Wholesale Lumber, Ltd. is a firm that distributes lumber to building supply and home improvement retail stores. The firm's cost of sales for the most recent year was $45 million, its beginning inventory was $16 million, and its ending inventory was $18 million. Estimate Wholesale Lumber's purchases of lumber materials for the year.

ACTIVITY 2 MF620 Financial Statement Development and Analysis Lesson 2: Financial Performance Activity 2: Financial Performance (4 pages, 100 points) Part A Bigco's balance sheet one year ago indicated retained earnings of $450 million. This year, Bigco's net income was $35 million. It paid its preferred shareholders a dividend of $5 million and paid its common shareholders a regular dividend of $6 million, along with a special one-time dividend of $10 million. What should be the retained earnings amount on this year's balance sheet? Part B Wholesale Lumber, Ltd. is a firm that distributes lumber to building supply and home improvement retail stores. The firm's cost of sales for the most recent year was $45 million, its beginning inventory was $16 million, and its ending inventory was $18 million. Estimate Wholesale Lumber's purchases of lumber materials for the year. Part C Star Inc. has year 1 revenues of $80 million, net income of $9 million, assets of $65 million, and equity of $40 million, as well as year 2 revenues of $87 million, net income of $22 million, assets of $70 million, and equity of $50 million. Calculate Star's return on equity (ROE) for each year based on the DuPont method and compare it with a direct ROE measure. Next, explain why the firm's ROE changed between year 1 and year 2. Grading Rubric Please refer to the rubric on the following page for the grading criteria for this assignment. DISCUSSION QUESTION 3-1 MF620: Financial Statement Development and Analysis Lesson 3: Assessing Future Financial Needs Upon completion of the Required Readings, write a thorough, well-planned narrative answer to the following discussion question. Rely on your Required Readings and the Lecture and Research Update for specific information to answer the discussion question, but turn to your original thoughts when asked to apply, evaluate, analyze, or synthesize the information. Your Discussion Question response should be both grammatically and mechanically correct, and formatted in the same fashion as the question itself. If there is a Part A, your response should identify a Part A, etc. In addition, you must appropriately cite all resources used in your responses and document in a bibliography using APA style. Discussion Question 1 (50 points) Calculate the following: 1. Calculate the present value (PV) of a cash inflow of $500 in one year and a cash inflow of $1,000 in five years, assuming a discount rate of 15 percent. 2. Calculate the present value (PV) of an annuity stream of five annual cash flows of $1,200, with the first cash flow received in one year, assuming a discount rate of 10 percent. 3. What is the present value of a perpetual stream of annual cash flows, with the first cash flow of $100 to be received in one year and with all subsequent cash flows growing at a rate of 3 percent, assuming a discount rate of 8 percent? 4. Consider two bonds, Bond C and Bond D, both with a yield to maturity of 10 percent and with 5 years to maturity. These are standard bonds with semiannual coupon payments. Bond C has a coupon rate of 10 percent (with semiannual coupon payments); Bond D does not pay any coupons (i.e., it a zero-coupon bond). What is the price of each bond? 5. What is the fair value today of a common share with expected annual dividends of $1.00, $1.05, and $1.10 in each of the next three years and an expected share price of $20 in three years, assuming a required return of 9 percent? Grading Rubric Please refer to the rubric on the following page for the grading criteria for this assignment