Finance question and answers for August 03, 2023
- Q Prepare the business plan financial analysis for creating aphysiotherapy and rehabilitation center (containing 10 beds)?
- Q You are evaluating two different silicon wafer milling machines.The Techron I costs $246,000, has a 3-year life, and has pretaxoperating costs of $65,000 per year. The Techron II costs $430,000,has...
- Q You are set to receive an annual payment of 10600 per year forthe next 12 years. Assume the interest rate is 5.5 percent. Howmuch more are the payments worth if...
- Q Binomial Model and Option PricingThe shares of XYZ Inc. are currently selling for $120 per share.The shares are expected to go up by 10 percent or down by 5 percentin...
- Q The Crunchy Granola Company is a diversified food company thatspecializes in all natural foods. The company has three operatingdivisions organized as investment centers. Condensed data takenfrom the records of the...
- Q Three different stock valuation techniques are presented; thedividend growth model, the free cash flow model, the marketmultiple model. While none of these is the most appropriate forevery single company, each...
- Q Assume a major investment service has just given Big Lake Realtyits highest investment? rating, along with a strong buyrecommendation. As a? result, you decide to take a look foryourself and...
- Q Consider a five-year, 8 percent annual coupon bond selling atpar of $1,000.a. What is the duration of this bond?b. If interest rates increase by 20 basis points, what is theapproximate...
- Q The Bert Corp. and Ernie, Inc., have both announced IPOs. Youplace an order for 1,150 shares of each IPO. One of the IPOs isunderpriced by $18.00 and the other is...
- Q (Compound value?) Stanford? Simmons, who recently sold his?Porsche, placed ?$8,400 in a savings account paying annual compoundinterest of 7 percent.a. Calculate the amount of money that will have accrued if...
- Q Bellinger Industries is considering two projects for inclusionin its capital budget, and you have been asked to do the analysis.Both projects' after-tax cash flows are shown on the time linebelow....
- Q McConnell Corporation has bonds on the market with 10.5 years tomaturity, a YTM of 7.1 percent, a par value of $1,000, and acurrent price of $1,051. The bonds make semiannual...
- Q Your company doesn't face any taxes and has $501 million inassets, currently financed entirely with equity. Equity is worth$40.10 per share, and book value of equity is equal to market...
- Q Provide detailed business plan establishment costs for aphysiotherapy and rehabilitation center (containing 10 beds)
- Q Assume the return on a market index represents the common factorand all stocks in the economy have a beta of 1. Firm-specificreturns all have a standard deviation of 50%.Suppose an...
- Q 4. Stock A has a beta of 1.3, Stock B has a beta of0.8, the expected rate of return on an average stock is 11%, andthe risk-free rate of return...
- Q ?(Compound interest?) To what amount will the followinginvestments? accumulate?a. ?$4,900 invested for 10 years at 10 percent compoundedannually.b. ?$8,200 invested for 8 years at 9 percent compoundedannually.c. ?$785 invested for...
- Q An asset costs $690,000 and will be depreciated in astraight-line manner over its three-year life. It will have nosalvage value. The lessor can borrow at 5.2 percent and the lesseecan...
- Q John and Jane Brown have been living at their present home forthe past 6 years. During that time, they have replaced the waterheater for $375, have replaced the dishwasher for...
- Q (Evaluating profitability?) Last? year, Stevens Inc. had salesof ?$398,000?, with a cost of goods sold of ?$110,000. The? firm'soperating expenses were $134,000?, and its increase in retainedearnings was ?$57,000. There...
- Q A pension fund manager is considering three mutual funds. Thefirst is a stock fund, the second is a long-term government andcorporate bond fund, and the third is a T-bill money...
- Q 2. A bond has 10 years to maturity, a 7.8% annualcoupon rate, and sells for $985. Assume coupon payments are made semi-annually. (3 points) a. What is thecurrent yield for this...
- Q You decide to buy 100 shares of Chevron (CVX) in a marginaccount that has an initial margin of 50%. CVX pays an annualdividend of $4 a share and the stock...
- Q Write the thesis proposal in "Effec of CSR on financialperformance of companies "?
- Q Stern Associates is considering a project that has the followingcash flow data. What is the project's payback? Show Work!Year012345Cash flows-$1,000$400$410$420$430$440
- Q You have found a mutual fund that you would like to invest inthat will earn 5% annually. If you invest $1000 each year for thenext 10 years, how much will...
- Q What is the yield to maturity on a 10-year, 9% annual coupon,$1,000 par value bond that sells for $887.00? That sells for$1,134.20? What does the fact that a bond sells...
- Q Metallica Bearings, Inc., is a young start-up company. Nodividends will be paid on the stock over the next 10 years becausethe firm needs to plow back its earnings to fuel...
- Q • Prompt: Federal Reserve Bank, U.S. Banking System, andFractional Reserve System. Please write a paper that discusses therole of the Federal Reserve Bank in the U.S. banking system.Describe the Fractional...
- Q In the period since the financial crisis of 2007-2009, inflationhas been low in many countries, while a few experienced outrightdeflation. Why might unexpected deflation be of particular concernto someone managing...
- Q (400 words required this sucject ishospitality accounting Please write clear your ownthought or search the internet. Thank you!)this is all the requestmentsDiscuss the 4 methods of depreciation. Which method is...
- Q Financial ratios are essential to assessing to provide anaccurate valuation of a firm. Select a publicly-traded firm of yourchoice. You may use the firm you have elected to profile for...
- Q 5. There are two kinds of third-party payers; privateinsurers or public insurers. Describe the two and give examples ofeach.7. Understand the similarities and differences betweendifferent reimbursement methods, such as fee-for-servicereimbursement...
- Q ALei Industries has credit sales of $151 million a year. ?ALei's management reviewed its credit policy and decided that itwants to maintain an average collection period of 40 days.a.??What is...
- Q A firm hasNet income- $195,000Profit Margin- 10.0%Accounts Receivable- $100,000Percent of Sales On Credit- 85%Fill out the rest of the information below, show all work andcalculationsSales-?Credit Sales-?Receivables Turnover- ? TimesDays sales...
- Q 8. Keller Construction is considering two new investments.Project E calls for the purchase of earthmoving equipment. ProjectH represents an investment in a hydraulic lift. Keller wishes touse a net present...
- Q Last year Hamdi Corp. had sales of $500,000, operating costs of$450,000, and year-end assets (which is equal to its total investedcapital) of $385,000. The debt-to-total-capital ratio was 17%, theinterest rate...
- Q A semi-annual corporate bond has a coupon rate of 9percent per year. The face value is $1,000. The market interestrate (yield to maturity) for this bond today is 10.5 percent....
- Q Bankruptcy costs are a disincentive to debt financing.
- Q a)Mrs Lee wants to set up a saving plan for her daughter’suniversity education. She makes deposits of $500 at the beginningof every 6 months, starting on her daughter’s 2nd birthday...
- Q The SEC recently filed charges in a fraud case againstreal-estate developer Robert C. Morgan.The SEC alleges that Morgan operated a Ponzi Scheme. Describethe scheme alleged by the SEC and how...
- Q Your company is considering the purchase of a fleet of cars for$200,000. It can borrow at 6%. The cars will be used for fouryears. At the end of four years...
- Q 1. David Puddy is hopingto purchase a nice new car for $30,000 in two years. At that timehe plans on taking out a 5-year loan with monthly payments and anAPR...
- Q Island Hotels, Inc. (IHI) forecasts that its free cash flow inthe coming year, i.e., at t = 1, will be -$7 million (negative),but then its FCF will turn positive. At...
- Q A local company presented you with the following financial data:A & B firm reported that its sales for 2018 was $125,000 withtotal costs of $100,000 and there was no taxes....
- Q Helsinki Co. is considering a new project that will cost$328,500. The expected net cash inflows from this project are$62,000 per year for 8 years. If Helsinki’s weighted average costof capital...
- Q You have stated several reasons as to why a company could havenegative cash flows. Many start-up companies experienced negativecash flows during the first few years of their operations. Wouldyou invest...
- Q 12.Preston invested $19,750 in the stock market three years agowith hopes that it would grow to $40,000in eightyears. Today theinvestment is valued at $23,286. From this point forward, whatannual return...
- Q Campbell's father holds just one stock, East Coast Bank (ECB),which he thinks is a very low-risk security. Campbell agrees thatthe stock is relatively safe, but he wants to demonstrate that...
- Q What risks does a car company face? How can we limit theserisks?
- Q XYZ Corporation, an Australian based carmaker, is considering anexpansion into Asia after its expansion into the US last summer washighly successful. Currently, XYZ does export cars to Asia, but theincreased...
- Q Anderson Associates is considering two mutually exclusiveprojects that have the following cash flows: Project A Project BYear Cash Flow Cash Flow0 -$11,000 -$9,0001 4,500 6,0002 3,000 4,0003 5,000 3,0004 9,000...
- Q The following information pertains to Fairways Driving Range,Inc.:The company is considering operating a new driving rangefacility in Sanford, FL. In order to do so, they will need topurchase a ball...
- Q Newman plans to retire in 25 years andplans to withdraw end of the year payments in the amount of $85,000from hisretirement account to allow him to enjoy the same standard...
- Q The expected pretax return on three stocks is divided betweendividends and capital gains in the following way: Stock ExpectedDividend Expected Capital Gain A $0 $10 B 5 5 C 10...
- Q Consider the mutually exclusive alternatives given in the tablebelow. MARR is 5 % per year. Assuming repeatability, what is theequivalent annual worth of the most profitable alternative? (Do notenter the...
- Q Explain the following economic relationships: interest rates andstock prices; money supply and excess liquidity and stock price;government budget deficit and interest rates; government budgetdeficit and stock price; $ and trade...
- Q Matterhorn Mountain Gear is evaluating two projects with thefollowing cash flows:yearproject xproject y0-319,400-299,0501146,100137,3002163,600154,5003128,700120,250What interest rate will make the NPV for the projects equal?a)14.22%b)18.31%c)12.64%d).26%e)18.05%
- Q A firm with a 14% WACC is evaluating two projects for this yearscapital budget. After tax cash flows, including depreciation, areas follows:0 1 2 3 4 5Project M -$30,000 $10,000...
- Q What is the payback period for the following set of cashflows? YearCash Flow0?$ 4,200 12,500 22,600 32,600 41,900
- Q Which of the following is true for a 5-year project with a3-year payback period?The net present value is negative.The net present value is zero.Initial screening reveals this to be an...
- Q For a new project of a company to increase the manufacturingcapacity for five years, it will purchase new equipment for$1,500,000 and be housed in a building purchased eight years agofor...
- Q You just started your first full time job out of college. Yourecall from your finance course the importance of starting to saveearly for retirement. You plan on making deposits of...
- Q 18. If a not-for-profit clinic has $70,000 in assets and$40,000 in liabilities, what is their equity balance?12. What are the differences between the incomestatement and balance sheet in regard to...
- Q Explain briefly how each of the following transactions wouldaffect a company’s balance sheet. Remember, assets must equalliabilities plus owners’ equity before and after thetransaction.a) Sale of used equipment with a...
- Q (Bond valuation?) You are examining three bonds with a par valueof ?$1,000 ?(you receive ?$1,000 at? maturity) and are concernedwith what would happen to their market value if interest rates?...
- Q The current price of Gringotts Bank Corporation is $50. Theprice will increase by 40% or fall by 35% during each of the nexttwo years. The company will pay a $9...
- Q (Bond valuation?) You own a 10?-year, ?$1,000 par value bondpaying 6.5 percent interest annually. The market price of the bondis ?$925?, and your required rate of return is 9 percent.a....
- Q Consider the following variance-covariance matrixrmrArBrCrDrM0.41rA0.430.65rB0.490.390.84rC0.300.130.300.58rD0.500.430.610.341.48Average returnrMrArBrCrDRaverage return0.05850.11220.03140.0525-0.05630.03a. if you would like to create a risky protfolio X of two stocks- stock A and stock C, how would you allocate your...
- Q A specialized automatic machine costs $100,000 and is expectedto save $19,700 per year while in operation. Using a 5 % interestrate, what is the discounted payback period (in years).
- Q Discuss the major differences between the cost of capital for adomestic firm compared to an MNC. Should an MNC have a lower orhigher cost of capital than their domestic counterpart?
- Q In Chapter 7 three different stock valuation techniques arepresented; the dividend growth model, the free cash flow model, themarket multiple model. While none of these is the most appropriatefor every...
- Q Financial? ratios: Liquidity. The financialstatements for Tyler? Toys, Inc. are shown below. Calculate thecurrent? ratio, quick? ratio, and cash ratio for Tyler Toys for2013 and 2014. Should any of these...
- Q Financial? ratios: Financial leverage. Thefinancial statements for Tyler? Toys, Inc. are shown below.Calculate the debt? ratio, times interest earned? ratio, and cashcoverage ratio for 2013 and 2014 for Tyler Toys....
- Q Suppose you purchase a $1,000 TIPS on January 1, 2016. The bondcarries a fixed coupon of 1 percent. Over the first two years,semiannual inflation is 2 percent, 2 percent, 4...
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