Finance question and answers for August 14, 2023
- Q Mortgage affordability. Dhuha and Omar have an annual income of$183,408 and want to buy a home. Currently, mortgage rates are 4.25percent. They want to take out a mortgage for 30...
- Q Choco Inc. buys chocolate from Switzerland and resells it in theU.S. It just purchased chocolate invoicedat SF50,000. Payment for the invoice is due in 30 days. Assume thatthe current exchange...
- Q In 400 words explain the following:1. What is the relationship between interest rate level and bondprice? Why must this relationship be true? How has the current rateenvironment impacted the prices...
- Q If you are offered to invest an amount of $ 100,000 in abusiness opportunity that expected to achieve operating cash inflowafter considering taxes (net of taxes & before depreciation) inthe...
- Q Over time many large companies in the US have increasedexponentially the amount of long-term debt taken out to financeoperations. What are some other alternatives to long-term financingneeds in an organization...
- Q You are considering an investment in Justus Corporation's stock,which is expected to pay a dividend of $2.25 a share at the end ofthe year (D1 = $2.25) and has a...
- 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 eBook Problem Walk-ThroughFind the amount to which $600 will grow under each of theseconditions:4% compounded annually for 5 years. Do not round intermediatecalculations. Round your answer to the nearest cent.$ 4%...
- Q Assume that the United States invests heavily in government andcorporate securities of South Korea (hereafter, ‘Korea’). Inaddition, residents of Korea invest heavily in the United States.Approximately $20 billion worth of...
- Q Can all business processes be redesigned? Why or why not?
- Q XYZ Company’s machine was purchased 5 years ago for$55,000. It had an expected life of 10 years when it was bought,and its remaining depreciation is $5,500 per year for each...
- Q An Australian company is considering a three month short-terminvestment of 10,000AUD in either Australia or Switzerland. Thefollowing information is availableInitial spot exchange rate (AUD/CHF) 1.0775-1.0825Australian three month LIBOR rate (deposit...
- Q Hicks Health Clubs, Inc., expects to generate an annual EBIT of$502,000 and needs to obtain financing for $1,140,000 of assets.Its tax bracket is 39%. If the firm uses short-term debt,...
- Q Explain the factors that determine foreign exchange rates andtheir link to financial markets. In terms of balancing mechanisms,how does covered interest arbitrage ensure market equilibrium?
- Q Toshi Numata, FX analyst at Credit Suisse (Tokyo), observes thatthe ¥/$ spot rate has been holding steady, and both U.S. dollar andyen interest rates have remained relatively fixed over the...
- Q Suppose you are given the following financial statementinformation for 2015 and 2016. Calculate the operating cash flows(OCF) for 2016. (Enter a whole number).IncomeStatement (2016)BalanceSheetSales$9,35220152016Cost of goods sold$3,612Cash$2,450$2,856Other Expenses$95Accounts Receivable$1,690$1,780Depreciation$1,250Inventory$3,570$3,460EBIT$4,395Current Assets$7,710$8,096Interest$45Net Fixed...
- Q The approximate after-tax cost of debt for a 20-year, 7 percent,$1,000 par value bond selling at $960 (assume a marginal tax rateof 40 percent) isSelect one:a. 4.41 percent.b. 5.15 percent.c....
- Q Define what a reverse mortgage is? Why might someone who isretired think about doing a reverse mortgage?
- Q An All-Pro defensive lineman is in contract negotiations. Theteam has offered the following salary structure:TimeSalary0$6,700,0001$5,300,0002$5,800,0003$6,300,0004$7,700,0005$8,400,0006$9,200,000 All salaries are to be paid in lump sums. The player has askedyou as his agent...
- Q Zulu 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 method....
- Q Which is CORRECT about information asymmetry and adverseselectionInformation asymmetry refers to the situation when buyers havemore information on the product than the sellers.Information asymmetry is the result of adverse selection.In...
- Q a project with an initial cost of $29,350 is expected to generatecash flows of $7,200, $9,300, $9,400, $8,300 and $8,000 over eachof the next 5 years respectively. what is the...
- Q d. Calculate the future sum of?$1 comma 5001,500?,given that it will be held in the bank for1515years and earn1111percent compounded semiannually.e. What is an annuity? due? How does this differ...
- Q Research and discuss the topics of data analysis and datavisualization as it relates to the accounting profession. How dothey impact and enhance financial statement analysis? Research anddiscuss the topic of...
- Q Sara Inc's most recent earnings per share were $2.00. Sara has aconsistent policy of paying out 30% of its earnings as dividend.Researchers say that Sara earnings will grow at a...
- Q 6. Define or discuss briefly: a. Full-bodied money b.Representative full-bodied money c. Credit money d. Fiat money
- Q Consider the following two bond issues.Bond M: 4% 30-year bondBond N: 6% 30-year bondNeither bond has an embedded option. Both bonds are trading inthe market at the same yield.Which bond...
- Q . Outline the various components of the U.S. money supply as itexists today
- Q You are considering a 10-year, $1,000 par value bond. Its couponrate is 9%, and interest is paid semiannually. If you require an"effective" annual interest rate (not a nominal rate) of...
- Q As of September? 2012, Google? (GOOG) had no debt. Suppose the?firm's managers are considering issuing? zero-coupon debt due in 16months with a face value of$ 165.7?billion, and using the proceeds...
- Q The following information is available for Sheffield Company atDecember 31, 2018: beginning inventory $139000; ending inventory$121000; cost of goods sold $845000; and sales $1880000.Sheffield’s inventory turnover in 2018 is 14.5...
- Q Mike and Sheila Parker have determined that they need aretirement fund of $2,000,000 at their planned retirement in 30years; they want to begin a savings program this year to meet...
- Q Silver Sun Entertainment has a weighted-average cost of capitalof 8.22 percent and is evaluating two projects: A and B. Project Ainvolves an initial investment of 5,756 dollars and an expectedcash...
- Q Keep in mind that regular annuities are assumed to take place atthe end of the period. So when you make a car or house payment,while you make the payment on...
- Q Five years from today, you plan to invest $2,950 for 8additional years at 5.3 percent compounded annually. How much willyou have in your account 13 years from today?Multiple Choice $4,962.80...
- Q 1) I offer to borrow money from you for 60 days at the followinginterest rate quotations:A. a discount rate of 8.30%.B. a simple interest money market rate of 8.37%.C. a...
- Q An idea that has been put forward for addressing the Aucklandhousing market problems is that foreign buyers should be requiredto pay a tax on the land they have bought. How...
- Q Silver Sun Entertainment has a weighted-average cost of capitalof 8.22 percent and is evaluating two projects: A and B. Project Ainvolves an initial investment of 5,756 dollars and an expectedcash...
- Q Joel Foster is the portfolio manager of the SF Fund, a $3million hedge fund thatcontains the following stocks. The required rate of return onthe market is 11.00% andthe risk-free rate...
- Q explain the difference between Banking crises and bank failures,is it true/false between Banking crises and bankfailures are the same since their causes and effects arethe same.
- Q Has the doom loop between indebted banks and indebted sovereignsin Europe been broken? and What further steps should be taken toensure that all bank failures in Europe can be handled...
- Q What public policy goals do you think are served by establishingspecific limitations on qualified plan contributions and/orlimits?
- Q Compare and contrast the three methods of cost-finding discussedin Chapter 12-Cost-to-charge,-Step-Down, and-Activity-Based Costing.How do they work?What type of organizations might use each of the methods andwhy?
- Q You bought one of Bergen Manufacturing Co.’s 5.4 percent couponbonds one year ago for $1,053. These bonds make annual payments andmature twelve years from now. Suppose you decide to sell...
- Q What is the purpose of a decommissioning fund (“sinking”fund)? And, why does a lump sum up front make more sense thandeducting a certain interest over the expected duration ofservice?
- Q The following information was available for Waterway Company atDecember 31, 2018: beginning inventory $107000; ending inventory$61000; cost of goods sold $6132000; and sales $1440000. Waterway’sdays in inventory in 2018 was...
- Q Bond J has a coupon rate of 4.2 percent. Bond K has a couponrate of 14.2 percent. Both bonds have ten years to maturity, a parvalue of $1,000, and a...
- Q A bond has a face value of $1,000, coupon rate of 8%, andmatures in 6 years. Imagine that the market interest rate is 6%,but immediately after you buy the bond...
- Q Question 2-7 are based on the following seriesof futures price (F(0), F(1),... F(6)):Day 0: F(0)=$212Day 1: F(1)=$211Day 2: F(2)=$214Day 3: F(3)=$209Day 4: F(4)=$210Day 5: F(5)=$202Day 6: F(6)=$200Suppose you are going...
- Q Jaguar Electronics, Inc. is a specialized electronics firmlocated in Charleston, South Carolina in the United States. Thecompany was founded in 1965 and has enjoyed success and modestgrowth as a supplier...
- Q On November 1st, Ava’s credit card has a balance of $4,501.00.According to the terms of the card’s lending agreement, an interestrate of 18% per year is assessed and the monthly...
- Q Tesla Corporation needs to raise funds to finance a plantexpansion, and it has decided to issue 20-year zero coupon bonds toraise the money. The required return on the bonds will...
- Q Discuss a management strategy used toretain or increase cash. Share an example of a time when you’veused a similar strategy in your personal finances. How are theapplications of these strategies similar...
- Q Braun Industries is considering the following mutually exclusiveprojects. Braun’s cost of capital is 9%. Year ProjectA Project B 0 ($86,000) ($86,000) 1 $42,000 $63,000 2 $32,000 $28,0003 $12,900 $8,000 4 $12,200 $3,0005 $12,000 $2,000a. Calculate eachproject’s NPV and IRR.b. Find the Payback Periodfor each project.c. Find the MIRR...
- Q Davola Inc. has the following financial information: • Debt: Thefirm issued 1,000, 20 year bonds five years ago which were sold ata par value of $1,000. The bonds carry a...
- Q Sears, Inc. common stock is currently trading on the NYSE ataprice of $30 per share with 24,000,000 shares outstanding.Dividend just paid is$1.50 per share and is forecasted to grow at...
- Q Find articles on the Internet and discuss the differencesbetween straight and convertible bonds and the differences betweenstock options and warrants. How are convertible bonds similar tooptions? Provide the links for...
- 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 falls into the 3-year MACRS class(MACRS schedule). The...
- Q Down Under Boomerang, Inc., is considering a new 3-yearexpansion project that requires an initial fixed asset investmentof $2.37 million. The fixed asset will be depreciated straight-lineto zero over its 3-year...
- Q Consider a capital expenditure project to purchase andinstall new equipment with an initial cash outlay of $25,000. Theproject is expected to generate net after-tax cash flows each yearof $6800 for...
- Q 12.) The most common term for a consumption tax is:wealth tax.progressive tax.sales tax.income tax.QUESTION 13Which of the following is a consumption tax?Ad valorem taxReal estate taxExcise taxPersonal property taxQUESTION 14In...
- Q Northern Air would like to sell 2,900 shares of stock usingDutch auction underwriting. The bids received are: Bidder QuantityPrice A 450 $ 29.00 B 550 28.65 C 950 28.50 D...
- Q Assume you buy a bond with a face value of $1,000, maturity of 5years, and a coupon rate of 7%. Assume that the YTM remainsconstant and equal to 7% throughout...
- Q 1. ChooChoo Inc. is a manufacturer of model trains. The company isconsidering the purchase of an industrial 3D printer, which willallow the firm to produce custom-made model trains for...
- Q Mr. Agirich of Aggie Farms is thinking about investing in acenter pivot irrigation system to irrigate 100 acres of land. Theirrigation system costs $70,000. Mr. Agirich expects that theirrigation system...
- Q Discuss the conditions under which investors would prefer tohold short-term bonds and when they would prefer to hold long-termbonds. Find an Internet site that explains duration and howinvestors should utilize...
- Q What is the relationship of accountability,responsibility, and authority with respect to a responsibilitycenter
- Q I need to know the three components of health care FINANCEsystem. The expert below DID NOT answer that part of the question.He may have answered a few components of a...
- Q Parramore Corp has $12 million of sales, $2 million ofinventories, $3 million of receivables, and $3 million of payables.Its cost of goods sold is 80% of sales, and it finances...
- Q You have a portfolio with $15,000 invested in Stock A with abeta of 2.5, $25,000 invested in stock B with a beta of 0.7, and$10,000 invested in Stock C with...
- Q Please use a real-life example to explore the following:When is Vega the highest –in the money, out of the money, ornear the money? Why do you think this is the...
- Q You’ve collected the following information about Erna, Inc.:Sales=$300,000Net income=$18,100Dividends=$6,900Total debt=$64,000Total equity=$95,000What is the sustainable growth rate for the company? (Donot round intermediate calculations and enter your answer as apercent rounded...
- Q Calculate the contribution to total performance from currency,country, and stock selection for the manager in the example below.All exchange rates are expressed as units of foreign currency thatcan be purchased...
- Q Dash Riprock is a cost analyst with Safe Insurance Company. Safe isapplying standards to its claims payment operation. Claims paymentsis a repetitive operation that could be evaluated with standards.Dash used...
- Q A firm evaluates all of its projects by applying the NPVdecision rule. A project under consideration has the following cashflows: YearCash Flow0–$27,300111,300214,300310,300A) What is the NPV for the project if the...
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