You own a house that you rent for $1,275 per month. The maintenance expenses on the house average $235 per month. The house cost $226,000 when you purchased it 4 years ago. A recent appraisal on the house valued it at $248,000. If you sell the house you will incur $19,840 in real estate fees. The annual property taxes are $2,850. You are deciding whether to sell the house or convert it for your own use as a professional office. What value should you place on this house when analyzing the option of using it as a professional office?

You are considering two mutually exclusive projects. Project A has cash flows of −$125,000, $51,400, $52,900, and $63,300 for Years 0 to 3, respectively. Project B has cash flows of −$85,000, $23,100, $28,200, and $69,800 for Years 0 to 3, respectively. Project A has a required return of 9 percent while Project B’s required return is 11 percent. Should you accept or reject these mutually exclusive projects based on IRR analysis?

What is the expected return on this portfolio? Stock Expected Return Number of Shares Price per Share A −.02 1,400 $15.57 B .11 2,800 $57.08 C .05 3,600 $27.75

Keedis Products has projected the following sales for the coming year: Q1 Q2 Q3 Q4 Sales $ 17,750 $ 14,450 $ 15,275 $ 15,975 The company places orders each quarter that are 30 percent of the followingquarter’s sales and has a 60-day payables period. What is the payment of accounts for the second quarter?

Dillingham, Incorporated, has a 60-day collection period. The projected sales for each quarter next year are shown below. What are collections for the third quarter? Q1 Q2 Q3 Q4 Sales $ 3,680 $ 4,260 $ 4,685 $ 5,160

Underground Funeral Services has annual sales of $885,500. The cost of goods sold is equal to 90 percent of sales. The firm has an average accounts receivable balance of $87,600 and an average accounts payable balance of $72,900. How many days, on average, does it take the firm to pay its suppliers?

SheltonCompany purchased a parcel of land six years ago for $855,500. At that time, the firm invested $127,000 in grading the site so that it would be usable. Since the firm wasn’t ready to use the site itself at that time, it decided to lease the land for $45,000 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $907,000. What value should be included in the initial cost of the warehouse project for the use of this land?

The Lumber Yard has projected the sales below for the next four months. The company collects 39 percent of its sales in the month of sale, 42 percent in the month following the month of sale, 18 percent two months after the month of sale, and never collects 1 percent of its sales. How much will the company collect in April? January February March April Sales $ 137,600 $ 144,150 $ 151,975 $ 165,700

Your portfolio is invested 25 percent each in Stocks A and C, and 50 percent in Stock B. What is the standard deviation of your portfolio given the following information? State of Economy Probability of State of Economy Rate of Return if State Occurs Stock A Stock B Stock C Boom .07 .28 .14 .11 Good .55 .19 .12 .09 Poor .36 −.21 .07 .06 Bust .02 −.65 .03 −.03

JoAnn Manufacturing has projected the following sales for the coming year: Q1 Q2 Q3 Q4 Sales $ 54,600 $ 61,600 $ 69,900 $ 75,550 The company places orders each quarter that are 25 percent of the following quarter’s sales and has a 30-day payables period. What is the payment of accounts for the third quarter?