1. Medialink is an American company specializing in business intelligence consulting. One of Medialink’s current project is a 2-year commitment with Isotics, with a total estimated revenue of USD2.0 million and estimated cost of USD1.0 million. Costs are expected to be spread out evenly over each month.

After the first month, under IFRS, Medialink’s recognized revenue is expected to be closest to:

2. You are provided with the following information on a non-callable, non-convertible preferred stock:

Face value: GBP65.00
Annual dividend: GBP6.35
Maturity: Perpetual
Embedded options: None
Required rate of return: 8.75%

The intrinsic value of this stock is closest to:

3. Given the following data, determine the cash flow from operations:

Sales = USD2,100m
Increase in inventory = USD200m
Depreciation = USD125m
Increase in accounts receivable = USD75m
Decrease in accounts payable = USD70m
After tax profit margin = 35%
Gain on sale of machinery = USD30m

4. Which of the following statements relating to obstacles to efficient allocation of resources is/are most likely incorrect?

I: Price ceilings set below the equilibrium price lead to shortages, bribery, poor quality and black marketeering.
II: Subsidies decrease equilibrium quantities and lead to dead weight losses from overproduction.
III: Production quotas decrease equilibrium quantities and lead to dead weight losses from underproduction.

5. Haspiess Systems, Inc. and Signicomp Manufacturing enter into a netted interest rate swap, with a notional USD75M. Haspiess will pay a fixed 5%, and Signicomp will pay LIBOR + 75bp. LIBOR is 3.5%.

The first semiannual payment will be closest to: