shares of stock are outstanding, and the current WACC is 13.70%.

The company is considering a recapitalization where it will issue $2 million in debt and use the proceeds to repurchase stock. Investment bankers have estimated that if the company goes through with the recapitalization, its before-tax cost of debt will be 10% and its cost of equity will rise to 14.5%.
What is the stock's current price per share (before the recapitalization?

Assuming that the company maintains the same payout ratio, what will be its stock price following the recapitalization? Assume that shares are repurchased at the price calculated in part a.