Paige wants to have $40,000 for a down payment on a house five years from now. She can either deposit one lump sum today or wait one year and deposit a lump sum then. Assume an interest rate of 3.5 percent, compounded annually. How much additional money must she deposit if she waits for one year rather than making the deposit today?

Minchey Motor Sport is currently operating at full capacity. Sales are expected to increase by 5 percent next year, which is the firm’s internal rate of growth. Net working capital and operating costs are expected to increase directly with sales. Interest expense will remain constant at its current level. The tax rate and the dividend payout ratio will be held constant. Current and projected net income is positive. Which one of the following statements is correct regarding the pro forma statement for next year?

A firm that opts to “go dark” in response to the Sarbanes-Oxley Act:

You have just leased a car that has monthly payments of $325 for the next 5 years with the first payment due today. If the APR is 5.88 percent compounded monthly, what is the value of the payments today?

All else constant, which one of the following will result in the lowest present value of a lump sum?

Bad Company, Incorporated, has a major outlay of $2.1 million that is needed to renovate the company’s manufacturing facility. Because the company’s management is conservative, it won’t undertake the renovation until it has the cash necessary to fund the renovation. The company plans to deposit $158,000 each quarter into an account that will earn 2.15 percent per quarter. How many years will it be until the company has the money saved for the renovation?

Matsumoto Training has sales of $705,000, depreciation of $17,600, interest expense of $2,090, costs of $144,000, and a tax rate of 21 percent. What is the operating cash flow for the year?

Bourne Freestyle has cost of goods sold of $92,511, interest expense of $4,608, dividends paid of $3,200, depreciation of $14,568, an increase in retained earnings of $11,920, and a tax rate of 21 percent. What is the operating cash flow?

Thom owes $5,600 on his credit card. The credit card carries an APR of 17.6 percent compounded monthly. If Thom makes payments of $185 per month, how long will it take for him to pay off the credit card assuming that he makes no additional charges?

Home Parties is paying an annual dividend of $1.78 every other year. The last dividend was paid last year. The firm will continue this policy until two more dividend payments have been paid. Three years after the last normal dividend payment, the company plans to pay a final liquidating dividend of $32 per share. What is the current market value of this stock if the required return is 14.7 percent?