Green lawns provides a lawn fertilizer and weed control service. the company is adding a special aeration treatment as alow-cost extra service option that it hopes will attract new customers. management is planning to promote this newservice in two media: radio and direct-mail advertising. a media budget of $3.000 is available for this promotionalcampaign. based on past experience in promoting its other services, green lawns has obtained the following estimate ofthe relationship between sales and the amount spent on promotion in these two media. s= —2r2— iomi—8rm+ ibr+34mwhere5 = total sales in thousands of dollarsr: thousands of dollars spent on radio advertisingm = thousands of dollars spent on direct-mail advertisinggreenlawns would like to develop a promotional strategy that will lead to maximum sales subject to the restrictionprovided by the media budget. a. what is the value of sales if $2,000 is spent on radio advertising and $1,000 is spent on direct-mail advertising? b. formulate an optimization problem that can be solved to maximize sales subject to the media budget of spending nomore than $3,000 on total advertising. c. determine the optimal amount to spend on radio and direct-mail advertising. how much in sales will be generated?

The treasurer for pittsburgh iron works wishes to use financial futures to hedge her interest rate exposure. she will sell five treasury futures contracts at $139,000 per contract. it is july and the contracts must be closed out in december of this year. long-term interest rates are currently 7.30 percent. if they increase to 9.50 percent, assume the value of the contracts will go down by 20 percent. also if interest rates do increase by 2.2 percent, assume the firm will have additional interest expense on its business loans and other commitments of $149,000. this expense, of course, will be separate from the futures contracts. a. what will be the profit or loss on the futures contract if interest rates increase to 9.50 percent by december when the contract is closed out

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity.calculate the cost of new stock using the dividend growth approach.what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics.each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings.equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g

Factors like the unemployment rate, the stock market, global trade, economic policy, and the economic situation of other countries have no influence on the financial status of individuals. question 1 options: true false