Finance question and answers for August 26, 2023
- Q Han Products manufactures 40,000 units of part S-6 each year foruse on its production line. At this level of activity, the cost perunit for part S-6 is:Direct materials$3.30Direct labor12.00Variable manufacturing...
- Q You plan to retire after 30 years. After that, you need $200,000per year for 10 years (first withdrawal at t=31). At the end ofthese 10 years, you will enter a...
- Q Ho to calculate receivable collection period, payables deferralperiod, and cash conversation period for P&G 2016, 2017,2018.http://financials.morningstar.com/income-statement/is.html?t=PG®ion=usa&culture=en-UShttp://financials.morningstar.com/balance-sheet/bs.html?t=PG®ion=usa&culture=en-UShttp://financials.morningstar.com/cash-flow/cf.html?t=PG®ion=usa&culture=en-US
- Q Use Huff’s law to compute the probability of consumers travelingfrom their homes to each of three shopping areas:Square footage of selling space:Location 1 = 15,000Location 2 = 20,000Location 3 =...
- Q Management of Cullumber Mints, a confectioner, is consideringpurchasing a new jelly bean-making machine at a cost of $312,500.They project that the cash flows from this investment will be$134,000 for the...
- Q Your firm should raise $2 million so that the firm can make moreprofitable investments in inventory and fixed assets. This $2million investment will more than triple their capacity. The NPVfor...
- Q Bulldog Memorabilia, a small screen printing firm, isconsidering investing in new technology that allows customers todesign their own products online, then they are automaticallyprinted and shipped with only minimal labor...
- Q A call option with a current value of $6.20. A put option with acurrent value of $7.90. Both options written on the same stock,with 1 year until expiration, and a...
- Q Debt: 4,000, 7% semiannual coupon bonds outstanding, $1,000 parvalue, 18 years to maturity, selling for 102 percent of par; thebonds make semiannual payments.Preferred Stock: 10,000 outstanding with par value of$100 and...
- Q Explain how tax credits differ substantially from tax deduction.Explain which one provides the most tax benefit to taxpayers andwhy.
- Q An Initial Public Offering (IPO) is a major milestone for acompany. This is a very expensive and time-consuming process. Itdoes not come without a lot of forethought and judicial weighing...
- Q A firm has purchased for $14,000 a machine with a five yearuseful life. The machine will bedepreciated using ADS on a three-year depreciation schedule. Theuniform annual benefits are$3600. The firm’s...
- Q How can I compare the weekly performance of 2 stocksonline?I am looking for CNI ( canadian national rail) vs CP ( Canadianpacific)
- Q elaborate on the concept of compounding. Discuss how tocalculate the net present value and the significance of thisindicator for decision.
- Q one-page paper about what are project risks companies consider whendeciding to enter and invest into new markets and how a companymanages and reduces those risks.nothing further to add
- Q The pure expectations theory, or the expectations hypothesis,asserts that long-term interest rates can be used to estimatefuture short-term interest rates.Based on the pure expectations theory, is the followingstatement true or...
- Q Danielsen's has 15,000 shares of stock outstanding and projectedannual free cash flows of $48,200, $57,900, $71,300, and $72,500for the next four years, respectively. After that, the cash flowsare expected to...
- Q A store has 5 years remaining on its lease in a mall. Rent is$2,000 per month, 60 payments remain, and the next payment is duein 1 month. The mall's owner...
- Q 1. Suppose that you are just about to retire,and you just turned 65. Your personal and family health history issuch that you forecast that you will live to age 88.In...
- Q In the Dave Ramsey: Wealth Building and Compound Interest video,approximately how much less did Arthur have at age 65 by beginninginvesting just 8 years later than his brother Ben?
- Q CORPORATE VALUATIONDantzler Corporation is a fast-growing supplier of officeproducts. Analysts project the following free cash flows (FCFs)during the next 3 years, after which FCF is expected to grow at aconstant...
- Q Table 1 provides projected financial statement values for Firm X(a firm that you work for as a treasury analyst). Calculate thechange in operating cash flow that would result if managementimplemented...
- Q Given infoStudent loanAnnual 146674 year total 58558Interest 4.45%HomeBuying home in 7 years which is 4 years after graduation30 year mortgage fixed interest 4.37%House is 450kwith 15% downpaymentCost of livingUtilities monthlyElectric...
- Q Part ABennett Co. has a potential new project that is expected togenerate annual revenues of $260,300, with variable costs of$143,200, and fixed costs of $60,700. To finance the new project,the...
- Q National Business Machine Co. (NBM) has $5.1 million of extracash after taxes have been paid. NBM has two choices to make use ofthis cash. One alternative is to invest the...
- Q Part AA new project has an initial cost of $142,000. The equipmentwill be depreciated on a straight-line basis to a book value of$45,000 at the end of the four-year life...
- Q Suppose that the current spot exchange rate of the EUR is USD1.15 / EUR and the 3-month forward exchange rate is USD $1.10 /EUR. The 3-month interest rate is 6%...
- Q Richard and Linda Butler decide that it is time to purchase a?high-definition (HD) television because the technology has improvedand prices have fallen over the past 3 years. From their? research,they...
- Q how you would measure the cost of equity for investmentprojects.
- Q Aria Acoustics, Inc., (AAI) projects unit sales for a newseven-octave voice emulation implant as follows:YearUnit Sales1113,0002132,0003120,0004103,000589,000Production of the implants will require $2,250,000 in net workingcapital to start and additional net...
- Q This week the lesson is Financial Planning. The text focuses ontwo approaches for coming up with an answer to the same question;how much external financing will be needed next year....
- Q National Scan, Inc., sells radio frequency inventory tags.Monthly sales for a seven-month period were as follows:MonthSales(000)UnitsFeb.19Mar.22Apr.8May.24Jun.19Jul.27Aug.22b. Forecast September sales volume using each of thefollowing:(1) A linear trend equation.(Round your intermediatecalculations...
- Q What is a P/E ratio, and why is it important in stock valuation?Choose a company stock, and discuss its P/E ratio. Do you believethe P/E ratio provides an accurate assessment...
- Q Yolanda and Mack are negotiating a contract deal for sale ofgoods. Yolanda offers Mack $2 per pound for Mack’s peanuts. Mackwants to sell them for $2.50. Under UCC, what happens...
- Q The price of Build A Fire Corp. stock will be either $61 or $86at the end of the year. Call options are available with one year toexpiration. T-bills currently yield...
- Q Suppose your firm is considering investing in a project with thecash flows shown below, that the required rate of return onprojects of this risk class is 11 percent, and that...
- Q Combined Communications is a new firm in a rapidly growingindustry. The company is planning on increasing its annual dividendby 24 percent a year for the next 4 years and then...
- Q What countries want to invest in Japan? Why or Why not? supportyour answer with research.
- Q You have just signed a 5-year contract with the ABB Group, aworld-famous Engineering Consulting firm. Your compensationincludes a $10,000 signing bonus payable today and monthly paymentsof $6000 at end of...
- Q Havana, Inc., has identified an investment project with thefollowing cash flows. If the discount rate is 9 percent, what isthe future value of these cash flows in Year 5?(Hint: Be...
- Q Empire ElectricCompany (EEC) uses only debt and common equity. It can borrowunlimited amounts at an interest rate of rd = 11% aslong as it finances at its target capital structure,...
- Q Pear Orchards is evaluating a new project that will requireequipment of $237,000. The equipment will be depreciated on a5-year MACRS schedule. The annual depreciation percentages are20.00 percent, 32.00 percent, 19.20...
- Q In 20X5 MyEducator had sales of $5,521 (in millions), EBIT of$1,720 (in millions), and net income of $528 (in millions). ItsDOL, DFL, and DCL are 3.21, 3.26 and 10.46, respectively....
- Q MNO Corp. has a market capitalization of $13,500,000 and has500,000 shares outstanding. MNO currently pays a $2 per-sharedividend. Bob currently owns 100 shares of MNO. Answer thefollowing questions. Assume no...
- Q Promo Pak has compiled the following financial data: Source ofCapital Book Value Market Value Cost Long-term debt $ 10,000,000 $12,000,000 6.0% Preferred stock 1,000,000 1,200,000 12.0 Commonstock equity 12,000,000 15,000,000...
- Q What are the variety of capital budgeting tools including netpresent value (NPV), internal rate of return (IRR), payback period,and profitability index (PI). Only evaluate the incremental changesto cash flows.Use an...
- Q Suppose your firm is considering investing in a project with thecash flows shown below, that the required rate of return onprojects of this risk class is 11 percent, and that...
- Q What are the five stages of industry life cycles? Choose fiveindustries that you believe represent each part of the cycle, andexplain why each industry may fall under each respective stage....
- Q Nemesis, Inc., has 250,000 shares of stock outstanding. Eachshare is worth $88, so the company’s market value of equity is$22,000,000. Suppose the firm issues 62,000 new shares at thefollowing prices:...
- Q Ying Import has several bond issues outstanding, each makingsemiannual interest payments. The bonds are listed in the followingtable. If the corporate tax rate is 33 percent, what is theaftertax cost...
- Q Tim has preferences over consumption in period 1 and 2 of theform . The price of consumption is $1 in both periods. He has$10,000 in the bank now and is...
- Q 9) Rohan used a fixed installment loan from his bank to buy newliving room furniture. He borrowed $9250 and has 48 monthlypayments of $230.19 each. a. Find the APR of...
- Q Boeing Corporation has just issued a callable? (at par)?three-year,5.3 %coupon bond with? semi-annual coupon payments. The bond can becalled at par in two years or anytime thereafter on a couponpayment...
- Q 1. An increase in the share price may be the result of theinformation problem when...a.markets become too focused on short term results.b.actual accounting information exceeds the market'sexpectations.d.there is a large...
- Q The treasurer of Amaro Canned Fruits, INC., has projected thecash flows of projects A, B, and C as followsYearProject AProject BProject C1-100,000-200,000-150,000260,000130,000110,000360,000130,000110,000Suppose the cost of capital is 10percent and Amaro’s...
- Q What could Lehman Brothers have done to address its Liquidityconcerns, which initiated the run on the bank?
- Q What is the PV of $100 per year for 5 years with a lump sum inyear 5 of $1,000 if the rate is 5%
- Q A project requires an initial investment of $100,000 and isexpected to produce a cash inflow before tax of $27,300 per yearfor five years. Company A has substantial accumulated tax lossesand...
- Q Marsha Jones has bought a used Mercedes horse transporter forher Connecticut estate. It cost $41,000. The object is to save onhorse transporter rentals.Marsha had been renting a transporter every other...
- Q What do the words “term”, “decreasing” or “declining term”, and“whole life” mean with respect to life insurance?
- Q You hold a portfolio of US Treasuries with a roughly even splitbetween 1 year, 5 year and 10-year bonds (these are the years tomaturity as of now). Assume that all...
- Q Go to the local library or use the Internet to research howlarge firms, especially corporations, are rewarding employees whohave entrepreneurial skills.Pick a company and answer the followingquestions: a. Why is...
- Q what is discount, discounting with resourse and without resourseand their example
- Q As a result of improvements in product engineering, UnitedAutomation is able to sell one of its two milling machines. Bothmachines perform the same function but differ in age. The newermachine...
- Q Question: Howell Corporation produces an executive jet for whichit currently manufactures a fuel valve; the cost of the valve isindicated below: Cost per Unit Variable costs Direct material $960Direct labor...
- Q Pension funds pay lifetime annuities to recipients. If a firmremains in business indefinitely, the pension obligation willresemble a perpetuity. Suppose, therefore, that you are managing apension fund with obligations to...
- Q Find the duration of a bond with settlement date June 15, 2018,and maturity date December 23, 2027. The coupon rate of the bond is9%, and the bond pays coupons semiannually....
- Q You took out a loan to buy a new car. The monthly interest rateon the loan is 1%. You have to pay $270 every month for 60months.Attempt 1/5 for 8...
- Q Stuart Electronics is considering investing in manufacturingequipment expected to cost $350,000. The equipment has an estimateduseful life of four years and a salvage value of $ 22,000. It isexpected to...
- Q Please provide specific Excel functions =NPV(…),=IRR(…), =AVERAGE(…), =YIELD(…) whenever applicable.Given the following information for Bajor Co.:Debt: Bajor’s long-term debt capital consists of bondswith 6.250 percent coupon rate (semiannual coupon payments),...
- Q Explain the main functions of budgeting with examples from yourorganization.(500 WORDS)
- Q Risk and ReturnPlease respond to thefollowing:Determine whether stock pricesare affected more by long-term or short-term performance. Provideone example of the effect that supports your claim.
- Q Use the followinginformation to answers questions 17 to26. (LongAnswer/Essay – primarily Chapter 13 but includes concepts from manychapters) You are the CFO of Micro Spinoff Inc. The company has 3,000,000 sharesof...
- Q Explain the critical assumptions that underpin the Capital assetpricing model (CAPM).(500 WORDS)
- Q Assume that Atlas Sporting Goods Inc. has $850,000 in assets. Ifit goes with a low-liquidity plan for the assets, it can earn areturn of 16 percent, but with a high-liquidity...
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