Finance question and answers for August 09, 2023
- Q Financial information for Powell Panther Corporation is shownbelow: Powell Panther Corporation: Income Statements for YearEnding December 31 (Millions of Dollars) 2016 2015 Sales $1,680.0$1,400.0 Operating costs excluding depreciation and amortization1,344.0...
- Q Abe, Beth, Charles, and David have decided to invest in rarecoins. A dealer has oered to sell them a parcel containing 100identical coins for $10, 000. Each person invests all...
- Q Plaid Pants, Inc. common stock has a beta of 0.90, while AcmeDynamite Company common stock has a beta of 1.80. The expectedreturn on the market is 10 percent, and the...
- Q 1. Use the following information provided and the answers to thequestions below to predict what the weighted average cost ofcapital might be in the future. Then, use the WACC to...
- Q Discuss, with examples, how the market interest rates affect thevalue of bonds.
- Q Required Lump-SumPaymentTo complete your lastyear in business school and then go through law school, you willneed $20,000 per year for 4 years, starting next year (that is, youwill need to...
- Q Rentz Corporation is investigating the optimal level of currentassets for the coming year. Management expects sales to increase toapproximately $4 million as a result of an asset expansionpresently being undertaken....
- Q Parramore Corp has $14 million of sales, $2 million ofinventories, $2 million of receivables, and $2 million of payables.Its cost of goods sold is 70% of sales, and it finances...
- Q 17.Mr. Thomas has $210 income this year and $180 income next year.The market interest rate is 5% per year. Mr. Thomas also has aninvestment opportunity in which he can invest...
- Q Tall Oaks Corp. is considering a new machine that requires aninitial investment of $480,000 installed, and has a useful life of8 years. The expected annual after-tax cash flows for the...
- Q ?(Bond valuation?) You own a bond that pays ?$100 in annual?interest, with a ?$1,000 par value. It matures in 20 years. Yourrequired rate of return is 12 percent.a. Calculate the...
- Q Riverside Bank offers to lend you $50,000 at a nominal rate of6.5%, compounded monthly. The loan (principal plus interest) mustbe repaid at the end of the year. Midwest Bank also...
- Q in 500 words or more, discuss the limitations of financialstatements and financial ratio analysis.
- Q Effect of net income on a firm’s balance sheet Conrad Air Inc.reported net income of $1,365,000 for the year ended December 31,2020. Show how Conrad’s balance sheet would change from...
- Q The Haverly Company expects to finish the current year with thefollowing financial results, and is developing its annual plan fornext year.Haverly Company Income Statement This Year($000)$%Revenue$83640100.0COGS3599043Gross Margin$4765057Expenses:??? Marketing$1816921.7??? Engineering36534.4??? Fin...
- Q McCormick & Company is considering a project that requiresan initial investment of $24 million to build a new plant andpurchase equipment. The investment will be depreciated as amodified accelerated cost...
- Q Your brother wants to borrow 10,000 from you. He has offered topay you back $13,250 in a year. If the cost of capital of thisinvestment opportunity is 9% what is...
- Q Seaborn Co. has identified an investment project with thefollowing cash flows. Year Cash Flow 1 $800 2 1,010 3 1,340 4 1,170Required: (a) If the discount rate is 11 percent,...
- Q Blanchard and Muchnick stated, “The majority of business,government, and nonprofit organizations are stuck in a perpetualleadership crisis.”Do you agree? Why or why not?In your opinion, what factors caused this alleged...
- Q Most upcoming entrepreneurs will not have the 30 year corporatebackground working with one company. Do you believe this will makea difference in their success? Explain.
- Q NEW PROJECT ANALYSISYou must evaluate a proposal to buy a new milling machine. Thebase price is $162,000, and shipping and installation costs wouldadd another $13,000. The machine falls into the...
- Q The Perth Mint (the government corporation that prints money andcoin) had just produced a one kilogram gold coin imbedded with arare-red-argyle diamond. The mint values the coin at $1,000,000. Aone...
- Q Drof's silver reserves are being depleted, so its sales arefalling. Also, because its pit is getting deeper each year, itscosts are rising. As a result, the company's earnings and dividendsare...
- Q NEW PROJECT ANALYSISYou must evaluate the purchase of a proposed spectrometer forthe R&D department. The base price is $120,000, and it wouldcost another $18,000 to modify the equipment for special...
- Q 19.Which bond is more sensitive to an interest rate change of0.75%?Bond A: YTM = 4.00%, maturity = 8 years, coupon = 6% or $60, parvalue = $1,000.Bond B: YTM =...
- Q 1. Discuss the management of accounts receivable collections,cash disbursements and cash float.2. The credit manager and accounts receivable collections staffcan sink a company’s operations or make the company verysuccessful. Why?
- Q Peter and Blair recently reviewed their future retirement incomeand expense projections. They hope to retire in 25 years andanticipate they will need funding for an additional 13 years. Theydetermined that...
- Q 1. You wish to retire with $5 Million in 45 years. You estimateyou will earn 8% on your investments. How much must you invest eachyear in order to reach your...
- Q Critical Sales ForecastWhy is the sales forecast so important in short-term financialplanning?How does it affect the key areas in a whole organization?Which area do you think is most affected by...
- Q Your firm is contemplating the purchase of a new $666,000computer-based order entry system. The system will be depreciatedstraight-line to zero over its 5-year life. It will be worth$64,800 at the...
- Q Search the Internet (other than Wikipedia, Investopedia, orsimilar sites) for information on real and nominal interest rates.First, describe the difference between the two. Next, how hasinflation in the U.S. compared...
- Q An Italian company, New Century Corp, enters into a 1-yearinterest rate swap with Northern European Bank. The notionalprinciple of the swap is €100 million. Payments will be madesemiannually on the...
- Q During 2014, Raines Umbrella Corp. had sales of $666924. Cost ofgoods sold, administrative and selling expenses, and depreciationexpenses were $478699, $91112, and $84397, respectively. Inaddition, the company had an interest...
- Q Treynor Pie Company is a food company specializing inhigh-calorie snack foods. It is seeking to diversify its foodbusiness and lower its risks. It is examining three companies—agourmet restaurant chain, a...
- Q Down Under Boomerang, Inc., is considering a new 3-yearexpansion project that requires an initial fixed asset investmentof $2.3 million. The fixed asset will be depreciated straight-lineto zero over its 3-year...
- Q Call-a-way Inc. has identified a project with the followingcash flows:YearCash Flow1$ 9502 1,0403 1,1304 1,075If the discount rate is 10 percent, what is the present value ofthese cash flows? What is the present value at18%? What...
- Q Solve the unknown interest rate. Do not roundintermediate calculations and round your final answer to 2 decimalplaces.Present ValueYearsInterest RateFuture Value$ 2402$ 297 36010 108039,00015 185,382 38,26130 531,618The interest rate is calculating as per the formula FV =PV*(1+r) ^nb.Solve...
- Q Visit any large local retailer of your choice and imagine yourselfshopping for a product that you think is carried by thatretailer.Answer the following questions on the basis of your observationsand...
- Q A mining company is considering a new project. Because the minehas received a permit, the project would be legal; but it wouldcause significant harm to a nearby river. The firm...
- Q NEW PROJECT ANALYSISYou must evaluate the purchase of a proposed spectrometer forthe R&D department. The base price is $250,000, and it wouldcost another $37,500 to modify the equipment for special...
- Q Keller Cosmetics maintains an operating profit margin of 8% andasset turnover ratio of 5 what is it ROA?If its debt equity ratiois 1. Its interests payments and taxes each 9,500,...
- Q Adams operates his $35000 firm using his ownequity. Bob operates his firm with $17500 of hisown money plus $17500 of debt at a cost of10 percent interest.Calculate Adams's and Bob's...
- Q Examine an ad in a magazine, a TV commercial, or on a websiteand then write a one-page assessment in which you identify the fourparts of its sales message.
- Q CAPITAL BUDGETING CRITERIA: ETHICALCONSIDERATIONSAn electric utility is considering a new power plant in northernArizona. Power from the plant would be sold in the Phoenix area,where it is badly needed. Because...
- Q An investment project costs $20,500 and has annual cash flows of$4,300 for six years. Required : (a) What is the discounted paybackperiod if the discount rate is zero percent? (b)...
- Q 4. A large corporation subjected to 21% marginal tax isinvesting in a new income producing asset that is depreciated on aMACRS 5 year schedule. The full price of the asset...
- Q 5. One of the three traffic control improvement must be done.Conduct a B/C analysis and identify which one is favored. Theimprovement will be required for the foreseeable future. Use aninterest...
- Q Clemson Software is considering a new project whose data areshown below. The required equipment has a 3-year tax life and willbe depreciated by the straight-line method over 3 years. Revenuesand...
- Q Steady Eddie Corp. is constructing its cash budget. Its budgetedmonthly sales are $8,000, and they are constant from month tomonth. 40% of its customers pay in the first month and...
- Q Ina couple of paragraphs explain Value based reimbursement ...Howdoes the Value based future reimbursement methodology pertinent tothe hospital setting?
- Q Professor's annuity Corp. Offers a life time annuity to retiringprofessors. for a payment of 80,000 at age 65, the firm will paythe retiring professor $ 600 a month until death.(A)...
- Q Lakeside Winery is considering expanding its winemakingoperations. The expansion will require new equipment costing$695,000 that would be depreciated on a straight-line basis to zeroover the 6-year life of the project....
- Q Mr. Agirich of Aggie Farms is thinkingabout investing in a center pivot irrigation system to irrigate 100acres of land. The irrigation system costs $70,000. Mr. Agirichexpects that the irrigation system...
- Q Given the following information: NominalInitial Cost =$68,000; NominalBefore-tax Net Return = 11,000 MarginalTax Rate =20%; Requiredrate of return = 12% RealTerminal Value =$60,000; Investment Life = 3years InflationRate =4%; RiskPremium = 2%Suppose that IRS will allow the investor...
- Q First, spend a couple of sentences summarizing the Concepts inAction video you watched this week. Then, answer the following. In the Concepts in Action video you watched this week,the speaker mentioned,...
- Q Create a portfolio using the two stocks and informationbelow:Expected ReturnStandard DeviationWeight in PortfolioStock A8.00%11.00%42.00%Stock B9.00%32.00%58.00%----------------------------------------------------------------------------------------Correlation (A,B)0.1300--------------------------------------------(Do not round intermediate calculations. Record youranswers in decimal form and round your answers to...
- Q What are business and financial risks? How do we measurethem?
- Q Growth enterprise believes its latest product which will cost $80,000 to install will generate a perpetual growing stream of cashflows, cash flows after the end of the first year will...
- Q Balance Sheet Data Long-TermDebt 80,000,000 PreferredStock 20,000,000 CommonEquity 20,000,000Number of shares of Common 1,500,000 Price per shareCommon $42Number of shares ofPreferred 150,000 Price per sharePreferred $108Number of 8% Coupon 25-year Bonds 40,000 Price of 8% 25-yearBonds $1075Number of 6% Coupon 15-year Bonds 40,200 Price of 6% 15-yearBonds $920Forecasted...
- Q Create a portfolio using the four stocks and informationbelow:Expected ReturnStandard DeviationWeight in PortfolioStock A21.00%21.00%15.00%Stock B5.00%17.00%28.00%Stock C7.00%12.00%11.00%Stock D22.00%22.00%46.00%----------------------------------------------------------------------------------------Correlation (A,B)0.7000--------------------------------------------Correlation (A,C)0.4900--------------------------------------------Correlation (A,D)0.2500--------------------------------------------Correlation (B,C)0.4400--------------------------------------------Correlation (B,D)0.9600--------------------------------------------Correlation (C,D)0.2000--------------------------------------------(Do not round intermediate calculations. Record youranswers in...
- Q What is capital structure and how important it is? How is thecost of capital related to capital structure?
- Q howdoes depreciation affect inventory in a business ?
- Q Create a portfolio using the three stocks and informationbelow:Expected ReturnStandard DeviationWeight in PortfolioStock A18.00%16.00%35.00%Stock B22.00%10.00%15.00%Stock C14.00%15.00%50.00%----------------------------------------------------------------------------------------Correlation (A,B)0.4700--------------------------------------------Correlation (A,C)0.1200--------------------------------------------Correlation (B,C)0.3800--------------------------------------------(Do not round intermediate calculations. Record youranswers in decimal form and round...
- Q Cullumber Company is issuing eight-year bonds with a coupon rateof 6.2 percent and semiannual coupon payments. If the currentmarket rate for similar bonds is 9 percent. A) What will the...
- Q A hundred years ago or so, companies did not compile annualreports. Even if you owned stock in a particular company, you wereunlikely to be allowed to see the balance sheet...
- Q 4. A large corporation subjected to 21% marginal tax isinvesting 200,000 in a new income producing asset that isdepreciated on a MACRS 5 year schedule. The asset was paid forcompletely...
- Q Hi,Can you teach me how to answear product financingarrangement?
- Q 1. What is the traditional benefit cost ratio applying aninterest rate of 5.0% that requires an upfront investment of120,000 of the public project below? 1 2 3 4 5 6...
- Q A company's bond ratings might in concept be similar to your ownpersonal credit ratings. Use an example of how someone's personalcredit rating might affect their financial life -- and thentranslate...
- Q Find the equivalent taxable yield of the municipal bond for taxbrackets of zero, 10%, 20%, and 30%, if it offers a yield of3.30%Tax Bracketsa.Zero % =b.10% % = c.20% = d.30% %...
- Q Copy the below and put into an MSWord document (and save it :).Next enter paragraph breaks where you think they should go. You doNOT need rewrite or edit anything. Simply...
- Q Suppose you plan to purchase a $200,000 condo. The bank hasoffered you 30-year fixed rate mortgage with an APR of 6.5% andpayments due monthly. If you make a 20% down...
- Q Drake, Inc. manufactures electric welders that it sells to othermanufacturers, and sales last year were $45 million. Drake has a35% contribution margin. The marketing manager has suggestedincreasing the number of...
- Q Matta Manufacturing is trying to decide between two differentconveyor belt systems. System A costs $212,000, has a four-yearlife, and requires $68,000 in pretax annual operating costs. SystemB costs $300,000, has...
- Q Acme has branched out to rentals of office furniture to start-upcompanies. Consider a $5,000 desk. Desks last for six years and canbe depreciated on a five-year MACRS schedule. Assume that...
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