1 Consider the following information for three stocks, Stocks A, B, and C The returns on the three stocks are positively correlated, but they are not perfectly correlated (That is, each of the correlation coefficients is between 0 and 1 ) Stock Expected Return Standard Deviation Beta A 8 44 16 0 8 B 10 16 16 1 2 C 11 45 16 1 5 Fund P has one third of its funds invested in each of the three stocks The risk free rate is 5 , and the market is in equilibrium (That is, required returns equal expected returns ) The data has been collected in the Microsoft Excel Online file below Open the spreadsheet and perform the required analysis to answer the questions below What is the market risk premium (r M r RF ) Round your answer to two decimal places What is the beta of Fund P Do not round intermediate calculations Round your answer to two decimal places What is the required return of Fund P Do not round intermediate calculations Round your answer to two decimal places Would you expect the standard deviation of Fund P to be less than 16 , equal to 16 , or greater than 16 less than 16 greater than 16 equal to 16 2 Consider the following financial data for J White Industries Total assets turnover 1 8 Gross profit margin on sales (Sales Cost of goods sold) Sales 29 Total liabilities to assets ratio 40 Quick ratio 1 10 Days sales outstanding (based on 365 day year) 32 5 days Inventory turnover ratio 7 0 The data has been collected in the Microsoft Excel Online file below Open the spreadsheet and perform the required analysis to answer the questions below Complete the balance sheet and sales information in the table that follows for J White Industries Do not round intermediate calculations Round your answers to the nearest whole dollar Partial Income Statement Information Sales $ Cost of goods sold $ Balance Sheet Cash $ Accounts payable $ Accounts receivable $ Long term debt $50,000 Inventories $ Common stock $ Fixed assets $ Retained earnings $100,000 Total assets $400,000 Total liabilities and equity $ 3 The data for Rhodes Corporation's has been collected in the Microsoft Excel Online file below Open the spreadsheet and perform the required analysis to answer the questions below Open spreadsheet What is the net operating profit after taxes (NOPAT) for 2018 Enter your answer in millions For example, an answer of $1 2 million should be entered as 1 2, not 1,200,000 Do not round intermediate calculations Round your answer to one decimal place $ fill in the blank 2 million What are the amounts of net operating working capital for both years Enter your answers in millions For example, an answer of $1 2 million should be entered as 1 2, not 1,200,000 Do not round intermediate calculations Round your answers to one decimal place 2018 $ fill in the blank 3 million 2017 $ fill in the blank 4 million What are the amounts of total net operating capital for both years Enter your answers in millions For example, an answer of $1 2 million should be entered as 1 2, not 1,200,000 Do not round intermediate calculations Round your answers to one decimal place 2018 $ fill in the blank 5 million 2017 $ fill in the blank 6 million What is the free cash flow for 2018 Enter your answer in millions For example, an answer of $1 2 million should be entered as 1 2, not 1,200,000 Do not round intermediate calculations Round your answer to one decimal place $ fill in the blank 7 million What is the ROIC for 2018 Round your answer to one decimal place fill in the blank 8 How much of the FCF did Rhodes use for each of the following purposes after tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short term investments ( Hint Remember that a net use can be negative ) Enter your answers in millions For example, an answer of $1 2 million should be entered as 1 2, not 1,200,000 Do not round intermediate calculations Round your answers to one decimal place After tax interest payment $ Reduction (increase) in debt $ Payment of dividends $ Repurchase (Issue) stock $ Purchase (Sale) of short term investments $

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1.Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not

1.Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.)

Stock	Expected Return	Standard Deviation	Beta
A	8.44	%	16	%	0.8
B	10.16		16		1.2
C	11.45		16		1.5

Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium. (That is, required returns equal expected returns.) The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

What is the market risk premium (r_M - r_RF)? Round your answer to two decimal places.

What is the beta of Fund P? Do not round intermediate calculations. Round your answer to two decimal places

What is the required return of Fund P? Do not round intermediate calculations. Round your answer to two decimal places.

Would you expect the standard deviation of Fund P to be less than 16%, equal to 16%, or greater than 16%?

less than 16%
greater than 16%
equal to 16%

2.Consider the following financial data for J. White Industries:

Total assets turnover: 1.8 Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 29% Total liabilities-to-assets ratio: 40% Quick ratio: 1.10 Days sales outstanding (based on 365-day year): 32.5 days Inventory turnover ratio: 7.0

The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

Complete the balance sheet and sales information in the table that follows for J. White Industries. Do not round intermediate calculations. Round your answers to the nearest whole dollar.

Partial Income	Statement Information
Sales	$
Cost of goods sold	$

Balance Sheet

Cash	$	Accounts payable	$
Accounts receivable	$	Long-term debt	$50,000
Inventories	$	Common stock	$
Fixed assets	$	Retained earnings	$100,000
Total assets	$400,000	Total liabilities and equity	$

3.The data for Rhodes Corporation's has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below.

Open spreadsheet

What is the net operating profit after taxes (NOPAT) for 2018? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answer to one decimal place.

$ fill in the blank 2 million

What are the amounts of net operating working capital for both years? Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to one decimal place.

2018 $ fill in the blank 3 million

2017 $ fill in the blank 4 million

What are the amounts of total net operating capital for both years? Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to one decimal place.

2018 $ fill in the blank 5 million

2017 $ fill in the blank 6 million

What is the free cash flow for 2018? Enter your answer in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answer to one decimal place.

$ fill in the blank 7 million

What is the ROIC for 2018? Round your answer to one decimal place.

fill in the blank 8 %

How much of the FCF did Rhodes use for each of the following purposes: after-tax interest, net debt repayments, dividends, net stock repurchases, and net purchases of short-term investments? (Hint: Remember that a net use can be negative.) Enter your answers in millions. For example, an answer of $1.2 million should be entered as 1.2, not 1,200,000. Do not round intermediate calculations. Round your answers to one decimal place.