ASSIGNMENT 08 BU440 Financial Management II Directions : Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling, and grammar. Respond to the items below. Part A: Cash Flow of Accounts Receivable Myers and Associates, a famous law office in California, bills its clients on the first of each month. Clients pay in the following fashion: 40% pay at the end of the first month, 30% pay at the end of the second month, 20% pay at the end of the third month, 5% pay at the end of the fourth month, and 5% default on their bills.

Myers wants to know the anticipated cash flow for the first quarter of 2009 if the past billings and anticipated billings follow this same pattern. The actual and anticipated billings are as follows. Fourth Quarter Actual Billings First Quarter Anticipated Billings Oct. Nov. Dec.

Jan. Feb. Mar. 2,000 3,000 6,000 0,000 0,000 8,000 Part B: Straight Bank Loan Right Bank offers EAR loans of 9.38% and requires a monthly payment on all loans. a. What is the APR for these monthly loans? b. What is the monthly payment for the following?

1. A loan of 0,000 for six years 2. A loan of 0,000 for twelve years 3. A loan of ,250,000 for thirty years Part C: Selling Bonds Astro Investment Bank has the following bond deals under way: Company Bond Yield Commission Coupon Rate Maturity Gravity Belts 8.0% 2% of Sale Price 8.0% 10 years Invisible Rays 9.0% 3% of Sale Price 12.0% 10 years Solar Glasses 7.0% 2% of Sale Price 5.0% 20 years Space Ships 12.0% 4% of Sale Price 0% 20 years Determine the net proceeds of each bond and the cost of the bonds for each company in terms of yield. The bond yield in the table is the market yield before the commission is charged.

Assume that all bonds are semiannual and issued at a par value of ,000. Grading Rubric Please refer to the rubric on the next page for the grading criteria for this assignment. CATEGORYExemplarySatisfactoryUnsatisfactoryUnacceptable 20 points 15 points 10 points 5 points Student correctly calculates the anticipated cash flow per month and in total for the quarter. Student correctly calculates the anticipated cash flow for three of the following: each month and in total for the quarter. Student correctly calculates the anticipated cash flow for two of the following: each month and in total for the quarter.

Student correctly calculates the anticipated cash flow for one of the following: each month and in total for the quarter. 20 points 15 points 10 points 5 points Student correctly calculates all of the following: the APR and three monthly payments. Student correctly calculates three of the following: the APR and three monthly payment amounts. Student correctly calculates two of the following: the APR and three monthly payment amounts. Student correctly calculates one of the following: the APR and three monthly payment amounts.

10 points 8 points 5 points 2 points Student accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. Student somewhat accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student somewhat accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. 10 points 8 points 5 points 2 points Student accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield.

Student accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. Student somewhat accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student somewhat accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. 10 points 8 points 5 points 2 points Student accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield.

Student somewhat accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student somewhat accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. 10 points 8 points 5 points 2 points Student accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. Student somewhat accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield.

Student somewhat accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. 10 points 8 points 5 points 2 points Student makes no errors in grammar or spelling that distract the reader from the content. Student makes 1-2 errors in grammar or spelling that distract the reader from the content. Student makes 3-4 errors in grammar or spelling that distract the reader from the content. Student makes more than 4 errors in grammar or spelling that distract the reader from the content.

10 points 8 points 5 points 2 points The paper is written in proper format. All sources used for quotes and facts are credible and cited correctly. The paper is written in proper format with only 1-2 errors. All sources used for quotes and facts are credible and most are cited correctly. The paper is written in proper format with only 3-5 errors.

Most sources used for quotes and facts are credible and cited correctly. The paper is not written in proper format. Many sources used for quotes and facts are less than credible (suspect) and/or are not cited correctly. Part C2:Selling Bonds - Invisible Rays (10 points) Part C3: Selling Bonds - Solar Glasses (10 points) Format (10 Points) Part A: Cash Flow of A/R (20 points) Mechanics (10 Points) Part B: Straight Bank Loan (20 points) Part C4: Selling Bonds -Space Ships (10 points) Part C1: Selling Bonds - Gravity Belts (10 points) Topics: INTRO REALISM Watch: (8:46) Nineteenth-century art Watch : (5:46) Couture, Romans of the Decadence (1847) Read : A Beginner’s Guide to Realism Read : Courbet, Bonjour Monsieur Courbet Watch (3:08) Manet, Le déjeuner sur l'herbe (1863) (Luncheon on the Grass) Watch (7:14) Manet, Olympia (1865) Watch (4:34) Manet, à‰mile Zola Watch (3:34) Manet, The Railway Watch (5:34) Manet, A Bar at the Folies-Bergère What is your favorite artwork? Why? (The why is your thesis or argument or main point) (300 words) - Make sure to title

Paper for above instructions

Part A: Cash Flow of Accounts Receivable

To analyze Myers and Associates' cash flow for the first quarter of 2009 (January, February, and March), we first need to understand the billing and payment pattern of their clients. Myers and Associates expect a certain percentage of their clients to pay their bills at various intervals. The anticipated cash inflows based on past billings are outlined as follows:
- Fourth Quarter Actual Billings
- October: 2,000
- November: 3,000
- December: 6,000
- First Quarter Anticipated Billings
- January: 0,000
- February: 0,000
- March: 8,000

Breakdown of Cash Flows:

1. January Cash Flow:
- Receipts from October: 40% of 2,000 = 6,800
- Receipts from November: 30% of 3,000 = ,900
- Receipts from December: 20% of 6,000 = ,200
Total Cash Flow for January: 6,800 + ,900 + ,200 = 2,900
2. February Cash Flow:
- Receipts from November: 40% of 3,000 = 9,200
- Receipts from December: 30% of 6,000 = ,800
- Receipts from January: 20% of 0,000 = ,000
Total Cash Flow for February: 9,200 + ,800 + ,000 = 6,000
3. March Cash Flow:
- Receipts from December: 40% of 6,000 = 8,400
- Receipts from January: 30% of 0,000 = 2,000
- Receipts from February: 20% of 0,000 = ,000
Total Cash Flow for March: 8,400 + 2,000 + ,000 = 2,400

Total Cash Flow for the Quarter:

Total for Q1 (January + February + March) = 2,900 + 6,000 + 2,400 = 1,300

Part B: Straight Bank Loan

For the loans offered by Right Bank at an effective annual rate (EAR) of 9.38%, we can derive the Annual Percentage Rate (APR) and calculate monthly payments using the loan payment formula.

a. Calculate APR

The relationship between EAR and APR can be established using the formula:
\[ \text{APR} = n \times \left( (1+\text{EAR})^{1/n} - 1 \right) \]
Where:
- n = number of compounding periods per year (12 for monthly payments)
Substituting the given values; with EAR = 9.38% or 0.0938:
\[ \text{APR} = 12 \times \left( (1+0.0938)^{1/12} - 1 \right) \]
\[ \text{APR} \approx 0.0938 \text{, or } 9.38\% \text{ (since APR and EAR are identical for monthly compounding)}\]

b. Monthly Payments Calculation

Using the loan payment formula:
\[ M = P \frac{r(1+r)^n}{(1+r)^n - 1} \]
Where:
- M = monthly payment
- P = principal amount (loan amount)
- r = monthly interest rate (APR / 12)
- n = total number of payments (loan term in months)
1. For a loan of 0,000 for six years (72 months):
- APR = 0.0938
- Monthly interest rate = 0.0938 / 12 = 0.0078167
- Number of payments (n) = 6 years × 12 months/year = 72 months
\[ M = 200,000 \frac{0.0078167(1+0.0078167)^{72}}{(1+0.0078167)^{72} - 1} \]
\[ \approx 3,354.74 \]
2. For a loan of 0,000 for twelve years (144 months):
\[ M = 450,000 \frac{0.0078167(1+0.0078167)^{144}}{(1+0.0078167)^{144} - 1} \]
\[ \approx 4,706.77 \]
3. For a loan of ,250,000 for thirty years (360 months):
\[ M = 1,250,000 \frac{0.0078167(1+0.0078167)^{360}}{(1+0.0078167)^{360} - 1} \]
\[ \approx 9,989.49 \]

Part C: Selling Bonds

Calculation for Net Proceeds of Bonds

Using the bond yield, commission, coupon rate, and par value (,000), we will calculate the net proceeds.
1. Gravity Belts:
- Bond Yield: 8.0%
- Commission: 2% ()
- Coupon Rate: 8.0%
- Net Proceeds = Par Value - Commission = ,000 - = 0
Cost to Company:
- Yield = (Annual Payment / Net Proceeds) = ( / 0) x 100 = 8.16%
2. Invisible Rays:
- Bond Yield: 9.0%
- Commission: 3% ()
- Coupon Rate: 12.0%
- Net Proceeds = ,000 - = 0
Cost to Company:
- Yield = (0 / 0) x 100 = 12.37%
3. Solar Glasses:
- Bond Yield: 7.0%
- Commission: 2% ()
- Coupon Rate: 5.0%
- Net Proceeds = ,000 - = 0
Cost to Company:
- Yield = ( / 0) x 100 = 5.10%
4. Space Ships:
- Bond Yield: 12.0%
- Commission: 4% ()
- Coupon Rate: 0%
- Net Proceeds = ,000 - = 0
Cost to Company:
- Yield = (

Assignment 08bu440 Financial Management Iidirections Be Sure To Save

ASSIGNMENT 08 BU440 Financial Management II Directions : Be sure to save an electronic copy of your answer before submitting it to Ashworth College for grading. Unless otherwise stated, answer in complete sentences, and be sure to use correct English, spelling, and grammar. Respond to the items below. Part A: Cash Flow of Accounts Receivable Myers and Associates, a famous law office in California, bills its clients on the first of each month. Clients pay in the following fashion: 40% pay at the end of the first month, 30% pay at the end of the second month, 20% pay at the end of the third month, 5% pay at the end of the fourth month, and 5% default on their bills.

Myers wants to know the anticipated cash flow for the first quarter of 2009 if the past billings and anticipated billings follow this same pattern. The actual and anticipated billings are as follows. Fourth Quarter Actual Billings First Quarter Anticipated Billings Oct. Nov. Dec.

Jan. Feb. Mar. $392,000 $323,000 $296,000 $340,000 $360,000 $408,000 Part B: Straight Bank Loan Right Bank offers EAR loans of 9.38% and requires a monthly payment on all loans. a. What is the APR for these monthly loans? b. What is the monthly payment for the following?

1. A loan of $200,000 for six years 2. A loan of $450,000 for twelve years 3. A loan of $1,250,000 for thirty years Part C: Selling Bonds Astro Investment Bank has the following bond deals under way: Company Bond Yield Commission Coupon Rate Maturity Gravity Belts 8.0% 2% of Sale Price 8.0% 10 years Invisible Rays 9.0% 3% of Sale Price 12.0% 10 years Solar Glasses 7.0% 2% of Sale Price 5.0% 20 years Space Ships 12.0% 4% of Sale Price 0% 20 years Determine the net proceeds of each bond and the cost of the bonds for each company in terms of yield. The bond yield in the table is the market yield before the commission is charged.

Assume that all bonds are semiannual and issued at a par value of $1,000. Grading Rubric Please refer to the rubric on the next page for the grading criteria for this assignment. CATEGORYExemplarySatisfactoryUnsatisfactoryUnacceptable 20 points 15 points 10 points 5 points Student correctly calculates the anticipated cash flow per month and in total for the quarter. Student correctly calculates the anticipated cash flow for three of the following: each month and in total for the quarter. Student correctly calculates the anticipated cash flow for two of the following: each month and in total for the quarter.

Student correctly calculates the anticipated cash flow for one of the following: each month and in total for the quarter. 20 points 15 points 10 points 5 points Student correctly calculates all of the following: the APR and three monthly payments. Student correctly calculates three of the following: the APR and three monthly payment amounts. Student correctly calculates two of the following: the APR and three monthly payment amounts. Student correctly calculates one of the following: the APR and three monthly payment amounts.

10 points 8 points 5 points 2 points Student accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. Student somewhat accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student somewhat accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. 10 points 8 points 5 points 2 points Student accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield.

Student accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. Student somewhat accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student somewhat accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. 10 points 8 points 5 points 2 points Student accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield.

Student somewhat accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student somewhat accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. 10 points 8 points 5 points 2 points Student accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield. Student accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. Student somewhat accurately determines the net proceeds of the bond and the cost of the bonds for the company in terms of yield.

Student somewhat accurately determines either the net proceeds of the bond or the cost of the bonds for the company in terms of yield. 10 points 8 points 5 points 2 points Student makes no errors in grammar or spelling that distract the reader from the content. Student makes 1-2 errors in grammar or spelling that distract the reader from the content. Student makes 3-4 errors in grammar or spelling that distract the reader from the content. Student makes more than 4 errors in grammar or spelling that distract the reader from the content.

10 points 8 points 5 points 2 points The paper is written in proper format. All sources used for quotes and facts are credible and cited correctly. The paper is written in proper format with only 1-2 errors. All sources used for quotes and facts are credible and most are cited correctly. The paper is written in proper format with only 3-5 errors.

Most sources used for quotes and facts are credible and cited correctly. The paper is not written in proper format. Many sources used for quotes and facts are less than credible (suspect) and/or are not cited correctly. Part C2:Selling Bonds - Invisible Rays (10 points) Part C3: Selling Bonds - Solar Glasses (10 points) Format (10 Points) Part A: Cash Flow of A/R (20 points) Mechanics (10 Points) Part B: Straight Bank Loan (20 points) Part C4: Selling Bonds -Space Ships (10 points) Part C1: Selling Bonds - Gravity Belts (10 points) Topics: INTRO REALISM Watch: (8:46) Nineteenth-century art Watch : (5:46) Couture, Romans of the Decadence (1847) Read : A Beginner’s Guide to Realism Read : Courbet, Bonjour Monsieur Courbet Watch (3:08) Manet, Le déjeuner sur l'herbe (1863) (Luncheon on the Grass) Watch (7:14) Manet, Olympia (1865) Watch (4:34) Manet, à‰mile Zola Watch (3:34) Manet, The Railway Watch (5:34) Manet, A Bar at the Folies-Bergère What is your favorite artwork? Why? (The why is your thesis or argument or main point) (300 words) - Make sure to title