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Appendix D Present value of an annuity of $1, PV IFA PVA = A Percent 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% 0.990 0.980 0.971 0.962 0.952 0.943 0.926 0.917 0.909 0.901 0.893 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.759 1.736 1.713 1.690 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.444 2.402 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.170 3.102 3.037 4.853 4.713 4.580 4.452 4.329 4.212 4. 100 3.993 3.890 3.791 3.696 3.605 5.795 5.417 5.242 5.076 4.917 4.623 4.486 4.355 4.231 4. 111 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4.712 4.564 7.652 7.325 7.020 6.733 6.463 6.210 5.971 5.747 5.535 5.335 5.146 4.968 8.566 8. 162 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5.537 5.328 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5.938 12 11.255 10.575 9.385 8.384 7.943 7.536 7.161 6.814 6.492 6. 194 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 14 13.004 12.106 11.296 10.563 9.899 8.745 8.244 7.786 7.367 6.982 6.628 15 13.865 12.849 11.938 11.118 10.380 9. 108 8.559 8.061 7.606 7.191 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7.379 6.974 17 15.562 14.292 13. 166 12. 166 11.274 10.477 9.763 9.122 8.022 7.549 7.120 18 16.398 14.992 13.754 12.659 11.690 10.828 10.059 9.372 8.756 8.201 7.702 7.250 19 17.226 15.678 14.324 13.134 12.085 11. 158 10.336 9.604 8.950 8.365 7.839 7.366 20 18.046 16.351 14.877 13.590 12.462 11.470 10.594 9.818 9.129 8.514 7.963 7.469 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 8.422 7.843 30 25.808 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.694 8.055 40 32.835 27.355 23.115 19.793 17.159 15.046 13.332 11.925 10.757 9.779 8.951 8.244 50 39. 196 25.730 18.256 15.762 13.801 12.233 10.962 9.915 9.042 8.304 Hooper Chemical Company, a major chemical firm that uses such raw materials as carbon and petroleum as part of its production process, is examining a plastics firm to add to its operations. Before the acquisition, the normal expected outcomes for the firm were as follows: Outcomes ($ millions) Probability Recession $19 0.2 Normal economy 56 0.4 Strong economy 70 0.4 Compute the expected value, standard deviation, and coefficient of variation prior to the acquisition. (Do not round intermediate calculations. Enter your dollar answers in millions rounded to 2 decimal places (e.g., $12,300,000 should be entered as "12.30"). Round the coefficient of variation to 3 decimal places.) Expected value $ 50.00 million Standard deviation million Coefficient of variation Reynolds Technology has a convertible bond outstanding, trading in the marketplace at $920. The par value is $1,000, the coupon rate is 8 percent, and the bond matures in 10 years. The conversion ratio is 40, and the company's common stock is selling for $22 per share. Interest is paid semiannually. a. What is the conversion value? (Do not round intermediate calculations and round your answer to 2 decimal places.) Conversion value $ 880.00 ' b. If similar bonds, which are not convertible, are currently yielding 10 percent, what is the pure bond value of this convertible bond? (Use semiannual analysis.) Use Appendix B and Appendix D as an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Myers Business Systems is evaluating the introduction of a new product. The possible levels of unit sales and the probabilities of their occurrence are given next: . . Sales in P0551b1e Market Reactlon Units Probabilities Low response 25 6.26 Moderate response 46 6.36 High response 65 6.26 Very high response 86 6.36 a. What is the expected value of unit sales for the new product? (Do not round intermediate calculations and round your answer to the nearest whole unit.) lm b. What is the standard deviation of unit sales? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Standard deviation units