On september 1, year 1, keefer company received an order to sell a machine to a customer in canada at a price of 100,000 canadian dollars. the machine was shipped and payment was received on march 1, year 2. on september 1, year 1, keefer company purchased a put option giving it the right to sell 100,000 canadian dollars on march 1, year 2, at a price of $75,000. keefer company properly designates the option as a fair value hedge of the canadian-dollar firm commitment. the option cost $1,700 and had a fair value of $2,800 on december 31, year 1. the fair value of the firm commitment is measured through reference to changes in the spot rate. the following spot exchange rates apply: date u. s. dollar per canadian dollar september 1, year 1 $ 0.75 december 31, year 1 0.73 march 1, year 2 0.71 keefer company’s incremental borrowing rate is 12 percent. the present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803. what was the net impact on keefer company’s year 1 income as a result of this fair value hedge of a firm commitment?

Reactive power generation has the following capital structure. its corporate tax rate is 40%. security market value required rate of return debt $ 30 million 4 % preferred stock 30 million 6 common stock 40 million 10 what is its wacc? (do not round intermediate calculations. enter your answer as a percent rounded to 2 decimal places.)

Lo.2, 3, 9 lori, who is single, purchased 5-years class property for $200,00 and 7-years class property for $420,000 on may 20, 2018. lori experts the taxable income derived form the business (without regard to the amount expensed under ⧠179) to be about $550,000. lori has determined that she should elect immediate ⧠179 expensing in the amount of $520,000, but she doesn’t know which asset she should completely expense under ⧠179. she does not claim any available additional first-year depreciation. a. determine lori’s total cost recovery deduction if the ⧠179 expense is first taken with respect to the 5-year class asset. b. determine lori’s total cost recovery deduction if the ⧠179 expense is first taken with respect to the 7-year class asset. c. what is your advice for lori? d. assume that lori is in the 24% marginal tax bracket and that she uses ⧠179 on the 7-year asset. determine the present value of the tax savings from the depreciation deductions for both assets. see appendix g for present value factors, and assume a 6% discount rate. e. assume the same facts as in part (d), except that lori decides not to use ⧠179 on either asset. determine the present value of the tax savings under this choice. in addition, determine which option lori should choose. f. present your solution to parts (d) and (e) of the problem in a spreadsheet using appropriate microsoft excel formulas. e-mail your spreadsheet to your instructor with a two-paragraph summary of your findings.

Afamily wishes to save for future college expenses. which financial tool should the family invest in?