Finance question and answers for August 07, 2023
- Q Triad Corporation has established a joint venture with TobaccoRoad Construction, Inc., to build a toll road in North Carolina.The initial investment in paving equipment is $197 million. Theequipment will be...
- Q Rossdale Co. stock currently sells for $68.91 per share and hasa beta of .88. The market risk premium is 7.10 percent and therisk-free rate is 2.91 percent annually. The company...
- Q 1. Zu car rental corporation is trying to determine whether toadd 25 cars to its fleet. The company fully depreciates all itsrental cars over 5 years using the straight line...
- Q Assume the managers of the Fort Winton Hospital are setting theprice on a new outpatient service. Here are the relevant dataestimates:Variable cost per visit $5.000Annual direct fixed costs $500,000Annual overhead...
- Q Gateway Tours is choosing between two bus models. One is moreexpensive to purchase and maintain but lasts much longer than theother.? Gateway's discount rate is 11.1 %. The company plans...
- Q You have just completed a $ 20 comma 000 feasibility study for anew coffee shop in some retail space you own. You bought the spacetwo years ago for $ 103...
- Q A stock is trading for 15, and just paid a dividend of 0.8 whichis expected to grow at a fraction 0.08 per year. If Goldman Sacscharges a fraction 0.10 as...
- Q Would you make any changes to Warren Buffet's investmentstrategy? Why or why not?
- Q Suppose a U.S. investor wishes to invest in a British firmcurrently selling for £40 per share. The investor has $12,000 toinvest, and the current exchange rate is $2/£. Consider threepossible...
- Q Pybus, Inc is considering issuing bonds that will mature in 18years with an annual coupon rate of 6%. Their par value will be$1,000 and the interest will be paid semiannually....
- Q Value Added Inc. Buy $ 21 million of Sow's ears at the beginningof January but doesn't pay immediately the bill in March itprocesses the ears into silk purses, which it...
- Q Financial statements are based on generally accepted accountingprinciples (GAAP) and are audited by CPA firms. Do investors needto worry about the validity of those statements?
- Q Ms. Xie, who is in the 37 percent tax bracket, is the soleshareholder and president of Xenon. The corporation’s financialrecords show the following:Gross income from sales of goods$1,590,000Operating expenses(930,000)Salary paid...
- Q You are given the following information for Huntington Power Co.Assume the company’s tax rate is 25 percent. Debt: 22,000 5 percentcoupon bonds outstanding, $2,000 par value, 25 years to maturity,selling...
- Q Jolie Foster Care Homes Inc. shows the following data: YearNet IncomeTotalAssetsStockholders'EquityTotal Debt20X1$155,000$2,390,000$761,000$1,629,00020X2191,0002,700,000966,0001,734,00020X3208,0002,730,0001,770,000960,00020X4192,0002,470,0002,220,000250,000Compute the ratio of net income to total assets for each year.(round to 2 decimal place)Year Return on Assets20X1 %20X2...
- Q Both a call and a put currently are traded on stock XYZ; bothhave strike prices of $50 and expirations of 6 months.a. What will be the profit to an investor...
- Q You will be receiving $25,000 at the end of each year for thenext 20 years. If the correct discount rate for such a stream ofcash flows is 10% then what...
- Q Calculate the double-declining balance depreciation schedule fora $1,000 item that will last four years. What is the estimatedsalvage value?
- Q Present value with periodicrates.??Sam? Hinds, a local? dentist, is going to remodel the dentalreception area and add two new workstations. He has contacted?A-Dec, and the new equipment and cabinetry will...
- Q Even though most corporate bonds in the United States makecoupon payments semiannually, bonds issued elsewhere often haveannual coupon payments. Suppose a German company issues a bond witha par value of?...
- Q Oregon Forest Products will acquire new equipment that fallsunder the five-year MACRS category. The cost is $300,000. If theequipment is purchased, the following earnings before depreciationand taxes will be generated...
- Q Professor’s Annuity Corp. offers a lifetime annuity to retiringprofessors. For a payment of $70,000 at age 65, the firm will paythe retiring professor $350 a month until death.a.If the professor’s...
- Q Consider a 4-year amortizing loan. You borrow $2,700 initiallyand repay it in four equal annual year-end payments.a.If the interest rate is 10%, what is the annual payment?(Do not round intermediate...
- Q 1. Oscar Inc. has a new product priced at $500 per unit.Variable cost is $250 per unit, and fixed costs are $200,000 peryear. Quantity sold is expected to be 20,000...
- Q What is the present value of a $15 million pool of 30-yearmortgages with an 10.5 percent per year monthly mortgage coupon ifmarket rates are 7 percent? The GNMA guarantee fee...
- Q Pressure was put on managers to keep variances under control orto set very high performance standards. Discuss how these practicesmay lead to ethical issues such as lower quality end products...
- Q A bond that matures in 17 years has a ?$1000 par value. Theannual coupon interest rate is 11 percent and the? market'srequired yield to maturity on a? comparable-risk bond is...
- Q what are 4 business plan models.compare and contrast.
- Q Suppose on March 1 you take a long position in a June crude oilfutures contract at $50/barrel (contract size = 1,000 barrels) .How much cash or risk?free securities would you...
- Q Owen’s Electronics has nine operating plants in sevensouthwestern states. Sales for last year were $100 million, and thebalance sheet at year-end is similar in percentage of sales to thatof previous...
- Q The stock of Sedly Inc. is expected to paythe followingdividends. Dividends: Year 1: $2.25 year 2: $3.60 year 3: $1.70 .year 4: $2.00 At the end of the fourth year...
- Q Fred Tibbits has made a detailed study of the denim clothingindustry. He's particularly interested in a company called DenhartFashions that makes stylish denim apparel for children andteenagers. Fred has done...
- Q ?(Evaluating profitability?) The Malia Corporation had sales in2015 of $63 ?million, total assets of $45 million, and totalliabilities of $25 million. The interest rate on the? company'sdebt is6.4 percent and...
- Q United Technical, Inc. (UT), a manufacturer of batteries used inautos. It has much of its own equipment in its own manufacturingfacility. UT, however, relies heavily on components from a firm...
- Q Different cash flow.??Given the following cash inflow at the endof each? year, what is the future value of this cash flow at 3 %?,8 %?, and 16?% interest rates at...
- Q Define the following pairs of terms and explain thesimilarity, difference or relationship between theterms:Expenditure changing and switching policiesGold standard and gold exchange standard
- Q Preston Woods has 17,500 shares of stock outstanding along with$408,000 of interest-bearing debt. The market and book values ofthe debt are the same. The firm has sales of $697,000 and...
- Q You are given the following information concerning ParrotheadEnterprises:Debt:9,700 7.2 percent coupon bonds outstanding, with 23 years tomaturity and a quoted price of 105.75. These bonds pay interestsemiannually.Common stock:260,000 shares of...
- Q Discuss the concept ofReplacement Cost Coverage for Homeowners Policies, the danger thatmany homeowners face with replacement cost coverage and the resultif a homeowner does not carry enough coverage.
- Q Information on Gerken Power Co., is shown below. Assume thecompany’s tax rate is 40 percent.Debt:8,900 8.2 percent coupon bonds outstanding, $1,000 par value, 21years to maturity, selling for 103 percent...
- Q Winston Clinic is evaluating a project that costs $50,000 andhas expected net cash inflows of $12,000 per year for eight years.The first inflow occurs one year after the cost outflow,...
- Q Thomson Media is considering some new equipment whose data areshown below. The equipment has a 3-year tax life and would be fullydepreciated by the straight-line method over 3 years, but...
- Q Different cash flow.??Given the following cash? inflow, what isthe present value of this cash flow at 8 %?, 12 %?, and 26?%discount? rates?Year? 1: ?$3,000Year? 2: ?$5,000Years 3 through? 7:...
- Q The director of capital budgeting for Big Sky Health System,Inc. has estimated the following cash flows for a new service andhas a cost of capital of 8%. What is the...
- Q New-Project Analysis The Campbell Company is considering addinga robotic paint sprayer to its production line. The sprayer's baseprice is $810,000, and it would cost another $24,500 to install it.The machine...
- Q Scenario: Jim Logan, the owner of an American based smallbusiness, Sports Exports, Inc., specializes in exporting footballsto Great Britain. In return, he receives payments in British poundsevery month which need...
- Q I have been assigned a 3 page research paper into "activeinvestment strategy" versus "passive investment strategy".Our course's textbook has no direct mention of either aftersearching exhaustively, which means the research...
- Q Why is it important for a firm to know how to determine theircost of capital?
- Q ??(Future value of an ordinary? annuity)??You are graduatingfrom college at the end of this semester and after reading the TheBusiness of Life box in this? chapter, you have decided to...
- Q your company has been approached to bid on a contract to sell5,050 voice recognition (VR) computer keyboards a year for fouryears. Due to thehnical improvements, beyond that time they will...
- Q ???(Bond valuation) A bond that matures in 11 years has a?$1,000 par value. The annual coupon interest rate is 8 percent andthe? market's required yield to maturity on a? comparable-risk...
- Q Suppose a firm wants to expand and will need to take onconsiderable debt to increase its operations. The firm is veryconcerned about the effect of financial distress costs on the...
- Q 1. The target capital structure for a firm is 40% common stock,10% preferred stock and 50% debt. If the cost of common equity is18%, the cost of preferred stock is...
- Q Marcel Co. is growing quickly. Dividends are expected to grow ata rate of 0.20 for the next 4 years, with the growth rate fallingoff to a constant 0.01 thereafter. If...
- Q Hello!If possible, could you provide how and in excel? I'm stuck andtrying to learn so I can do well on the exam!A 20-year annuity pays $2,350 per month at the...
- Q You plan to borrow ?$50000 from the bank to pay for inventoriesfor a gift shop you have just opened. The bank offers to lend youthe money at 9 percent annual...
- Q On January? 20, Metropolitan Inc. sold 8 million shares of stockin an SEO. The market price of Metropolitan at the time was $ 41.50per share. Of the 8 million shares?...
- Q Last year, Stewart-Stern Inc. reported $11,250 of sales, $4,500of operating costs other than depreciation, and $1,250 ofdepreciation. The company had $3,500 of bonds outstanding thatcarry a 6.50% interest rate, and...
- Q In 200 words describe liquidityratios or profitability ratios and how are theyimportant?
- Q ABC Products needs to replace its rawhide tanning and moldingequipment. It can be used for five years and will have no salvagevalue. The equipment costs $930,000. The firm can lease...
- 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 you borrow $2,000 to buy a new car at 12% interest how much areyou monthly payments if you plan to pay the auto in three years
- Q Florida Enterprises, Inc. is considering a new project whosedata are shown below. The equipment that will be used has a 3-yearclass life and will be depreciated by the MACRS depreciationsystem....
- Q There are importance and effects of dividend buyback decisions.Does the stock market appear to reward high-dividend payout? Whatabout low-dividend payout? Does it matter what type of investorowns the shares? What...
- Q Given that preference shares have an expected dividend stream of20 cents in perpetuity and that the current market price(cum-dividend) of the preference shares is $2.40, calculate thecost of capital(kp) of...
- Q What unethical sales practices have been identified in theCaribbean or globally and how are these being addressed byregulators and financial institutions?
- Q Computech Corporation is expanding rapidly and currently needsto retain all of its earnings; hence, it does not pay dividends.However, investors expect Computech to begin paying dividends,beginning with a dividend of...
- 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 $23.50 per share; itslast dividend was $2.50;...
- Q Assume that security returns are generated by the single-indexmodel,Ri = ?i +?iRM + eiwhere Ri is the excess return for securityi and RM is the market’s excessreturn. The risk-free rate...
- Q Discuss the difference between life insurance and non-lifeinsurance companies with regard to the certainty of timing andamount of cash outflows (i.e., which company’s cash outflow is morepredictable in terms of...
- Q if you invest $20 in a savings account tha pays 5% interest howmuch money will you have in 4 years if you make no additionaldeposits
- Q Based on the MIRR of the following project, using theReinvestment approach and a discount rate of 13.38 percent, shouldthe project be accepted? Answer 1 if Yes and 0 ifNo.YearCash Flow0$-911261$476832$435123$696014$-44473
- Q COMMON STOCK Issuance and TREASURY STOCK QuestionThe Cajun Fishing Company (“CAJUN FISH” as it was known) of StBernard’s Parish has been extremely successful since the BP oilspill. After that spill,...
- Q Bo's Home Manufacturing has 290,000 shares outstanding that sellfor $44.10 per share. The company has announced that it willrepurchase $49,000 of its stock. What will the share price be afterthe...
- Q This question has 3 parts each worth 10 point. This question isrelated to the monetary policy.i) (10 points) What is the difference between a stimulativemonetary policy and a restrictive monetary...
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