1. Find the system function (i.e.. z-transform) of the following feedback filter:
2. Determine the system function of the system implemented by the following MATLAB statement:
1. Find cost of capital for a company of your choice.
Steps involved: Determine equity beta, determine its current capital structure, determine its pre-tax cost of debt (keep in mind that determining cost of debt for companies with low credit rating involves different approach than for companies with high debt rating), determine weighted average cost of capital (r WACC)
2. Propose an expansion project for the company from question 1 in a business area that is different from its current area(s). Find asset return in the proposed area of business. Find weighted average cost of capital of the expansion project assuming that the company would finance it with the same mixture of debt and equity as the rest of the company.
3. You have just been hired by Internal Business Machines Corporation (IBM) in their capital budgeting division. Your first assignment is to determine the free cash flows and NPV of a proposed new type of tablet computer similar in size to an iPad but with the operating power of a high-end desktop system. Development of the new system will initially require an initial capital expenditure equal to 10% of IBM’s Property, Plant, and Equipment (PPE) at the end of fiscal year 2014. The project will require an additional investment equal to 10% of the initial investment after the first year of the project, a 5% increase after the second year, and a 1% increase after the third, fourth, and fifth years. The product is expected to have a life of five years. First-year revenues for the product are expected to be 3% of IBM’s total revenue for the fiscal year 2014. The new product’s revenues are expected to grow at 15% for the second year then 10% for the third and 5% annually for the final two years of the expected life of the project. Your job is to determine the rest of the cash flows associated with this project. Your boss has indicated that the operating costs and net working capital requirements are similar to the rest of the company and that depreciation is straight-line for capital budgeting purposes. Here are some tips to guide your analysis:
1. Obtain IBM’s financial statements. (If you really worked for IBM you would already have this data, but at least you won’t get fired if your analysis is off target.) Down load the annual income statements, balance sheets, and cash flow statements for the last fiscal years from Yahoo! Finance (finance.yahoo.com). Enter IBM’s ticker symbol and then go to “financials.”
2. You are now ready to estimate the Free Cash Flow for the new product. Compute the Free Cash Flow for each year as
Free Cash Flow=(Revenues-Costs-Depreciation) x(1-TC) + Depreciation – Capital Expenditure –
Set up the timeline and computation of free cash flow in separate, contiguous columns for each year of the project life. Be sure to make outflows negative and inflows positive.
a. Assume that the project’s profitability will be similar to IBM’s existing projects in 2014 and estimate (revenues-costs) each year by using the 2014 EBITDA/Sales profit margin. Calculate EBITDA as EBIT + Depreciation expense from the cash flow statement.
b. Determine the annual depreciation by assuming IBM depreciates these assets by straight-line method over a 5-year life.
c. Determine IBM’s tax rate by using the income tax rate in 2014.
d. Calculate the net working capital required each year by assuming that the level of Net working capital will be a constant percentage of the project’s sales. Use IBM’s 2014 net working capital/sales to estimate the required percentage. (Use only accounts receivable, accounts payable, and inventory to measure working capital. other components of current assets and liabilities are harder to interpret and not necessarily reflective of the project’s required net working capital- for example, IBM’s cash holdings.)
e. To determine the free cash flow, deduct the additional investment and the change in net working capital each year.
3. Use Excel to determine the NPV of the project with a 12% cost of capital.
1. Find an additional heuristic progression by working from the specific to the general. Find one or more related design heuristics in a technology-specific domain. Generalize those heuristics to one or more heuristics that apply across several domains.
2. Find an additional heuristic progression by working from the general to the specific. Choose one or more heuristics from Appendix A. Find or deduce domain specific heuristic design guidelines in a technology domain familiar to you.
1. Figure II.4 shows an affine transformation acting on an F.(a) Is this a linear transformation? Why or why not? (b) Express this affine transformation in the form x → Mx + u by explicitly giving M and u.
2. Prove the angle sum formulas for sin and cos:
1. For the truss shown, a = 4 m, b = 3.5 m, c = 5m
a) Use method of joints to solve for internal forces in DJ and JU.Consider the internal force at TI equal to 1.2 kN, COMPRESSION.
b) Use method of sections to solve for internal forces in WX and WL. Consider the force in member TU equal to 2. kN, TENSION.
Attachments:
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1. Families “in Law” and “in Practice”
Struening discusses social and legal challenges faced by same-sex couples and families. What happens when race is added to the mix, e.g., for African American same-sex couples or for interracial same-sex couples? What cultural, legal or other tools might these couples and families use to resist discrimination on multiple fronts?
To answer this particular question, click the link above. Once you are in the forum, click the “Create Thread” button to view the question again, as well as, create and submit your answer.
2. Racial Literacy and How It Works
What is “racial literacy” as discussed in Rockquemore and Henderson? How do interracial couples use it to resist racism and border patrolling? What are other ways that racia/ethnic minority couples might resist racism? Think back to the Franklin article from Week 1. Did the African American dual career marriages that she studied present a form of resistance to racism? Why or why not?
1.Formal decision making process by which large organization buy services and products is classified as A.organizational buying B. large buying C.small buying D. procedure buying 2. Deciders and buyers in companies are classified as A.evaluators B.approvers C.buyers D.selectors 3.Business markets buy phases, include A.proposal solicitation B.product specification C.order-routine specification D.all of the above 4.Purchasing agents of companies in business markets dominate the A.buyer selection B.trial supplier?s C.product components D.supplier selection 5. Administrator who assists in selection and deselection of purchasing goods and services by screening information about products are A.purchasing agents B.system agents C.evaluation agents D.awareness agents
1.Fernando Baltra Company wished to issue zero coupon straight debt with approximately a 15-year maturity. The company is rated single A by both Moody’s and S&P. How would you estimate the approximate yield if the October 1999 yield curve in Fig.1 and the spreads in Fig.2 prevailed? What is the approximate yield the company would pay?
2) Consider a 1-year risky zero coupon bond issued by company A. Suppose that the proba- bility of default (risk neutral) of A in 1-year is 0.5% and the recovery rate of the bond is 40%. Given riskless 1-year interest rate being 3% (continuously compounding), calculate the 1-year credit spread for company A.
3) Consider a 3-month European put option with a strike price of $100 on an underlying asset which has a current price of $90 and annualized volatility of 20%. The market interest rate is assumed to have a flat term structure so that the interest rate is a fixed quantity of 8%.
(a) Determine the option value by Black Scholes formula.
(b) What is the meaning of delta-normal approach to VAR for measuring risks of deriva- tives positions?
(c) What is the 99% daily delta-normal VaR in return of issuing this option? (Hint:z0.01=2.33)
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Part B: Homework Assignment (Please submit on or before the due date)1. Fernando Baltra Company wished to issue zero coupon straight debt with approximatelya 15-year maturity. The company is rated single A by both Moody’s and S&P. Howwould you estimate the approximate yield if the October 1999 yield curve in Fig.1 andthe spreads in Fig.2 prevailed? What is the approximate yield the company would pay?2. Consider a 1-year risky zero coupon bond issued by company A. Suppose that the proba-bility of default (risk neutral) of A in 1-year is 0.5% and the recovery rate of the bond is40%. Given riskless 1-year interest rate being 3% (continuously compounding), calculatethe 1-year credit spread for company A.3. Consider a 3-month European put option with a strike price of $100 on an underlyingasset which has a current price of $90 and annualized volatility of 20%. The marketinterest rate is assumed to have a ?at term structure so that the interest rate is a ?xedquantity of 8%.(a) Determine the option value by Black Scholes formula.(b) Whatisthemeaningofdelta-normalapproachtoVARformeasuringrisksofderiva-tives positions?(c) What is the 99% daily delta-normal VaR in return of issuing this option? (Hint:z =
1. For perfectly price inelastic supply
supply determines price solely.
demand determines price solely.
only a government can set the price.
either supply or demand may set the price.
2. For Matthew, the marginal utility of the 9th soda in a day is positive and the marginal utility of the 10th soda in a day is zero. This
implies that Matthew's demand curve for sodas per day will become upward sloping at 10 sodas per day.
is impossible because each additional unit of consumption of any good must provide positive marginal utility.
implies that at a zero price Matthew's demand curve will intersect the quantity axis at 10.
implies that Matthew maximizes utility by consuming 9 sodas per day.
3. Jane has $500 a Week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. Jane spends her entire income when she purchases ________ units of clothing and ________ units of food.
10; 10
25; 5
12; 20
16; 8
4.Michael Dell was the first individual who sold computers by mail order. The company founded by Dell is now one of the largest and most successful computer companies in the United States. Michael Dell would be classified as a(n)
entrepreneur.
opportunist.
monopolist.
socialist.
5. Demand determines price entirely when
demand is downward sloping.
demand is perfectly inelastic.
supply is perfectly inelastic.
supply is perfectly elastic.
6. As an individual consumes more of a product within a given period of time, it is likely that each additional unit consumed will yield
successively less satisfaction.
successively more satisfaction.
the same amount of satisfaction.
less satisfaction for a while and then start to add more satisfaction.
7. When there are more substitutes for a product, the ________ for the product is ________.
demand; less price elastic
demand; more price elastic
income elasticity; greater
income elasticity; smaller
8. A price change would have the largest income effect on a
magazine.
desktop computer.
piece of clothing.
car.
9. If the demand for sardines increases as income decreases, sardines are a(n)
normal good.
inferior good.
substitute good.
complementary good.
10. Jane has $500 a Week to spend on clothing and food. The price of clothing is $25 and the price of food is $10. The clothing and food pairs in Jane's choice set include ________ units of clothing and ________ units of food.
50; 50
20; 50
15; 25
8; 30
1. Explain why speculating against a currency that is pegged unilaterally to a major currency like the USD is close to a ‘no-lose’ betting situation. Hint: explain what a speculator is likely to lose/gain in either scenario: (a) a speculative attack fails to materialize; and (b) a speculative attack that succeeds in devaluing the currency.
2. If the Argentine government had simply dollarized instead of erecting a currency board, would a financial crisis have been averted? Discuss.
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