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28 The December 31, 2018, balance sheet of Whelan, Inc., showed long-term debt of $1,385,000, $137,000 in the common stock account, and $2,620,000 in the additional paid-in surplus account. The December 31, 2019, balance sheet showed long-term debt of $1,550,000, $147,000 in the common stock account, and $2,920,000 in the additional paid-in surplus account. The 2019 income statement showed an interest expense of $92,500 and the company paid out $142,000 in cash dividends during 2019. The firm's net capital spending for 2019 was $930,000, and the firm reduced its net working capital investment by $122,000. What was the firm's cash flow to creditors during 2019? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 1,234,567.) Cash flow to creditors What was the firm's cash flow to stockholders during 2019? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 1,234,567.) Cash flow to stockholders 28 Cash flow to stockholders What was the firm's cash flow from assets during 2019? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 1,234,567.) Cash flow from assets What was the firm's operating cash flow during 2019? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 1,234,567.) Operating cash flow 29 Consider the following information on a portfolio of three stocks: State of Probability of Stock A Stock B Stock C Economy State of Economy Rate of Return Rate of Return Rate of Return Boom .13 .02 .32 .50 Normal .55 .10 .22 .20 Bust .32 .16 -21 -35 a. If your portfolio is invested 40 percent each in A and B and 20 percent in C, what is the portfolio's expected return, the variance, and the standard deviation? (Do not round intermediate calculations. Round your variance answer to 5 decimal places, e.g., 32.16161. Enter your other answers as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the expected T-bill rate is 4.25 percent, what is the expected risk premium on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Expected return Variance Standard deviation b. Expected risk premium % % 31 An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at the child's birth. The details of the policy are as follows: The purchaser (say, the parent) makes the following six payments to the insurance company First birthday $ 830 Second birthday: $ 830 Third birthday $ 930 Fourth birthday: $ 930 Fifth birthday $ 1,030 Sixth birthday: $ 1,030 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $380,000. If the relevant interest rate is 11 percent for the first six years and 7 percent for all subsequent years, what is the value of the policy at the child's 65th birthday? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Child's 65th birthday 23 You are considering the following two mutually exclusive projects. The crossover rate between these two projects is percent and Project_should be accepted if the required return is greater than the crossover rate. Project A Project B Year 0 1 $38,000 21,500 13,500 13,500 $38,000 13,710 11,500 25,500 2 3 Multiple Choice 14.12%; B 11.94%; A 28 The December 31, 2018, balance sheet of Whelan, Inc., showed long-term debt of $1,385,000, $137,000 in the common stock account, and $2,620,000 in the additional paid-in surplus account. The December 31, 2019, balance sheet showed long-term debt of $1,550,000, $147,000 in the common stock account, and $2,920,000 in the additional paid-in surplus account. The 2019 income statement showed an interest expense of $92,500 and the company paid out $142,000 in cash dividends during 2019. The firm's net capital spending for 2019 was $930,000, and the firm reduced its net working capital investment by $122,000. What was the firm's cash flow to creditors during 2019? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 1,234,567.) Cash flow to creditors What was the firm's cash flow to stockholders during 2019? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 1,234,567.) Cash flow to stockholders 28 Cash flow to stockholders What was the firm's cash flow from assets during 2019? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 1,234,567.) Cash flow from assets What was the firm's operating cash flow during 2019? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 1,234,567.) Operating cash flow