1) The most recent dividend paid by the Acme company was $1.05. Due to the introduction of an exciting new product, analysts expect sales to increase by 15% in each of the next 4 years. At the end of that time, sales growth is expected to settle down to a constant long-term average of 6.5%per year. If investors require an annual return of 9% on Acme's stock, at what price will that stock sell today?

2) Sales in the past two months ( November and December) were $500 and $450, respectively. For January, February, and March, you forecast sales of $285, $600, and $410, respectively. Based on the past years experience, you expect to collect 20% of sales in cash, 50% after 30 days ( i,e..,in the month following the sale), and 30% two months after the sale. In January you expect to receive a tax refund of $120. In February, you plan to sell an obsolete production machine for $85.

Cash outflows for January, February, and March are expected to be $556, $364 and $565, respectively.

The firm's target cash balance is $35. Cash on hand at the beginning of January is $50.

Construct a cash budget for January-March and answer the following four questions;

1. Will the firm need to borrow?
2. When will the first borrowing occur?
3. What will be the maximum total loan ?
4. Will the firm repay the loan( and be out of debt) during the budget period?

Please show full calculation for each answers..

Preferably hand written.