You have just completed a $ 20 comma 000 feasibility study for a new coffee shop in some retail space you own. You bought the space two years ago for $ 100 comma 000, and if you sold it today, you would net $ 115 comma 000 after taxes. Outfitting the space for a coffee shop would require a capital expenditure of $ 30 comma 000 plus an initial investment of $ 5 comma 000 in inventory. What is the correct initial cash flow for your analysis of the coffee shop opportunity? g

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