You have just received notification that you have won the $2 million first prize in the centennial lottery. However, the prize will be awarded on your 100th birthday, 76 years from now. Requried: What is the present value of your windfall if the appropriate discount rate is 8%?

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• Rudd Company has budgeted the following sales revenue for the next four months: - February: $300,000 - March: $240,000 - April: $210,000 - May: $330,000 Past experience indicates that 80% of sales each month are on credit, and from these credit sales: - 60% are collected in the same month as the sale - 35% are collected in the following month - 3% are collected in the second month after the sale - 2% are uncollectible. Based on this information, here's the expected cash receipts from sales for the month of May: 1. Cash receipts from May sales (60% of credit sales and 100% of cash sales): - Total May sales: $330,000 - Credit sales (80% of May sales): $330,000 * 80% = $264,000 - Cash sales (remaining 20% of May sales): $330,000 * 20% = $66,000 - Collections within same month (60% of May credit sales): $264,000 * 60% = $158,400 - Total cash collections from May sales: $158,400 + $66,000 = $224,400 2. Cash receipts from April credit sales (35% collected in May): - April credit sales (80% of April's $210,000): $210,000 * 80% = $168,000 - Collections in May (35% of April credit sales): $168,000 * 35% = $58,800 3. Cash receipts from March credit sales (3% collected in May): - March credit sales (80% of March's $240,000): $240,000 * 80% = $192,000 - Collections in May (3% of March credit sales): $192,000 * 3% = $5,760 Total expected cash receipts for May: - From May sales: $224,400 - From April sales: $58,800 - From March sales: $5,760 Total = $224,400 + $58,800 + $5,760 = $288,960 Therefore, the schedule of expected cash receipts from sales for the month of May is $288,960.
• Assume that Kish Inc. hired you as a consultant to help estimate its cost of common equity. You have obtained the following data: D0 = $0.90; P0 = $27.50; and g = 7.00% (constant). Based on the DCF approach, what is the cost of common equity?
• You are thinking about a project to expand your business. In order to start the project, you have to invest $200,000 in new equipment and $50,000 in working capital. You have to spend $15,000 for installation and $5,000 for shipping of the equipment. A few months ago, you spent $7,000 in consulting. The marginal tax rate of your company is 34%. What is the initial outlay of this project?
• On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 60 million, $2 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $17 on June 13. Prepare a journal entry that summarizes the declaration and distribution of the stock split if it is not to be effected in the form of a stock dividend. What is the par per share after the split?
• Paid-in Capital in Excess of Par Valuea. is credited when no-par stock does not have a stated value.b. is reported as part of paid-in capital on the balance sheet.c. represents the amount of legal capital.d. normally has a debit balance.
• Helmut purchased 100 shares of stock in Caisson Corporation for $1,000 in Year 1. On December 1 of Year 2, he purchased an additional 100 shares in the company for $1,500. On December 28 of Year 2, Helmut sold the 100 shares acquired in Year 1 for $1,200. What is Helmut’s recognized gain or loss from the December 28 sale and what is his resulting basis in the stock purchased on December 1 of Year 2?
• The managers and project team of an IT company are holding a meeting to discuss the project initiation phase. Which consideration is related to this phase? A. project risks B. project end date C. project feasibility D. project start date
• How does an organization’s product mix relate to its development of a product line? When should an enterprise add depth to its product lines rather than width to its product mix?
• Charley Inc. is a large corporation that reported a revenue of $80 million and expenses, excluding interest, of $78 million in 2019. The expenses include a depreciation of $300,000. In 2019, Charley Inc. paid $1 million in business interest. What is the maximum allowable interest expense deduction for this year?
• Erna Company is expected to pay a dividend of $2.41 one year from today and $2.56 two years from today. The company's sales in two years are expected to be $15,450,000. The company has a PS ratio of 1.59 times, and 521,500 shares outstanding. If the required return on the company's stock is 10.4 percent, what is the current stock price?a. 5.52b. 4.28c. 38.65d. 42.93