Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset

Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.4 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate $1,980,000 in annual sales, with costs of $675,000. The tax rate is 34 percent and the required return on the project is 18 percent. What is the project’s NPV? (Enter your answer in dollars, not millions of dollars, e.g. 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

NPV $

File name Quad enterprises.xls    File type: xls  PRICE: $8

he Lawn Ranger Landscaping Service

Instructions

Use this workbook to complete the The Lawn Ranger Landscaping Service practice set for ACC121. 

There are 6 tabs that include the general journals, general ledger, worksheet, financial statements and 

post closing trial balance.

Read the introduction on page one of the practice set and follow the instructions on page two. 

The practice set is to be completed individually throughout the course with portions due during weeks three, four and five. 

File name The Lawn Ranger Landscaping Service.xls    File type: xlsx  PRICE: $40

Type of Security Interest Rate 5-Year Treasury Note 5% 5-Year Corporate Bond (High quality) 6%

Type of Security Interest Rate  5-Year Treasury Note 5%  5-Year Corporate Bond (High quality) 6%  5-Year Corporate Bond (Low quality) 8%

Calculate the default risk premium (DRP) on the Corporate bonds. 

SOLUTION PREVIEW

DRP = i - irf

File name Type of Security Interest Rate.xlsx    File type: xlsx  PRICE: $2

If the one-year spot rate is 5% (R1) (APR) and Two-year spot rate is 5.5% (R2) (APR)

If the one-year spot rate is 5% (R1) (APR) and Two-year spot rate is 5.5% (R2) (APR) calculate the one-year rate one-year (Forward rate)(FR1) from today using pure expectations theory.

SOLUTION PREVIEW

FR1 = [(1+Rn)^n/(1+Rn-1)^n-1] - 1

File name If the one-year spot rate is 5%.xlsx    File type: xlsx  PRICE: $2

Suppose the​ risk-free interest rate is 4.0%.

Suppose the​ risk-free interest rate is 4.0%.

a. Having $200 today is equivalent to having what amount in one​ year?

b. Having  $200 in one year is equivalent to having what amount​ today?

c. Which would you​ prefer, $200 today or $200 in one​ year?

Does your answer depend on when you need the​ money? Why or why​ not?

a. Having $200 today is equivalent to having what amount in one​ year?

Having $200 today is equivalent to having in one year.​(Round to the nearest​ cent.)

$                     

b. Having $200 in one year is equivalent to having what amount​ today?

Having $200 in one year is equivalent to having today. ​(Round to the nearest​ cent.)

​$

c. Which would you​ prefer,  $200  today or $200 in one year?​(Select the best choice​ below.)

A.     $ 200 today

B.     $200 in one year

Does your answer depend on when you need the​ money? Why or why not?​(Select the best choice​ below.)

A. ​No, because if you​ didn't need it then the $200 can be invested and you could have more than $200 in one year.

B. ​Yes, because if you did need the money today it is more valuable than $200.

C. ​Yes, because if you​ didn't need​ it, it's not worth $200.

D. ​No, because if you did need it you could borrow the $200.

Click to select your answer(s).

TUTORIAL PREVIEW

Rate =	4%
Nper =	1

File name:  suppose the risk free rate.xlsx      File type: docx  PRICE: $4

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