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Margaret Lykaios is the president and major shareholder of Measureup Ltd., a Canadian-controlled private corporation that operates a construction business in Regina, Saskatchewan. Measureup earns only business income which is all subject to the small business deduction.
 

In 2023, she had a number of financial transactions. She has asked you to help her prepare her 2023 tax return and provide advice on other tax matters. The following additional financial information is provided for 2023:
 

1. Margaret’s gross salary was $99,000, from which Measureup deducted the following amounts.

 
In addition to her salary, Measureup paid $2,000 to a deferred profit-sharing plan, $600 of private health insurance premiums, and $400 of group sickness and accident insurance premiums.
 

1. Margaret is required to use her own automobile for company business. For this, Measureup pays her an annual allowance of $4,000. She purchased a new automobile for $67,400 plus HST (13%), and received $18,000 as a trade on her old car. At the end of the previous year, the old car had an undepreciated capital cost balance of $16,000 (class 10.1). Of the 20,000 km driven in 2023, 13,000 km were for employment purposes. Margaret incurred automobile operating costs of $5,700.
2. For three months during the 2023, Margaret was sick and could not attend work. She received $9,900 from the company’s group sickness and accident insurance plan. Since the plan’s inception, Margaret had paid premiums totalling $2,000.
    
3. Margaret purchased a warehouse property and leased it to Measureup to store construction equipment. The property cost $272,000 (land - 30,000, building - 242,000). The building was originally constructed after March 18, 2007. The price for the land includes $2,200 of permanent landscaping completed just after acquisition. The 2023 rental income is summarized in the following chart.

1. Margaret is a 25% partner in a computer software business but is not active in its management. The partnership financial statement shows a profit of $40,000 for the year ended December 31, 2023. The profit consists of $32,000 from software sales and $8,000 from interest earned.
2. On July 1, 2022, Margaret purchased a three-year guaranteed investment certificate for $20,000 with interest at 9%. The interest compounds annually but is not payable until July 1, 2025.
3. Margaret received (made) the following additional receipts (disbursements).

Required:
Determine Margaret’s net income for tax purposes in accordance with the aggregating formula of Section 3 of the Income Tax Act for 2023. Assume other deductions total $8,000.
 

A firm has days' sales in inventory of 105 days, an average collection period of 35 days, and takes 42 days, on average, to pay its accounts payable. Taken together, what do these three figures imply about the firm's operations and its cash flows?

Olam has been a major Multi-National Food and Agri-Business company supplying food and industrial raw materials. Olam Ghana is one of the leading Agri-Commodity companies in the country and was doing well until an unexpected downturn happened. As a result of the economic downturn, the firm's growth has slowed significantly, causing shareholders to be concerned. As a result, the firm has suffered enormous losses. In light of this, the business proprietors decided to investigate the matter and discovered that the losses were due to incomplete work and late deliveries. Unproductive personnel have been identified as the 
underlying cause of the problem, resulting in poor organisational performance.

Outline cause and effect relationship in the poor employee performance, with a proposed action plan

Please give references

Equity shareholders of Smart Enterprise need money to expand their business. As a Consultant, explain to the firm proprietors five potential funding sources that could enable the business to 
raise the necessary capital. 

 I can answer to your questions  only related to finance for $1-$5  with in short time my mail id is [email protected]

Explain the following, stating clearly their significance to the organisation, shareholders, and implications for investors.  

1. Gross Profit Margin

2. Net Profit Margin

Adding a stock that has zero correlation with your portfolio does not add to your diversification.

Which is a better capital budgeting tool: NPV or Payback period? Why?

Should more volatile stocks have a higher return?

Does the interest tax shield subsidize debt?

Can a firm with no debt lower its WACC by issuing debt?

 Is the price of oil a systematic risk factor, and what is your reasoning?

If two assets have zero covariance, can they still be used to diversify each other even if the CAPM holds?

Can you earn excess returns trading on rumors about a merger? Why or why not?

In a Modigliani-Miller world with no taxes, does de-leveraging recapitalizations (issuing equity and using the proceeds solely to retire debt) increase the stock price?

 Does the interest tax shield subsidize debt?

What does D.C.F. typically stand for in finance?

Tue or False: If firms did not have limited liability, their asset risk would be increased.

Tue or False:  As long as the firm is certain that the return on assets will be higher than the interest rate, an issue of debt makes the shareholders better off. 

Tue or False:   In a perfect capital market, minimizing the weighted average cost of capital is equivalent to maximizing the firm's value. 

True or False:  Shareholders demand and deserve higher expected rates of return than bondholders do. Therefore, debt is the cheaper capital source. We can reduce the WACC by borrowing more.

Consider two ways of getting a mortgage on a house worth $750,000. You plan to

make a down payment of $300,000 at closing. You need to borrow the rest of the $450,000.

The first option is a 15 year fixed-rate mortgage at a 5.25% effective annual interest rate

(assume monthly compounding with 12 payments per year to get a monthly interest rate).

In the second option, you can “buy” a lower effective annual interest rate of 4.5% by paying

the bank an additional $25,000 cash at closing (also assume 12 monthly payments over the

year with monthly compounding). You are still borrowing $450,000, but now you are paying

an additional $25,000 in cash up front at origination (this is commonly called paying “points”

on a mortgage). All other costs are the same under both options.

1. a) Using the monthly interest rate over 180 payments, what would your monthly

payment be under the first scenario?

1. b) Using the monthly interest rate over 180 payments, what would be your

monthly payment under the second scenario?

1. c) Show which option is better.

The Weston Enchilada Company has a levered equity beta of 0.8. The company is

thinking about getting into the Whataburger business. Currently, Weston Enchilada is

financed with 50% long-term debt. The debt is risk free and pays 4% interest before taxes. A

little research suggests that the Whataburger business is expected to yield 16% on after-tax

total operating cash flows. For comparison, another Whataburger in town has an equity beta

of 2.5 but has 20% debt in its capital structure. You can assume that the market return is

12%, marginal tax rates on everything are 35% and the new project would be financed with

50% debt. Find the WACC for the new Whataburger venture and decide what Weston

Enchilada should do?

Drayton McLane sold the Astros a few years back for about $645 Million. (You

can assume he sold it at the end of 2011). He originally purchased the team at the end of

1992 for $117 million. Back in 1992 the S&P 500 stock market index was at about $30 and it

was about $120 at the end of 2011 (adjusted for splits and dividends). You can assume the

yield on treasuries was about 4% over the period and the expected market risk premium was

5.5%. Also, forget about any other cash flows from ownership rights, franchise fees,

subsidies for the stadium etc. Assume the whole deal was 100% equity. Based on the

purchase and sale price, was it a good deal?

A protective collar involves buying an out-of-the-money put and writing an out-

of-the-money call on an underlying asset that you own. Let’s say you own an S&P 500 index

security that is currently trading at $30/share. You bought the index at $10 per share so you

currently have a big capital gain. You don’t want to sell your shares, but you want to lock in

your profits with a protective collar for the next year. You want to make sure you can sell

your shares for at least $29/share. The standard deviation of returns on the S&P 500 is 20%

and the assume risk free rate is 2%.

1. a) How much would it cost to buy the put?

1. b) What strike price should you set on the call so that you make the same premium that you paid for the put (zero net cost)?

1. c) Draw the net profit diagram for the entire protective collar position (long stock,  long put, short call) at maturity (including the premiums). Carefully label in detail all axis, strike prices, payoffs, etc.

) Consider a firm that is financed THREE ways: common equity, preferred equity, and long term debt. The firm is considering replacing all of the machinery in its Cleveland plant. They have more than enough cash on hand to pay for the project without raising

external capital. Some relevant information about the firm is given below. Based on all THREE sources of funding, what cost of capital should the firm use to evaluate the project?

Stock Price (Common Shares)

$                    15

Number of common shares outstanding

$ 5,000,000

Equity beta (for common stock)

2.5

Stock Price (Preferred Shares)

$                      8

Number of preferred shares outstanding

$ 10,000,000

Dividends per share on preferred stock

$1.00

Market value of Total Debt outstanding

$      50,000,000

Yield to maturity on the firm's long term debt

6.5%

Coupon rate on the firms long term debt

2%

Coupon tax ratae

35%

Risk-free rate

4.5%

Market Risk Premium

5.5%

Your firm is considering a new three-year project. You know that the

unlevered cost of equity for firms with a similar risk as your target is 8%. At the end of the

project, all available funds are distributed to equity and debt holders. Use the following

financial statements to answer the questions on the next page:

Year

0

1

2

3

Income statement

Sales

$175,000

$175,000

$175,000

COGS

$26,250

$26,250

$26,250

Depreciation

$100,000

$100,000

$100,000

EBIT

$48,750

$48,750

$48,750

Interest payment on debt

$9,000

$9,000

$9,000

Profit Before tax

$39,750

$39,750

$39,750

Taxes

$21,863

$21,863

$21,863

Profit after tax

$17,888

$17,888

$17,888

Dividends

$17,888

$17,888

$17,888

Retained earnings

$0

$0

$0

Balance Sheet

Cash and Mark. Sec.

$0

$100,000

$200,000

$300,000

Current Assets

$0

$0

$0

$0

Fixed Assets

   At cost

$300,000

$300,000

$300,000

$300,000

   Acc. Depreciation

$0

$100,000

$200,000

$300,000

   Net Fixed Assets

$300,000

$200,000

$100,000

$0

Total Assets

$300,000

$300,000

$300,000

$300,000

Current liabilities

$0

$0

$0

$0

Debt

$150,000

$150,000

$150,000

$150,000

Stock

$150,000

$150,000

$150,000

$150,000

Acc. Ret. Earn.

$0

$0

$0

$0

Total liab.and equity

$300,000

$300,000

$300,000

$300,000

1. a) How large an equity investment does the project require upfront?

1. b) How much equity is recovered at the end of the project?

1. c) Show the cash to and from equity holders for the entire project. Don’t forget

about dividends, initial, and terminal equity flows. Actual cash, not free cash flow!

Year

0

1

2

3

Total cash flows to equity

1. d) Based on the cash flows in part c, what is the IRR for the equity holders?

1. e) What is the present value of the tax shield for this three-year project?

Remember, this is not a perpetuity, it’s a three-year project.

1. f) Is this a good project for shareholders?

A firm is considering two mutually exclusive projects, A and B. The projects are

different in that they have different returns depending on general economic conditions. The

firm forecasts that return on the market, and the returns on each project, along with their

associated probabilities will be given by the following table. You can assume a 5% risk free

rate and a 6% market risk premium. Assume the CAPM holds. Compare the expected

returns to the cost of capital for each project and decide which project the firm should choose.

Extreme Recession

Moderate Recession

Normal

Moderate Growth

Extreme Growth

Pr[economic condition]

15%

20%

30%

20%

15%

Return on the market

-12%

0%

12%

24%

36%

Return on project A

-35%

2%

10%

20%

20%

Return on project B

-9%

0%

12%

22%

28%

COST OF CAPITAL FOR PROJECT A ACROSS CONDITIONS =

COST OF CAPITAL FOR PROJECT B ACROSS CONDITIONS =

Which project  should  firm choose  and why?

True or False: If firms did not have limited liability, their asset risk would be increased.

True or False: As long as the firm is certain that the return on assets will be higher than the interest rate, an issue of debt makes the shareholders better off. 

Piperazine, C4H10N2, is a diprotic weak base (pKb1 = 4.22 and pKb2 = 8.67). A sample of piperazine is dissolved in 100.0 mL of water and titrated with 0.500 M HCl. It takes 48.00 mL of HCl to reach the second equivalence point.

SHOW ALL WORK

a) What was the original concentration of the piperazine solution?

b) Calculate the pH after the following amounts of HCl have been added: 0 mL, 12.00mL, 24.00mL,36.00mL, 48.00mL, and 60.00mL

c) Sketch the titration curve for this titration

d) Which of the following indicators could be used to detect the first equivalence point? The second?

     Indicator                              Ka                         Color Change

     ______________________________________________________________

     Bromocresol green             2.5 x 10^-5             yellow => blue-green

     Phenol Red                         2.5 x 10^-8            yellow => red

     Methyl Yellow                     3.5 x 10^-4             red     => yellow

     Alizarin Yellow                     8.9 x 10^-12          yellow => red