Finance question and answers for August 06, 2023
- Q 1. What is the Federal Funds Rate, explain theirexistence?2. What are the advantages of putting money into a MoneyMarket Account vs. putting the money in your bankaccount?3. During the recession...
- Q How should the actions of the FED (such as raising interestrates) affect the economy and the stock market? Has this been thecase over the last several years? Why not?
- Q 4.3) General Hospital, a not-for-profit acute care facility, hasestimated the following costs for its inpatient services:Fixed costs$10,000,000 Variable cost per inpatient day $200The hospital expects to have 15,000 inpatient days nextyear.a.What...
- Q ?(Payback ?period, NPV,? PI, and IRR calculations?) You areconsidering a project with an initial cash outlay of ?$90,000 andexpected free cash flows of ?$22,000 at the end of each year...
- Q dividually students will develop a formal response to theproblem(s) posed in the case, addressing the following areas withinthe analysis, and using the same headings. (Numbers in brackets donot necessarily correspond...
- Q The management of Blue Thumb Tools believes the firm’s currentcapital structure is optimal and intends to maintain it in thefuture. Blue Thumb’s bonds are selling for $950 each. Its commonstock...
- Q Suppose the value of the S&P 500 Stock Index is currently$3,350.a. If the one-year T-bill rate is 4.6% and theexpected dividend yield on the S&P 500 is 4.2%, what should...
- Q 1) Exactly five years ago, WSGD Holdings issued20-year bonds with a $1,000 face value. These bonds pay $55 incoupon payment every six months. The bonds currently sell for $950.Due to...
- Q Down Under Boomerang, Inc., is considering a new 3-yearexpansion project that requires an initial fixed asset investmentof $2.29 million. The fixed asset falls into the 3-year MACRS class(MACRS schedule). The...
- Q Staind, Inchas 7 percent coupon bonds on market that have 5years left to maturity.The bonds make annual payments. If YTM onthese bonds is 10 percent, what is current bond price?$930.59...
- Q A financial manager at Textbook Brokers, Inc. has estimated thatit costs $30 to place an order from a major publisher. Further, sheestimates that it costs $0.30 to hold each book....
- Q The monthly income from a piece of commercial property is?$1,400?(paid as a lump sum at the end of the? year). Annual expensesare?$2,000for upkeep of the property and?$900for property taxes. The...
- Q Consider the following information about three stocks: Rate of Return If State Occurs State ofProbability of EconomyState of EconomyStock AStock BStock C Boom.20.26.38.50 Normal.50.10.08.06 Bust.30.01?.20?.40 a-1If your portfolio is invested 30 percent each in A and B...
- Q Compute the payback statistic for Project A if the appropriatecost of capital is 8 percent and the maximum allowable paybackperiod is four years. (Round your answer to 2 decimalplaces.)Project ATime:012345Cash...
- Q Answer the following question in your own words. Your answermust have a 150 minimum word count:Describe the difference between financial accounting andmanagerial accounting. Give examples of the uses of each...
- Q Hospitality Hotels forecasts monthly labor needs.(a) Given the following monthly labor figures, make a forecast forJune using a three-period moving average and a five-period movingaverage. (Round answers to 2 decimal...
- Q The Bigbee Bottling Company is contemplating the replacement ofone of its bottling machines with a newer and more efficient one.The old machine has a book value of $550,000 and a...
- Q On January 1, you enter a long gold futures contract at thesettle price of 1250/oz. Each gold contract is for 100 ounces. Theminimum margin requirement is $5500, and the maintenance...
- Q Answer the following question in your own words. Your answermust have a 150 minimum word count:Explain the difference between fixed costs and variable costs.Describe their significance and give examples of...
- Q Answer the following question in your own words. Your answermust have a 150 minimum word count:Describe the differences between top-down and bottom-upbudgeting.
- Q Suppose that the current 1-year rate (1-year spot rate) andexpected 1-year T-bill rates over the following three years (i.e.,years 2, 3, and 4, respectively) are as follows:1R1 = 3.26%,E(2r1) =...
- Q Answer the following question in your own words. Your answermust have a 150 minimum word count:Define budgeting and describe its primary purposes and benefitsto an organization.
- Q Answer the following question in your own words. Your answermust have a 150 minimum word count:Describe the three (3) primary methods of cost allocation anddescribe how they differ.
- Q Two assets' correlation is -0.8. The first has expected returnof 9% and standard deviation of 16%, the second has expected returnof 13% and standard deviation of 20%.Calculate the minimum amount...
- Q As with most bonds, consider a bond with a face value of $1,000.The bond's maturity is 22 years, the coupon rate is 10% paidsemiannually, and the discount rate is 14%.What...
- Q Aria Acoustics, Inc. (AAI), projects unit sales for a newseven-octave voice emulation implant as follows:YearUnit Sales177,000290,0003110,0004103,000569,300Production of the implants will require $2,500,000 in networking capital to start and additional net...
- Q 8 A firm paid total cash dividends of $119 and had net income of$217 in 2008.If it earned $328 in 2009 and maintained the same dividendpayout ratio that it paid...
- Q Some recent financial statements for Smolira Golf Corp. follow.SMOLIRA GOLF CORP. 2017 and 2018 Balance Sheets Assets Liabilitiesand Owners’ Equity 2017 2018 2017 2018 Current assets Currentliabilities Cash $ 34,885...
- Q Mutually exclusive investments.The following are cash flows of two projects.Year Project A Project B0 $ (200) $ (200)1 80 1002 80 1003 80 1004 80Calculate the NPV for both projects if...
- Q Metallica Bearings, Inc., is a young start-up company. Nodividends will be paid on the stock over the next nine yearsbecause the firm needs to plow back its earnings to fuel...
- Q How should companies respond to government request to breaktheir own security systems. Apple has had numerous requests fromlaw enforcement to break into iPhones confiscated in criminal andterrorism cases. Can Apple...
- Q Consider the following information on Stocks I and II:State of EconomyProbability ofState of EconomyRate of Return if State OccursStock IStock IIRecession.22.055?.27Normal.67.355.19Irrational exuberance.11.215.47The market risk premium is 11.7 percent, and the...
- Q LONG-TERM FINANCING NEEDED At year-end 2018, total assets forArrington Inc. were $1.8 million and accounts payable were$450,000. Sales, which in 2018 were $3.0 million, are expected toincrease by 25% in...
- Q MIRR unequal lives. Singing Fish Fine Foods has ?$2 comma 020comma 000 for capital investments this year and is considering twopotential projects for the funds. Project 1 is updating the?store's...
- Q A proposed cost-saving device has an installed cost of $790,000.The device will be used in a five-year project but is classified asthree-year MACRS property for tax purposes. The required initialnet...
- Q Red Sun Rising just paid a dividend of $2.49 per share. The companysaid that it will increase the dividend by 25 percent and 20 overthe next two years, respectively. After...
- Q A project will generate annual cash flows of $237,600 for eachof the next three years, and a cash flow of $274,800 during thefourth year. The initial cost of the project...
- Q Determinants of Interest Rate for Individual Securities You areconsidering an investment in 30-year bonds issued by a corporation.The bonds have no special covenants. The Wall Street Journalreports that 1-year T-bills...
- Q Describe the three business activities of financing, investingand operating.-----------------------------------------------------------------------------------------------------------------------Write a two-page paper describing the financing, investing, andoperating activities of a business. You might find it easier topick a business of...
- Q Martin Enterprises needs someone to supply it with 117,000cartons of machine screws per year to support its manufacturingneeds over the next five years, and you’ve decided to bid on thecontract....
- Q Write a one page summary about the following paper:The theory and practice of corporate finance: evidence from thefieldby John R. Grahamand Campbell R. Harvey
- Q Consider a project to supply 107 million postage stamps per yearto the U.S. Postal Service for the next five years. You have anidle parcel of land available that cost $1,740,000...
- Q To solve the bid price problem presented in the text, we set theproject NPV equal to zero and found the required price using thedefinition of OCF. Thus the bid price...
- Q Some income or expense transactions are unusual and do notreflect the normal business of the company. These are captured inan Other (unusual income or expenses) line (or something similarlylabeled) in...
- Q Happy Times, Inc., wants to expand its party stores into theSoutheast. In order to establish an immediate presence in the area,the company is considering the purchase of the privately held...
- Q Your firm is contemplating the purchase of a new $585,000computer-based order entry system. The system will be depreciatedstraight-line to zero over its five-year life. It will be worth$95,000 at the...
- Q The 10?-year ?$1,000 par bonds of Vail Inc. pay 14 percentinterest. The? market's required yield to maturity on a?comparable-risk bond is 17 percent. The current market price forthe bond is...
- Q Part a. Green Tree Corporation is paying a dividend of $4 today.It expects dividends to grow at 25 percent for the next three yearsand to stabilize at 10 percent per...
- Q A? state-sponsored Forest Management Bureau is evaluatingalternative routes for a new road into a formerly inaccessibleregion. Three mutually exclusive plans for routing the road providedifferent? benefits, as indicated in table...
- Q Go-Figure, Inc.*The actual company name and product has beendisguised.Go-Figure, a newly formed corporation, has developed aproprietary circuit board inspection system that offers ahigh-speed way to inspect boards for defects. Data...
- Q 1.Which of the following statements is (are) correct?(x)A stockcan provide a return by paying a dividend, increasing in value orby some combination of the two.(y)A change in the ability ofcompany...
- Q Suppose you have been hired as a financial consultant to DefenseElectronics, Inc. (DEI), a large, publicly traded firm that is themarket share leader in radar detection systems (RDSs). The companyis...
- Q Some recent financial statements for Smolira Golf Corp. follow.SMOLIRA GOLF CORP. 2017 and 2018 Balance Sheets Assets Liabilitiesand Owners’ Equity 2017 2018 2017 2018 Current assets Currentliabilities Cash $ 23,056...
- Q Pybus, Inc. is considering issuing bonds that will mature in 21years with an annual coupon rate of 11 percent. Their par valuewill be ?$1,000?, and the interest will be paid...
- Q 1- Abner? Corporation's bonds mature in 19 years and pay 8percent interest annually. If you purchase the bonds for ?$1,075?,what is your yield to? maturity?Your yield to maturity on the...
- Q The 18?-year, ?$1,000 par value bonds of Waco Industries pay 7percent interest annually. The market price of the bond is ?$925?,and the? market's required yield to maturity on a? comparable-riskbond...
- Q 1. Juliet has a 10-year mortgage of $500,000 with an interestrate of 3.5% APR, compounded quarterly. Mortgage payments are madeat the beginning of each month. What is the balance remaining...
- Q A bond that matures in 12 years has a $1,000 par value. Theannual coupon interest rate is 11 percent and the market's requiredyield to maturity on a comparable-risk bond is...
- Q The essence of chapter 7 (Birgham 2020) and establishing the valueof a stock is that company has the ability to generate free cashflow, or it has the potential to generate...
- Q 2. James and Sky owe $24,000 on their student loans at aninterest rate of 6.5%. The term is 20 years. Find their monthlypayment.3. Construct the first row of the amortization...
- Q Compute the interest paid on a 3-year lease for a $29,767 car ifthe annual rate of depreciation is 19% and the lease's annualinterest rate is 3.6%.Round your answer to the...
- Q Consider a hypothetical futures contract in which the currentprice is $82. The initial margin requirement is $5, and themaintenance margin requirement is $2. You go long 20 contracts andmeet all...
- Q 1. The Additional Funds Needed(AFN) equationCold Duck Manufacturing Inc. has the following end-of-yearbalance sheet:Cold Duck Manufacturing Inc. Balance Sheet For the YearEnded on December 31AssetsLiabilitiesCurrent Assets:Current Liabilities:Cash and equivalents$150,000Accounts payable$250,000Accounts...
- Q 3. Excess capacityadjustmentsWater and Power Co. (W&P) had sales of $1,400,000 last yearon fixed assets of $330,000. Given that W&P’s fixed assets werebeing used at only 93% of capacity, then...
- Q 1- Calculate the value of a bond that matures in 16 years andhas a $ 1,000 par value. The annual coupon interest rate is 16percent and the? market's required yield...
- Q Fingen's 11?-year, ?$1, 000 par value bonds pay 12 percentinterest annually. The market price of the bonds is ?$1,090 andthe? market's required yield to maturity on a? comparable-risk bondis 9...
- Q You must evaluate the purchase of a proposed spectrometer forthe R&D department. The base price is $280,000, and it wouldcost another $42,000 to modify the equipment for special use by...
- Q Suppose the yield curve shows 1 year rates at 5%, 2 year ratesat 10% and 3 year rates at 15%. What is the price of a bond with a$1000 par...
- Q Question 5 – Explain capital budgeting in your own words.Explain one capital budgeting method in detail and how OrganicProduce Corporation’s weighted average cost of capital affectscapital budgeting decisions.
- Q Consider the following data for a clinical laboratory:ActivityAnnual CostsCost DriverTest ATest BTest CTest DTotal UnitsAllocationReceive specimen$ 10,000Number of tests2,0001,5001,0005005,000$ 2.00Equipment set-up 25,000Number of minutes per test55101030$ 833.33Run test 100,000Number of minutes per test15102036$ 2,777.78Record results 10,000Number...
- Q In your own words explain what working capital management is andgive an example of one way Organic Produce Corporation’s financialmanagers could improve the company’s working capital position.
- Q What do you think Ferrari is worth in Euros? Justify yourrecommendation based on current market multiples valuation and aDCF valuation.201220132014First Half 2015SalesCars and Spare Parts (1)1,6951,6551,9441,007Engines (2)77188311121Sponsorship, Commercial and Brand...
- Q A bank has issued a six-month, $2.6 million negotiable CD with a0.46 percent quoted annual interest rate (iCD,sp).a. Calculate the bond equivalent yield and theEAR on the CD.b. How much...
- Q I want a professionally presented and well-organizeddocument.The Edmonton Fabricating Company (EFC) manufactures snowblowers. EFC is investigating the feasibility of a new line ofcordless snow blower. The new manufacturing equipment to...
- Q You have just purchased a four-month, $600,000 negotiable CD,which will pay a 7.5 percent annual interest rate.a. If the market rate on the CD rises to 8percent, what is its...
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