Finance question and answers for July 03, 2023
- Q P10–14 Internal rate of return Foreach of the projects shown in the following table, calculate theinternal rate of return (IRR). Then indicate, for each project, themaximum cost of capital that the...
- Q A project with a life of 10 has an initial fixed assetinvestment of $10,920, an initial NWC investment of $1,040, and anannual OCF of –$16,640. The fixed asset is fully...
- Q Understanding how capital markets function is critical to theeffective management of corporate growth opportunities as theability to raise funds will have a direct influence on the successor failure of future...
- Q Citee Corp. has no debt but can borrow at 6.2 percent. Thefirm’s WACC is currently 8.5 percent, and the tax rate is 25percent. a. What is the company’s cost of...
- Q Lewis Lumber is considering changing its credit terms from net55 to net 30 to bring its terms in line with other firms in theindustry. Currently, annual sales are $360,000, and...
- Q Sara Woodyard, age forty-four, plans to retire at agesixty-seven. Her life expectancy, accounting for family medicalhistory, is age ninety-seven. Tara is single and currently earns$56,000 per year as a university...
- Q Ryan Taxpayer has two rentals, A & B. Rental Ahas a loss of $30,000, rental B has a loss of$20,000. Ryan is single and has AGI of$110,000. What are the allowable losses by...
- Q Axis Corp. is considering an investment in the best of twomutually exclusive projects. Project Kelvin involves an overhaul ofthe existing? system; it will cost ?$5 and generate cash inflows of?$10...
- Q JAMES Taxpayer has AGI of $100,000 in 2018 for the followingHe has doctor costs of $10,000, hearing aid of $1,000, bayeraspirin of $500, braces of $3,000, and eyeglasses of $1000....
- Q Billabong Tech uses the internal rate of return? (IRR) to selectprojects. Calculate the IRR for each of the following projects andrecommend the best project based on this measure. Project? T-Shirtrequires...
- Q 8) Joe Taxpayer has AGI of $100,000 in 2018 for thefollowinga. He has doctor costs of $10,000, hearing aid of $1,000, bayeraspirin of $500, braces of $3,000, and eyeglasses of...
- Q Skymax has an inventory turnover rate of 11.8, an accountspayable period of 32 days, and an accounts receivable period of 39days. What is the length of the cash cycle?45.68 days41.02...
- Q New-Project AnalysisThe Campbell Company is considering adding a robotic paintsprayer to its production line. The sprayer's base price is$1,000,000, and it would cost another $25,000 to install it. Themachine falls...
- Q 10. Which one of the following is an example of market risk?A firms just launched a new product.The unemployment rate drops to 3.8%.A firm faces new lawsuit from its customers.A...
- Q What is the meaning of the variance or its meaning fro returnsand its use use in creating portfolios...?How risk can be measured using the variance of a stock'sreturn?Include Sources... Base...
- Q Great Lakes Packing has two bond issues outstanding. The firstissue has a coupon rate of 3.42 percent, a par value of $1,000 perbond, matures in 4 years, has a total...
- Q what is the yield to call of a bond that has a couponrate of a 10.25% payable semiannually, a yield to maturity of9.75%. The bond has 12 years to maturity,...
- Q A firm’s outstanding bonds have a $1,000 par value, areinvestment grade and mature in 6 years. These bonds pay interestsemiannually with a coupon of 8.0%. Assume that bond sells for$955.00.(a)...
- Q Yong Importers, an Asian import company, is evaluating twomutually exclusive projects, A and B. The relevant cash flows foreach project are given in the table below. The cost of capital...
- Q Project cash flow and NPV.??The managers of Classic AutosIncorporated plan to manufacture classic Thunderbirds? (1957replicas). The necessary foundry equipment will cost a total of?$4,000,000 and will be depreciated using a?...
- Q Aria Acoustics, Inc. (AAI), projects unit sales for a newseven-octave voice emulation implant as follows:YearUnit Sales173,000286,0003105,000497,000567,000Production of the implants will require $1,500,000 in networking capital to start and additional net...
- Q A 30-year-maturity, 8 percent coupon bond paying couponssemiannually is callable in five years at a call price of $1,100.The bond currently sells at a yield to maturity of 7 percent...
- Q Differentiate between bank overdraft andaccruals.Discuss the different forms of long-term debt.
- Q Compare and contrast a strangle and a straddle?? Make sure todiscuss the payoff,, profit and cost//ppremium of the strategiestoday regarding both strategies.. If you want to include in yourexplanation a...
- Q Brooks Sporting Inc. is prepared to report the following 2016income statement (shown in thousands of dollars).Sales$16,900Operating costs including depreciation13,520EBIT$3,380Interest330EBT$3,050Taxes (40%)1,220Net income$1,830Prior to reporting this income statement, the company wants todetermine...
- Q Hastings Corporation is interested in acquiring VandellCorporation. Vandell has 1 million shares outstanding and a targetcapital structure consisting of 30% debt; its beta is 1.45 (givenits target capital structure). Vandell...
- Q Find the discounted payback period.YEARPROJECT APROJECT BPROJECT CPROJECT D0(10,000)(15,000)(20,000)(30,000)15,0005,00010,0000250005,00010,0000320,0005,0004,000100,00041,00010,0002,000120,0005-5,000-60,000answer : A(3 years) B(4years) C(4 years) D(3 years)Pls show me the working on how to get the discounted paybackperiod. Pls do...
- Q Summers, Inc., is an unlevered firm with expected annualearnings before taxes of $27.7 million in perpetuity. The currentrequired return on the firm’s equity is 14 percent and the firmdistributes all...
- Q A quaint but well-established coffee shop, the Hot New Café,wants to build a new café for increased capacity. Consider thefollowing financial aspects of this endeavor: Expected sales are$800,000 for the...
- Q Molly Jasper and her sister, Caitlin Peters, got into thenovelties business almost by accident. Molly, a talented sculptor,often made little figurines as gifts for friends. Occasionally, sheand Caitlin would set...
- Q Last year, Dollar General had $7,000 in sales, and cost of goodssold was $4,000. Depreciation expenses totaled $1000 and interestexpense was $1400. If the tax rate is 25%, what is...
- Q List one use of additional capital.Explain the benefit in one paragraph.Many changes in reporting standards have been enactedas a result of financial scandals. Identify one specific change inreporting standards or requirements and...
- Q case 47:THE TIMKEN COMPANY5. If Timken decides to go forward with the acquisition, howshould Timken offer to structure the deal? Is Ingersoll-Rand likelyto want a cash deal or a stock-for-stock...
- Q 3. Hyper Mega Awesome Value Inc. is evaluating a projectproposal. The project is expected to require purchasing long-termassets with an installed cost of $400,000. It will also require anincrease in...
- Q At year-end 2016, Wallace Landscaping’s total assets were $1.9million, and its accounts payable were $325,000. Sales, which in2016 were $2.5 million, are expected to increase by 25% in 2017.Total assets...
- Q Mackenzie Company has a price of $ 31 and will issue a dividendof $ 2.00 next year. It has a beta of 1.5 the? risk-free rate is5.7 % and the...
- Q Growth? Company's current share price is $ 20.15and it isexpected to pay a $ 1.15 dividend per share next year. After? that,the?firm's dividends are expected to grow at a rate...
- Q Compute the discounted payback statistic for Project C if theappropriate cost of capital is 8 percent and the maximum allowablediscounted payback period is three years. (Do not roundintermediate calculations and...
- Q The future earnings, dividends, and common stock price ofCallahan Technologies Inc. are expected to grow 8% per year.Callahan's common stock currently sells for $29.50 per share; itslast dividend was $1.50;...
- Q Miami Mutual Bank* purchases a two-year interest rate cap for afee of 3 percent of notional principal valued at $10 million, withan interest rate ceiling of 11 percent and LIBOR...
- Q A pension plan is obligated to make disbursements of $3 million,$11 million, and $9 million at the end of each of the next threeyears, respectively. The interest rate is 9%...
- Q Baker Industries’ net income is $24000, its interest expense is$6000, and its tax rate is 45%. Its notes payable equals $25000,long-term debt equals $75000, and common equity equals $250000. Thefirm...
- Q Using a 7% annual cost of capital, what is the discountedpayback period in years (round to 2 decimal places) of thepotential project below?Year Cash Flow0 -$5,0001 $1,6092 $1,6933 $1,5584 $1,5455...
- Q 2. A corporate treasurer is looking to invest about $4 millionfor 60 days. Commercialpaper rates are a 3.65% discount and CD rates are 3.66%.a) (0.4’) What is the CP’s bond...
- Q As discussed in the text, in the absence of market imperfectionsand tax effects, we would expect the share price to decline by theamount of the dividend payment when the stock...
- Q Why would someone need to use a call option? Give a scenario ofwhy someone would want to use one. Also, pick a stock that has acall option written on it...
- Q Prepare the cash budget and determine the cash inflows,cash outflows, and the expected change in cash eachmonth.The management estimates total sales for the period January,2019 through June 2019 based on...
- Q Contrail Air, Inc is trying to determine its cost of debt. Thecompany has an outstanding debt issue with 18 years to maturitythat is quoted at 95.00% percent of face value....
- Q Joan Messineo borrowed $10,000 at a 17% annual rate of interestto be repaid over 3 years. The loan is amortized into three equal,annual, end-of-year payments.a. Calculate the annual, end-of-year loan...
- Q Rise Against Corporation is comparing two different capitalstructures, an all-equity plan (Plan I) and a levered plan (PlanII). Under Plan I, the company would have 185,000 shares of stockoutstanding. Under...
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