Finance question and answers for August 10, 2023
- Q 1. An asset is forecast to have a return of 30% with aprobability of .5 (50%) and a return of 10% with a probability of.5 (50%). The expected return is...
- Q Given Principal $18,000, Interest Rate 9%, Time 240 days (useordinary interest) Partial payments: On 100th day, $7,600 On 180thday, $4,300a. Use the U.S. Rule to solve for totalinterest cost. (Use...
- Q Future value.??Jack and Jill are saving for a rainy day and decide to put?$60 away in their local bank every year for the next 20 years. Thelocal? Up-the-Hill Bank will...
- Q Suppose K1 and K2 have the following distribution:Scenario Probability return K1 return K2w(1) 0.3 -10% 10%w(2) 0.4 0% 20%w(3) 0.3 20% -10%(a) Find the risk of the...
- Q explain capital budgeting in 300-350 words.
- Q explain difference between Operating and Terminal Cash Flow in300-350 words
- Q Balance Sheet at end of AprilCash-60,000 Stock 400,000Receivables 350,000Inventories280,000 RetainedEarnings 170,000Totals570,000 Totals 570,000Assume the owner, Derrick, got a loan in April to cover his cashshortfall. Also assume that sales in May, June,...
- Q Problem 11-13Replacement AnalysisThe Everly Equipment Company's flange-lipping machine waspurchased 5 years ago for $100,000. It had an expected life of 10years when it was bought and its remaining depreciation is...
- Q You have been assigned to construct an optimal portfoliocomprising two risky assets (Portfolios A & B) whileconsidering your client’s risk tolerance. The attached spread sheetshows historical monthly returns of the...
- Q The following table summarizes the yields to maturity onseveral? one-year, zero-coupon? securities: Security Yield ?(%)Treasury 3.07 AAA corporate 3.19 BBB corporate 4.14 B corporate4.85 a. What is the price? (expressed...
- Q 1. Explain with examples how these three users (investor,manager and creditor) analyze financial statements and how they useit. If you were one of the three users, what statement(s) entry orentries,...
- Q Tom and Debbie are starting to take their retirement planningseriously. They are both 46 and plan to retire in 20 years at theage of 66. They expect to live 15...
- Q 2-3 Uninsured motorist coverage is one approach to the problemof uninsured drivers. a. Explain the advantages of uninsuredmotorist coverage in meeting the problem of uninsured drivers b.Explain the defects of...
- Q You must evaluate the purchase of a proposed spectrometer forthe R&D department. The base price is $240,000, and it wouldcost another $48,000 to modify the equipment for special use by...
- Q You must evaluate a proposal to buy a new milling machine. Thebase price is $191,000, and shipping and installation costs wouldadd another $18,000. The machine falls into the MACRS 3-year...
- Q Dean is planning to purchase a car for $28,560. He has 12% toput down and can finance the remainder for 5 years. Hecan get a loan at 2.14% APR.Since Dean...
- Q EXPECTED RETURNA stock's returns have the following distribution:Demand for theCompany's ProductsProbability of ThisDemand OccurringRate of Return IfThis Demand OccursWeak0.1(38%)Below average0.2(12) Average0.312 Above average0.125 Strong0.372 1.0Calculate the stock's expected return. Round your answer to twodecimal...
- Q An investor is considering an exchange traded fund with 12%expected return and 24% standard deviation. What will be hisexpected return, if his risk aversion coefficient is 4? The riskfree rate...
- Q Consider a project to supply 102 million postage stamps per yearto the U.S. Postal Service for the next five years. You have anidle parcel of land available that cost $1,715,000...
- Q Basic Stock Valuation: Dividend GrowthModelThe value of a share of common stock depends on the cash flowsit is expected to provide, and those flows consist of the dividendsthe investor receives...
- Q You are considering how to invest part of your retirementsavings.You have decided to put $400,000into three? stocks: 64% of the money in GoldFinger? (currently27?/share), 25%of the money in Moosehead? (currently...
- Q Discuss the concept of Replacement Cost Coverage for HomeownersPolicies, the danger that many homeowners face with replacementcost coverage and the result if a homeowner does not carry enoughcoverage.
- Q Growth RatesSales for Hanebury Corporation's just-ended year were $20million. Sales were $10 million 5 years earlier.At what rate did sales grow? Do not round intermediatecalculations. Round your answer to two...
- Q The methods of valuation are the following, market multiples ofpeer firms, book value, liquidation value, replacement cost, marketvalue, and comparable transaction multiples. After looking throughvaluation techniques, which one do you...
- Q Three years ago you purchased a 11?% coupon bond that payssemiannual coupon payments for ?$963. What would be your bondequivalent yield if you sold the bond for current market price...
- Q You need a particular piece of equipment for your productionprocess. An? equipment-leasing company has offered to lease theequipment to you for $ 10 comma 500 per year if you sign...
- Q Orchid Biotech Company is evaluating several differentdevelopment projects for experimental drugs. Although the cashflows are difficult to? forecast, the company has come up with thefollowing estimates of the initial capital...
- Q What are some key considerations for the federal income taxtreatment of property and liability insurance?
- Q The project budget baseline for XYZ is $3,500,000 with thefollowing risks assessment: Risk Event Probability Impact ExpectedValue Parts delayed in Customs 40% $100,000 Strong labor trainingequates to quick assembly 60%...
- Q The forecasted dividend per share in 2019 (it is 2011 in thecase) is $1.21. If the dividend per share is expected to grow by 6%each year over the period 2020...
- Q The forecasted dividend per share in 2019 (it is 2011 in thecase) is $1.21. If the dividend per share is expected to grow by 6%each year over the period 2020...
- Q The 1-year, 2-year, 3-year and 4-year zero rates are 2%,3%, 4% and 5% per annum (APR) with quarterlycompounding/payment.a) What are the corresponding per annum zerorates with continuous compounding?b) What is...
- Q FIN300 Inc.'s manager believes that economic conditions duringthe next year will be strong, normal, or weak, and she thinks thatthe firms returns will have the probability distribution shownbelow. What are...
- Q You have just taken out a $ 17 comma 000 car loan with a 6 %?APR, compounded monthly. The loan is for five years. When you makeyour first payment in...
- Q Explain some of the advantages and disadvantages of currencyexchange. When taking part in currency exchange, certain risks canbe exposed. Of the different methods of managing currency exchangerisk, which method do...
- Q What Matt Johnson delivers newspapers and is putting away $35 atthe end of each quarter from his paper route collections. Matt is10 years old and will use the money when...
- Q Choose two companies in the same industry whosefinancial statements are available online. Complete severalfinancial ratios for each company and compare them. What did youranalysis tell you about these companies? What...
- Q The organizations’ Controller has received a notice from theCanada Revenue Agency (CRA) advising that the organization will bechanging from an Accelerated threshold 1 remitter to an Acceleratedthreshold 2 remitter effective...
- Q Discuss a management strategy used to retain orincrease cash. Share an example of a time when you’ve used asimilar strategy in your personal finances. How are theapplications of these strategies...
- Q The managers of Poncho Parts, Inc. plan to manufacture engineblocks for classic cars from the 1960s era. They expect to sell 250blocks annually for the next 5 years. The necessary...
- Q Explain why each ratio individually is favorable or notfavorable to the industry average.Profitability: NetProfit Margin =11.00 Industry average: 5.91Return on equity=39.69 Industry average: 10.50CurrentPrice-to-Earnings P/E ratio= 12.38 Industry average:...
- Q While this chapter discussed the many benefits of diversity, analternative view suggests that no empirical evidence exists to showthat a diverse workforce has a positive effect on organizationalperformance, employee commitment,...
- Q A company has an un-leveraged value of 3,000,000 and debt600,000. If the company is subject to a corporate tax rate of 0.50,and investors in the company are subject to a...
- Q 18.Rank the following bonds, from highest to lowest interestrate risk: 2-year zero coupon, 2-year 5% coupon bond, 30-year 5%coupon bond, 30-year, zero coupon bond.A.30-year zero coupon bond, 30-year 5% coupon...
- Q You are planning to save for retirement. You would like toretire 22 years from today and you currently have $205,000 setaside. You anticipate saving $750 per month ($500 out of...
- Q Kiwi Helicopters Ltd has a target capital structure of 70%ordinary common shares and 30% debt. They issued a twenty-year, 5%bond 10 years ago. The bond currently has a yield-to-maturity of7.5%....
- Q Summers, Inc., is an unlevered firm with expected annualearnings before taxes of $31.7 million in perpetuity. The currentrequired return on the firm’s equity is 12 percent and the firmdistributes all...
- Q ASSIGNMENTDevelop you or your family's short-term and long-term financialgoals..Create investment strategies and plans toward each of theidentified goals.
- Q You have been hired by Amreez Corporation (AC), a manufacturerof Bop a Pop (BaP), a recent fad, to determine whether or not ACshould pursue the manufacture of BaP. After a...
- Q Discuss how various budgets interact with each other – examplecould be the cash budget and the sales and purchases budget or thecapital budget and the cash budget and the budgeted...
- Q The 12?-year, ?$1,000 par value bonds of Waco Industries pay 12percent interest annually. The market price of the bond is ?$955?,and the? market's required yield to maturity on a? comparable-riskbond...
- Q Below is actual price and dividend data for three companies foreach of seven months.Security ASecurity BSecurity CTimePriceDividendPriceDividendPriceDividend1$48.27$25.50$178.002$49.10$23.85$165.003$52.60$2.50$19.95$2.50$174.00$15.004$51.35$24.65$182.005$53.25$25.10$183.006$53.92$2.25$22.78$2.50$187.00$12.507$52.00$26.18$193.00Assuming short selling is allowed: i. For securities 1 and 2 find the composition, standard...
- Q Below is actual price and dividend data for three companies foreach of seven months.Security ASecurity BSecurity CTimePriceDividendPriceDividendPriceDividend1$48.27$25.50$178.002$49.10$23.85$165.003$52.60$2.50$19.95$2.50$174.00$15.004$51.35$24.65$182.005$53.25$25.10$183.006$53.92$2.25$22.78$2.50$187.00$12.507$52.00$26.18$193.00A. Compute the rate of return for each company for each month (usesimple return...
- Q A bond offers a coupon rate of 6%, paid annually, and has amaturity of 6 years. If the current market yield is 7% (discountrate), what should be the price of...
- Q A bond offers a coupon rate of 6%, paid semiannually, and has amaturity of 17 years. If the current market yield is 3%, whatshould be the price of this bond?
- Q Do you think buying and selling for a profit is morally good orbad? Put yourself in the place of a business owner before you giveyour answer.How would1. Aristotle2. the Chinese3....
- Q Based upon a bit of research, what you've learned in your priorcoursework, or any observations from your industry experiences,what are some of the key strategic functions of the CFO in...
- Q NEW PROJECT ANALYSIS You must evaluate a proposal to buy a newmilling machine. The base price is $125,000, and shipping andinstallation costs would add another $14,000. The machine fallsinto the...
- Q You write one IBM July 131 call contract for a premium of $7.You hold the option until the expiration date, when IBM stock sellsfor $134 per share. You will realize...
- Q 2. In the absence of market imperfections and tax effects, wewould expect the share price to decline by the amount of thedividend payment when the stock goes ex dividend. Once...
- Q If you deposit $5,900 at the end of each of the next 20 yearsinto an account paying 10.8 percent interest, how much money willyou have in the account in 20...
- Q A firm’s profit margin is 18%, and its asset turnover ratio is.5. It has no debt, has net income of $50 per share, and paysdividends of $35 per share.What is...
- Q ???(Bond valuation) ?Pybus, Inc. is considering issuing bondsthat will mature in 22 years with an annual coupon rate of 12percent. Their par value will be ?$1,000?, and the interest will...
- Q Suppose Blue Thumb Tools is considering the introduction of anew, heavier hammer to be used for driving spikes. The new hammerwill cost $490,000. The cost will be depreciated straight-line tozero...
- Q You 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 use by...
- 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 $650,000 and a...
- Q Charlene is evaluating a capital budgeting project that shouldlast for 4 years. The project requires $675,000 of equipment. Sheis unsure what depreciation method to use in her analysis,straight-line or the...
- Q Discuss financial analysis and key ratios that may be beneficialin evaluating a company.
- Q Hi, I have a set of three similar questions here. I don'tnecessarily need them all answered. Maybe just one or two, what Ireally need is the formulas used in solving...
- Q If you take the maximum length of time to pay off a credit card,at a rate of 18.5%, how much interest will you pay in interest on adebt of $2,000?....
- Q Bethesda Mining is a midsized coal mining company with 20 mineslocated in Ohio,Pennsylvania, West Virginia, and Kentucky. The company operatesdeep mines as well as stripmines. Most of the coal mined...
- Q Consider two bonds. The first is a 6% coupon bond with six yearsto maturity, and a yield to maturity of 4.5% annual rate,compounded semi-annually. The second bond is a 2%...
- Q A corporation needs a machine that costs $1 million and networking capital of $100,000 for an investment project. Assume thedepreciation is straight-line to zero over the 5 year life of...
- Q P9-11 (Algo) Computing Present Values LO9-7, 9-8[The following information applies to the questionsdisplayed below.]On January 1, Boston Company completed the following transactions(use a 7% annual interest rate for all transactions):...
- Q 1. 2 Assume that a cardiologistgroup practice has the following cost structure:Fixed Cost: $500,000 Variable Cost PerProcedure: $25Furthermore, assume that the groupexpects to perform 7,500 procedures in the coming year.A. What...
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