You are required to Answer the following questions: Case Study 1: Buy or Rent: Living in Singapore (Concept application: Time value of money) Case Synopsis: Mr. and Mrs. Wong and their three young children had rented a condominium unit in Singapore for SG$4000 per month for the past six years. They had been watching the property market with the objective of buying a home of their own. A large unit in the same building finally become available for sale in June 2016. Coincidently, their rental lease would expire soon after that date. If they decided to buy the larger unit, they would hold it for the next 10 years. Their net gain or loss of the buy versus rent decision would depend on the selling price of the unit at the end of 10 years and rental payments. 1. What is the required monthly mortgage payment? 2. 3. What are the initial cash outflows of the buy decision? What is the present value of the initial cash outflows of the buy decision from month 0 to month 120? 4. Compare the relevant monthly cash outflows of the buy decision and rent decision from month 0 to month 3, assuming rent stays constant. What are the additional payments required to buy versus rent? 5. What is the principal outstanding on the mortgage at the end of 10 years? Case Study 2: Hohner Musikinstrumente GmbH & Co. KG (Concept application: break-even analysis) Case Synopsis: Helmut Schmidt, the product manager for Hohner Musikinstrumente GmbH & Co. KG, the world's foremost manufacturer of harmonicas, accordions, melodicas, and ukuleles, was sitting at his desk reviewing his first assignment from the company's senior executive team. Schmidt had been asked to calculate the break-even point for the company's flagship product, the Marine Band harmonica, under a number of different scenarios as mentioned in the case. 1. What is the unit contribution for Hohner? What is Hohner's break-even point? 2. What market share does Hohner need to break even? What is Hohner's profit? 3. Industry demand is expected to increase to 900,000 units next year Schmidt is considering raising his advertising budget to 1 million. a. If the advertising budget is raised, how many units must Hohner sell to break even? b. How many units Hohner sell to achieve the same profit (in terms of dollar amount) next year as it earned this year? C. What must Hohner's market share be next year for its profit (in term of dollar amount) to be the same as this year? 4. After some reflection, Schmidt decided not to increase Hohner's advertising budget. With industry demand expected to increase to 900,000 units next year, Schmidt thought he would give retailers an incentive to promote the Marine Band by raising their margin from 33% to 40%. The margin increase would be accomplished by lowering the manufacturer's price of the product to retailers. Distributor margins would remain at 12%. a. if retailer margins are raised to 40% next year, how many Marine Bands must Hohner sell to break even? b. How many units must Hohner sell to achieve the same fprofit (in terms of dollar amount next year as it earned this year? C. What must Hohner's market share be for its profit (in terms of dollar amount) to remain at this year's level?