Finance question and answers for August 11, 2023
- Q Straight-Line and Units-of-Production MethodsAssume that Sample Company purchased factory equipment onJanuary 1, 2017, for $70,000. The equipment has an estimated lifeof five years and an estimated residual value of $7,000....
- Q Sound Systems has 200 shares of common stock outstanding at amarket price of $37 a share. The firm recently paid an annualdividend in the amount of $1.20 per share and...
- Q I am looking for someone to build a spreadsheet in excel thatcan quickly answers these type of questions by inputting the data.Thanks1.Suppose that on Monday, 16November, you assume a long...
- Q A firm offered somesecurities for sale to the public on March 28, 2008. Under theterms of the deal, the firm promised to repay the owner of one ofthese securities $100,000...
- Q 2. Is an individual who is perceived as having a disability, butin fact has recovered from the disability or is not disabled,covered by the ADA? Provide an example to support...
- Q (Bond valuation) Pybus, Inc. is considering issuing bonds thatwill mature in 16 years with an annual coupon rate of 9 percent.Their par value will be $1,000?, and the interest will...
- Q Knotts, Inc., an all-equity firm, is considering an investmentof $1.82 million that will be depreciated according to thestraight-line method over its four-year life. The project isexpected to generate earnings before...
- Q PROJECT CASH FLOWColsen Communications is trying to estimate the first-year cashflow (at Year 1) for a proposed project. The financial staff hascollected the following information on the project:Sales revenues$5 millionOperating...
- Q Al-Tek is considering leasing some new equipment for 5 yearswith annual payments. The equipment would cost $115,000 to buy andwould be depreciated straightline to a zero salvage value. Theactual salvage...
- Q First define the two different concepts of fundamentalanalysis and technical analysis as applied toevaluating investments. What are the advantages and/ordisadvantages of these diverse approaches?.
- Q Nealon Energy Corporation engages in the? acquisition,exploration,? development, and production of natural gas and oil inthe continental United States. The company has grown rapidly overthe last 5 years as it...
- Q PROBLEM 5-3COMPOUNDVALUE SOLVING FOR ANNUAL RATEAt what annual rate would the following lump sums have to beinvested to reach the future values shown?a. $500 to grow to $1,948.00 in 12...
- Q The Empire Hotel is a full-service hotel in a large city. Empireis organized into three departments that are treated as investmentcenters. Budget information for the coming year for these threedepartments...
- Q Madsen Motors's bonds have 10 years remaining to maturity.Interest is paid annually, they have a $1,000 par value, the couponinterest rate is 11%, and the yield to maturity is 12%....
- Q Human’s Inc.’s last dividend (D0) was $1.25, and its earningsand dividends are expected to increase at a constant growth rate of5%. Humana’s market beta is 1.2. If the current risk-free...
- Q Blasco just paid an annual dividend of $1.63 a share. What isone share of this stock worth to you if the dividends increase by 3percent annually and you require a...
- Q Yields on debt securities are affected by credit risk, tax status,liquity and term to maturity. Disuss the effect of these factors onthe yield of debt securites. Disucss the factors that...
- Q Three stocks have share prices of $21, $75, and $45 with totalmarket values of $460 million, $410 million, and $210 million,respectively. If you were to construct a price-weighted index ofthe...
- Q Is the use of currency derivatives advisable or are they purelyspeculative instruments?
- Q Short a call option with a strike price of $1.25 and a premiumof $0.12.Long a call option with a strike price of $1.35 and a premium of$0.02.Short a put option...
- Q ?(?Time-disparity problem?) The State Spartan Corporation isconsidering two mutually exclusive projects. The free cash flowsassociated with these projects are shown in the popup? window:LOADING.... The required rate of return on...
- Q The following probability distributions of returns for twostocks have been estimated:Probability; Stock A; Stock B0.3; 12%; 5%0.4; 8; 40.3; 6; 3What is the coefficient of variation for the stock that...
- Q Some particulars for a project are as follows:Capital Cost ($ Mn)1000Annual Operating cost ($ Mn/yr)10% of Capital CostAnnual Benefits ($Mn/yr)400Useful Life (years)20Interest/Discount rate (percent)10a) What is the Life Cycle Cost...
- Q If we consider the effect of taxes, then the degree ofoperating leverage can be written as: DOL = 1 + [FC × (1 – TC) –TC × D]/OCF Consider a project to...
- Q If a market is __________ form efficient, there is no point inhiring technical or fundamental analysts.If insiders are able to earn abnormal profits, markets___________ (are/ are not) strong form efficient.Mutual...
- Q You are called in as a financial analyst to appraise the bondsof Olsen’s Clothing Stores. The $1,000 par value bonds have aquoted annual interest rate of 10 percent, which is...
- Q 4. Refer to Table 10-1, which is based on bonds paying 10percent interest for 20 years. Assume interest rates in the market(yield to maturity) decline from 16 percent to 6...
- Q McGilla Golf has decided to sell a new line of golf clubs. Thecompany would like to know the sensitivity of NPV to changes in theprice of the new clubs and...
- Q Suppose the returns on long-term corporate bonds are normallydistributed. The average annual return for long-term corporatebonds from 1926 to 2007 was 6.7 percent and the standard deviationof those bonds for...
- Q SHOW WORK ON EXCEL: You are considering an investment that willpay you $12,000 the first year, $13,000 the second year, $17,000the third year, $19,000 the fourth year, $23,000 the fifth...
- Q Maud'Dib Intergalactic has a new project available on Arrakis.The cost of the project is $38,500 and it will provide cash flowsof $21,800, $27,800, and $27,700 over each of the next...
- Q Dina has received a job offer from Amegy bank as branch manager.Her base salary will be $50,000 today. Assuming for simplicity thatshe will receive $50,000 today and her next annual...
- Q Jim and Elsie aresaving for their granddaughter Amy’s college education. Amy justturned 12 (at t = 0), and she will be entering college 6 years fromnow (at t = 6)....
- Q Redstone Corporation is considering a leasing arrangement tofinance some special manufacturing tools that it needs forproduction during the next three years. A planned change in thefirm's production technology will make...
- Q J&R Construction Company is an international conglomeratewith a real estate division that owns the right to erect an officebuilding on a parcel of land in downtown Sacramento over the nextyear....
- Q Find the promised yield to maturity for a 9% coupon, $1,000 par20 year bond selling at $920.56. The bond makes semiannual couponpayments.a)9.44% b)9.92%c)9.99% d)10.14%Yield to Call Find the yield to...
- Q 39.) A 3-year fixed payment loan has an annual payment of $906.The interest rate for the loan is 7.7%. What is the duration (inyears) of the fixed-payment loan? Round your...
- Q How to determine a firm's overall cost of capital? Brieflyexplain its pitfalls.
- Q Gary Levin is the chief executive officer of MountainbrookTrading Company. The board of directors has just granted Mr. Levin12,000 at-the-money European call options on the company’s stock,which is currently trading...
- Q An asset costs $760,000 and will be depreciated in astraight-line manner over its three-year life. It will have nosalvage value. The lessor can borrow at 5.9 percent and the lesseecan...
- Q Sardano and Sons is a large, publicly held company that isconsidering leasing a warehouse. One of the company’s divisionsspecializes in manufacturing steel, and this particular warehouseis the only facility in...
- Q Although the Chen Company's milling machine is old, itis still in relatively good working order and would last foranother 10 years. It is inefficient compared to modern standards,though, and so...
- Q Broussard Skateboard's sales are expected to increase by15% from $8.0 million in 2016 to $9.20 million in 2017. Its assetstotaled $5 million at the end of 2016. Broussard is already...
- Q Broussard Skateboard's sales are expected to increase by15% from $7.2 million in 2016 to $8.28 million in 2017. Its assetstotaled $3 million at the end of 2016. Broussard is already...
- Q 16. The Campbell Company is considering adding a robotic paintsprayer to its production line. The sprayer's base price is$1,170,000, and it would cost another $19,000 to install it. Themachine falls...
- Q The real short-term risk-free rate is 1.5% and expected to stayconstant. The inflation rate is expected to be 1% this year, 2% foreach of the following 5 years, and 2.5%...
- Q In recent years, there have been several initial publicofferings in the social media industry, such as Facebook, Instagramand SnapChat. Choose one of these companies and discuss howsuccessful or unsuccessful the...
- Q You are called in as a financial analyst to appraise the bondsof Olsen’s Clothing Stores. The $1,000 par value bonds have aquoted annual interest rate of 8 percent, which is...
- Q Jim and Susie take out a mortage for $130,000 at 8% for 30years.What are their monthly payments?After 9 years, they decide to refinance with a 7.75% 15 year loan.What are...
- Q Winnebago Industries, Inc. is considering two alternativecapital investmentprojects for future expansion: (1) expand production of itsmotor homes, whichcurrently sell for $48,000 per unit, or (2) expand production ofits luxury motorcoaches,...
- Q What happens to home prices as interest rates fluctuate? Havehome prices recovered since rates have fallen since then to recordlows in late 2010 and beyond?
- Q Some recent financial statements for Smolira Golf, Inc.,follow.SMOLIRA GOLF, INC.Balance Sheets as of December 31, 2015 and 20162015201620152016AssetsLiabilities and Owners’ EquityCurrent assetsCurrent liabilitiesCash$3,211$3,307Accounts payable$2,153$2,600Accounts receivable4,7675,781Notes payable1,7502,116Inventory12,47813,782Other90107Total$20,456$22,870Total$3,993$4,823Long-term debt$13,400$16,160Owners’ equityCommon stock and...
- Q Fulkerson Manufacturing wishes to maintain a sustainable growthrate of 9.25 percent a year, a debt–equity ratio of .40, and adividend payout ratio of 32.5 percent. The ratio of total assets...
- Q High Flyer, Inc., wishes to maintain a growth rate of 13.75percent per year and a debt–equity ratio of .45. The profit marginis 4.7 percent, and total asset turnover is constant...
- Q Stock J has a beta of 1.35 and an expected return of 13.91percent, while Stock K has a beta of .90 and an expected return of10.85 percent. You want a...
- Q One of the factors contributing to the 2008-2009 recession wasthe unwillingness of commercial banks to extend loans to customers,some of whom were quite creditworthy. This unwillingness led towhat was called...
- Q Which of the following is not a type of callfeature?a. Deferred callb. Noncallablec. Discounted calld. Freely callableWhen compared with the market as a whole, a stock with a beta of1.5...
- Q Young vs UPS1. Explain the facts of the case leading to the dispute.2. What are three legal concepts or terms pertaining toemployment law that presented themselves during the case? Defineand...
- Q Sanders Enterprises, Inc., has been considering the purchase ofa new manufacturing facility for $272,000. The facility is to befully depreciated on a straight-line basis over seven years. It isexpected 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 You’ve collected the following information about Erna, Inc.:Sales=$290,000Net income=$17,900Dividends=$6,700Total debt=$62,000Total equity=$93,000What is the sustainable growth rate for the company? (Donot round intermediate calculations and enter your answer as apercent rounded...
- Q Bridgton Golf Academy is evaluating new golf practice equipment.The "Dimple-Max" equipment costs $110,000, has a 4-year life, andcosts $9,100 per year to operate. The relevant discount rate is 12percent. Assume...
- Q Given the following cash flows for a proposed capital investmentproject, calculate the payback period.YearCash Flow0-$40,000115,000215,000315,000415,000510,000610,000Question 4 options:5.50 years3.33 years4.33 years2.67 years
- Q "An industrial engineer proposed the purchase of an RFIDFixed-Asset Tracking System for the company's warehouse and weaverooms. The engineer felt that the purchase would provide a bettersystem of locating cartons...
- Q Consider the following information on Stocks I and II:State ofProbability ofRate of Return if State OccursEconomyState of EconomyStock IStock IIRecession.22.045?.37Normal.62.355.29Irrational exuberance.16.215.47The market risk premium is 11.7 percent, and the risk-free...
- Q A stock has a beta of 1.3 and an expected return of 12.8percent. A risk-free asset currently earns 4.3 percent.a. What is the expected return on a portfolio thatis equally...
- Q "A highway contractor is considering buying a new trenchexcavator that costs $222,000 and can dig a 3-foot-wide trench atthe rate of 15 feet per hour. The annual number of feet...
- Q Whitson Co. is looking for ways to shorten its cash conversioncycle. It has annual sales of $45,625,000, or $125,000 a day on a365-day basis. The firm's cost of goods sold...
- Q Find the following financial ratios for Smolira Golf Corp.Short-term solvency ratiosCurrent ratioQuick ratioCash ratioAsset turnover ratiosTotal asset turnoverInventory turnoverReceivables turnoverLong-term solvency ratiosTotal debt ratioEquity multiplier Times interest earned ratioCash coverage...
- Q A machine was purchased and installed in the beginning of year2019. The estimated cost in the period stated dollars is below. Thecosts are in current period dollars at the end...
- Q 3. Josh has been given two assignments, assignment A andassignment B. He estimates that the chance of getting a passinggrade on assignment A is 60% and the chance of getting...
- Q Your grandfather takes a reverse mortgage on his house for$100,000 at 8 percent for five years, annual annuity payments. Whatpayment will he receive? How much interest does he pay on...
- Q In investing, we would like to know the overall trend of themarket. Is the market trending up? Or, is it trending down? If themarket is trending up, we want to...
- Q "You purchased an airplane for $450,000 and will depreciate itusing a 7-year MACRS with a 5-year life. Salvage value in year 5 isexpected to be $176,000. The airplane is expected...
- Q A company has a 13% WACC and is considering two mutuallyexclusive investments (that cannot be repeated) with the followingcash flows:01234567Project A-$300-$387-$193-$100$600$600$850-$180Project B-$400$133$133$133$133$133$133$0What is each project's NPV? Round your answer to...
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!