Finance question and answers for August 21, 2023
- Q Macon Company is considering a newassembly line to replace the existing assembly line. The existingassembly line was installed 2 years ago at a cost of $90,000; itwas being depreciated under...
- Q Gold Diggers, Inc. has 652,000 shares of common stock, currentlytrading at $90.52/share. The common stock of Gold Diggers, Inc. isexpected to generate a dividend of $3.00/share next year, and ithas...
- Q Balance the budget sheet:Current Assets:Total Current Assets:Property and equipment:Other assets:Total Assets:Current liabilities:Total Current Liabilities:Total Liabilities:Share holders equityTotal Liabilities & Share holders Equity:Instructions: Please place the following items and amountsin their...
- Q Kirksville Inc. has 1,100 bonds outstanding that are selling for$992 each. The bonds carry a 6.0 percent coupon, pay interestsemi-annually, and mature in 7.5 years. The company also has 9,500shares...
- Q The president of Lowell Inc. has asked you to evaluate theproposed acquisition of a new computer. The computer's price is$60,000, and it falls into the MACRS 3-year class (33% in...
- Q Suppose you own 50,000 shares of common stock in a firm with 2.5million total shares outstanding. The firm announces a plan to sellan additional 1 million shares through a rights...
- Q THE MBA DECISION Ben Bates graduated from college six years agowith a finance undergraduate degree. Since graduation, he has beenemployed in the finance department at East Coast Yachts. Althoughhe is...
- Q Consider the following situation:State of EconomyProbability of State of EconomyReturns if State OccursStock AStock BStock CBoom20%25%10%5%Recession80%-30%5%10%The expected return on the marketportfolio is 7% and the US Treasury bill yields 3%....
- Q Macon Company is considering a newassembly line to replace the existing assembly line. The existingassembly line was installed 2 years ago at a cost of $90,000; itwas being depreciated under...
- Q a. What are the redeeming qualities and shortcomings of theinternal rate of return (IRR) method in capital budgeting analysis?explainb.Explain conceptually in detail what the weighted average costof capital (WACC) is...
- Q What are flotation costs and why they must be included in theinitial cost of a project? Explain in detail.2. Tell me the differences between the standard deviation andbeta in the...
- Q The shares of XYZ Inc. are currently selling for $120 per share.The shares are expected to go up by 10 percent or down by 5 percentin each of the following...
- Q Stilley Resources bonds have 20 years left to maturity. Interestis paid annually, and the bonds have a $1,000 par value and acoupon rate of 21.5 percent. Compute If the price of...
- Q A firm sells Gizmos to consumers at a price of $87 per unit. Thecosts to produce Gizmos is $30 per unit. The company will sell14,000 Gizmos to consumers each year....
- Q FIND, CITE AND SUMMARIZE AN ARTICLE WHERE CORPORATE DIRECTORSPAID FOR THEIR BAD ACTIONS WITH JAIL TIME, FINES OR BOTH
- Q Kirksville Inc. has 1,100 bonds outstanding that are selling for$992 each. The bonds carry a 6.0 percent coupon, pay interestsemi-annually, and mature in 7.5 years. The company also has 9,500shares...
- Q It is only July and we have run short of funds to payour employees for the remainder of this year. As a result, we needto seek creative ways to help...
- Q 1. We find the following information on NPNG(No-Pain-No-Gain) Inc. (18 marks total)EBIT = $2,000,000Depreciation = $250,000Change in net working capital = $100,000Net capital spending = $300,000These numbers are projected toincrease...
- Q You are trying to determine the WACC for White Sox. It has thefollowing characteristics. (12 points)Discount rate of 10%. The company had pre-tax netincome of $50mm last year and paid...
- Q Use the APY formula required by the Truth in Savings Act for thefollowing calculation:Suppose that a customer holds a savings deposit in a savingsbank for a year. The balance in...
- Q Consider the following two mutually exclusive projects: YearCash Flow (A)Cash Flow (B)0–$199,954 –$15,324 127,800 5,058 255,000 8,105 356,000 13,036 4404,000 8,859 Whichever project you choose, if any, you require a 6...
- Q Why did the government bailout Bear Stearns, Fannie Mae, FreddieMac and AIG but not Lehman?
- Q A 9-year maturity, AAA rated corporatebond has a 6% coupon rate. The bond's promised yield is currently5.75%. The bond pays interest semiannually.What is the bond's duration?What is the bond's convexity?If...
- Q On the Risk Pyramid, what 5 investments are considered higherrisk, higher return?Proper loan documentation by a bank or lender accomplishes whatfive items to ensure the loan is enforceable?Name the 5...
- Q You are considering the following two mutually exclusiveprojects. Both projects will be depreciated using straight-linedepreciation to a zero book value over the life of the project.Neither project has any salvage...
- Q YEEHAW Co. is growing quickly. Dividends are expected to grow ata rate of 30 percent for the next three years, with the growth rateoff to a constant 5 percent thereafter....
- Q ?Drilling-Easy (DE) Inc. currently has two? products, low-priceddrills and a line of smart drill bits. DE Inc. has decided to sella new line of? high-priced drills. Sales for the new...
- Q Shrieves Hospital Ltd. is considering adding a new lineto its diagnostic product mix, and the capitalbudgeting analysis is being conducted by Sidney Johnson,a recently graduated MHA. A new bone densityscanner...
- Q McGilla Golf has decided to sell a new line of golf clubs. Theclubs will sell for $795 per set and have a variable cost of $355per set. The company has...
- Q Geary Machine Shop is considering a four-year project to improveits production efficiency. Buying a new machine press for $585,600is estimated to result in $195,200 in annual pretax cost savings.The press...
- Q Your firm is contemplating the purchase of a new $2,090,500computer-based order entry system. The system will be depreciatedstraight-line to zero over its 5-year life. It will be worth$203,400 at the...
- Q PLEASE NO HANDWRITTEN OR COPIED ANSWERSWhat is the medium timeframe for detection of fraud schemes?
- Q Geary Machine Shop is considering a four-year project to improveits production efficiency. Buying a new machine press for$1,142,400 is estimated to result in $380,800 in annual pretax costsavings. The press...
- Q The National Bank of Mayville quotes an APY of 3.5 percent on aone-year money market CD sold to one of the small businesses intown. The firm posted a balance of...
- Q Ambrin Corp. expects to receive $5000 per year for 10 years and$6500 per year for the next 10 years. What is the present value ofthis 20 year cash flow? Use...
- Q Your firm is contemplating the purchase of a new $2,164,500computer-based order entry system. The system will be depreciatedstraight-line to zero over its 5-year life. It will be worth$210,600 at the...
- Q Show the effect on price (increase, decrease, no effect): Showthe effect on price (increase, decrease, no effect) for each of thefollowing situations under three form of market efficiencySituationsSituationsWeakSemi-StrongStrongThe WSJ publishes...
- Q You would like to buy shares of a particular company. Thecurrent bid quote is $30.50 and the current ask quote is $30.75. Ifthe stock trade fee is $10 per trade,...
- Q PLEASE NO HANDWRITTEN OR COPIED ANSWERSExplain what reviewing the history of cost center variances overtime will help a company determine.
- Q PLEASE NO HANDWRITTEN OR COPIED ANSWERSIdentify the activities that structure the Financial managementprocess.
- Q A new operating system for an existing machine is expected tocost $760,000 and have a useful life of six years. The systemyields an incremental after-tax income of $265,000 each year...
- Q i. Which of the following is true of corporate risk?a. It is the risk that is measured by beta.b. It is the risk that is used in calculating the required...
- Q Inyour own words write a paragraph or two about “credit ratingagencies “ such as the importance of it , advantage anddisadvantages , real life examples and etc ...
- Q A. What do pro forma financial statements show?B. What are pro forma financial statements based on?C. What are the strategic benefits of making financialprojections on pro forma statements?
- Q Maple Aircraft has issued a convertible bond at 4.75% interestdue 2020. The market price of the convertible is 91% of face value(face value is $1,000). The current price of the...
- Q The Schmedley Discount Department Store has approximately 300customers shopping in its store between 9 A.M. and 5 P.M. onSaturdays. In deciding how many cash registers to keep open eachSaturday, Schmedley’s...
- Q what is the Sarbanes-Oxley Act? Specifically, what does itaddress in financial reporting and auditing that was lacking prior?Secondly, while it may seems obvious - why is it important tounderstand foreign...
- Q Question 3 20 Marks FMCG company finds that its brand of laundrydetergent is losing market share, so it decides to “frozen” theproduct. One strategy is to maintain the current detergent...
- Q Dog Up! Franks is looking at a new sausage system with aninstalled cost of $569,400. This cost will be depreciatedstraight-line to zero over the project's 6-year life, at the end...
- Q Kaelea, Inc., has no debt outstanding and a total market valueof $69,000. Earnings before interest and taxes, EBIT, are projectedto be $9,000 if economic conditions are normal. If there is...
- Q An investment offers the following cash flows: $100 today, $550one year from now, $550 in 2 years, and $750 in 3 years. If therelevant interest rate is 8% per year...
- Q PLEASE NO COPIED OR HAND WRITTEN ANSWERSDescribe what directly impacts the cash flow of a business?
- Q I will rateApproximately how long will it take to double your money if youget a 5.5%, 7.5%, or 9.5% annual return on your investment? Verifythe approximate doubling period with the...
- Q The calculation of after-tax cost of debt plays a role inmanaging capital costs. You have been asked to present a fewmatters related to Debt (Bond) financing to the Board ofDirectors.why...
- Q Why must amounts received in advance from customers bedeferred?a. The customer may not pay the entire balance dueb. The company receiving payment has not earned the amountc. The customer has...
- Q Question 1 16 MarksConsider a project with the following cash flows:Consider a project with the following cash flows:Year Cash Flow0 R17,5001 -80,5002 138,4253 -105,4554 30,030Required: 1.1.Fill in the following table:Cost...
- Q Two energy saving project have been identified by Company ABC.These potential projects are known as projectA and 8 . The projects require different investments and costs asindicated in the Table...
- Q Delta, United, and American Airlines announced purchases ofplanes on July 18 (7/18), February 12 (2/12), and October 7 (10/7),respectively. Delta United AmericanDateMarketReturnCompanyReturnDateMarketReturnCompanyReturnDateMarketReturnCompanyReturn7/12?.42?.63 2/8?.91 ?1.22 10/1.62 .40 7/13.00.32 2/9?1.01?1.22...
- Q Marcel Co. is growing quickly. Dividends are expected to grow ata 19 percent rate for the next 3 years, with the growth ratefalling off to a constant 7 percent thereafter. Required:If...
- Q An asset used in a 4-year project falls in the 5-year MACRSclass (MACRS Table) for tax purposes. The asset has an acquisitioncost of $18,180,000 and will be sold for $4,040,000...
- Q How did Target (TGT) Company respond during the 2008 recession?What should they have done better?
- Q What is meant by the court’s deference to Treasury Regulations?What is the most recent Supreme Court case to speak to the issue(include a proper citation)? What did the court conclude?...
- Q You have looked at the current financial statements for ReigleHomes, Co. The company has an EBIT of $2,890,000 this year.Depreciation, the increase in net working capital, and capitalspending are expected...
- Q What are the major public policy issues in pricing? Does Amazonpractice predatory pricing or just good competitive marketing?Please write atlease 350 words...
- Q 12). Zen Inc. manufactures two types of products, the G1 and theT1 model airplane. The manufacturing process consists of twoprincipal departments: production and assembly. The productiondepartment has 58 skilled workers,...
- Q Ice Cream Sandwich Co. expects EBIT of $300,000 every yearforever. Ice Cream Sandwich Co. currently has no debt and its costof equity is 20%. The firm can borrow at 5%....
- Q Lexmark Corporation is considering leasing a new equipment. Thelease lasts for 8 years. The lease calls for 8 payments of $109,000per year with the first payment occurring immediately. Theequipment would...
- Q Mattel, Inc. has decided to acquire a new equipment at a cost of$760,000. The equipment has an expected life of 6 years and will bedepreciated using 5-year MACRS with rates...
- Q Explain what technical analysis is and how you can use it tomake an investment decision. Please provide examples to illustrateyour points and any website visited.
- Q Name at least two changes brought about by Sarbanes Oxley (SOX)Act of 2002.
- Q 1.) Volbeat Co. has bonds on the market with 10.5 years tomaturity, a YTM of 6.2%, a par value of $1,000, and a current priceof $945. The bonds make semiannual...
- Q John Claire, the CFO of Projection Investment Ltd, isconsidering twomutually exclusive projects.YearCash Flow (X) $’000Cash Flow (Y) $’0000-40,000-40,000119,0004,000215,20012,600312,40014,90046,00028,000In each case, show your calculation clearly.a If he applies the payback criterion,...
- Q Consider the following information for Evenflow Power Co.,Debt: 2,500 bonds that each year pay 8 percent of par value asan annual coupon, have a $1,000 par value, and a yield...
- Q Take it to the BankDaryl Bank is an investment broker with Bank, Tank, & Shanka full service financial services firm serving the regional area ofsouthern West Virginia. From the corporate...
- Q Great Harvest Logistics Ltd is a fully-equity-funded companywith a market value of $650 million and five million sharesoutstanding. The company’s CFO Lewis Taylor is forecasting threedifferent scenarios for the economic...
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