Question 4 FOR THE FOLLOWING QUESTION USE BA II PLUS FINANCIAL CALCULATOR. MENTION ALL KEYS! NO MARKS GIVEN IF KEYS ARE NOT MENTIONED. I Construct an amortization schedule for a $3,000,9% semi-annual compounded loan. The loan is for 2 years. (Note payments will now be semi-annual). (5 marks) II. (a). A college student is 23 years old and a recent graduate. He wants to start saving for his retirement. He plans to save $2000 per year in an online stock account that pays annual return of 9.5%. If he sticks to the plan, how much money will he have at the age of 652 (make a time-line). (4 marks) (b). Suppose he starts saving for the retirement at the age of 40. If he uses the same plan above, how much money will he have at the age of 65? (2 marks) (e). What advice regarding savings will you give to the college graduate? (Analyze and interpret the findings above). (3 mark) III. What is the best selection for Amber from the following options? She has just won a lottery. She expects to earn 7.5% annually. (6 marks) Option 1: She can elect to receive a lump sum today $63million Option 2: She can elect to receive 10 end-of-year payments of $9.8 million Option 3: She can elect to receive 30 end-of-year payments of $5.8 million. Option 4 : She can elect to receive 30 start-of-year payments of S6.8 million. Find below the financial data for Garden Co. Note that the firm has no amortization charges, it does not lease any assets, and none of its debt must be retired during the next 5 years (notes payable will be rolled over). Assume a 365-day year. GARDEN CO. BALANCE SHEET (millions of dollars) Cash $140.0 Accounts payable $ 800.0 Acets. receivable 880.0 Notes payable 600.0 Inventories 1,320.0 Accruals 400.0 Total current $2,340.0 Total current liabilities $1,800.0 assets Long-term bonds 1,000.0 Total debt $2,800.0 Common stock 200.0 Retained earnings 1,000.0 Net plant & equip. 1,660.0 Total common equity $1,200.0 Total assets $4,000.0 Total liabilities & equity $4,000.0 OTHER DATA Sales - $ 6,000.0 Depreciation expense - $ 100.2 Operating income - $ 300.0 Interest expense = $ 96.0 Net income = $ 122.4 Shares outstanding (millions) Common dividends (millions) Interest rate on N/P and long-term bonds Federal plus state income tax rate Market Stock price 60.00 $42.8 6.08 408 $30.60 1 a. Calculate and analyze the firm's: Asset utilization (6 marks) II. Market value ratios (6 marks) b. Calculate the firm's ROE using Du-pont equation. (3 marks) CALCULATE THE ANSWER USING FORMULA (MANUAL APPROACH). You are valuing a project that has an investment cost of $15,000. This project will generate cash flow of $9.000 the first year, S12.000 the second year, S16,000 the third year, $20,000 the fourth year, 518,000 the fifth year, and $30,000 the sixth year (all cash flows are at the end of each year). What it the value of the project to you now (i.e. today) if the appropriate annual discount rate is 12%? (Make a time-line). (5 marks) ZUES COMPANY: BALANCE SHEETS FOR YEAR ENDING DECEMBER 31 (MILLIONS OF DOLLARS) 2018 2019 Assets: Cash and marketable securities $ 36,0 30.0 Accounts receivable 2 450.0 Inventories 540.0 Total current assets $1,116,0 $1,080.0 Net plant and equipment 2 Total assets $2,016.0 $1,830.0 $ Liabilities and equity: Accounts payable Notes payable Accruala Total current liabilities Long-term bonds Total debt Common stock (50 million shares @ $3 per share) Retained earnings Total common equity Total liabilities and equity 324.0 201.0 216.0 $ ? 450.0 2 2 675.9 $ 270.0 ? 180.0 5605.0 450.0 2 ? 625.0 S2 $1,830.0 92,016,0 Sales for 2018 were $3.000. In 2019 sales increases by 20% and the corporate income tax is 35% Operating costs (excluding depreciation and amortization) is 85% of sales. Depreciation and amortization expenses for year 2018 are $75 and for year 2019 its 590. Interest Expense for year 2018 is $60 and for 2019 its $65. Common dividends for 2018 and 2019 are $13.2 and S815 respectively. a Calculate the missing value in the balance sheet. (2 marks) . Make income statement for years 2018 and 2019.14 marks) c. Calculate company's net operating profit after taxes (NOPAT) for 2019? (2 marks) d. Calculate company's free cash flow (FCF) for the year 2019. (2 marks) c. Analyze the company's FCF. (This analysis is specific to the Zues Company, and does not require you to define FCF). 15 marks)