Finance question and answers for August 30, 2023
- Q A pension fund manager is considering three mutual funds. Thefirst is a stock fund, the second is a long-term government andcorporate bond fund, and the third is a T-bill money...
- Q Your first assignment in your new position as assistantfinancial analyst at Caledonia Products is to evaluate two new?capital-budgeting proposals. Because this is your first?assignment, you have been asked not only...
- Q Anderson's Furniture Outlet has an unlevered cost of capital of10%, a tax rate of 34%, and expected earnings before interest andtaxes of $1,600. The company has $3,000 in bonds outstanding...
- Q 1. What is trade dress?2. What is the USDA? What is the purpose of the USDA?3. Define Bait and Switch?4. Describe an environmental impact statement and identify when oneis needed?5....
- Q Even though most corporate bonds in the United States makecoupon payments semiannually, bonds issued elsewhere often haveannual coupon payments. Suppose a German company issues a bond witha par value of...
- Q A firm is considering two projects, A and B. Each project willlast for 4 years. The projects are INDEPENDENT. The projected cashflows for each project are shown below:Year 0 1...
- Q 1. Ima Saver has $19702 in cash. She plans to but a new car infive years. Ima is highly certain that the car will cost $25702.Ima is shopping around for...
- Q Pfd Company has debt with a yield to maturity of 5.7%?, a costof equity of 13.5%?, and a cost of preferred stock of 8.7%. Themarket values of its? debt, preferred?...
- Q Consider the following capital structure for Sea ShoreCorporation. The company has a publicly-traded bond issue,preferred shares, and common equity in its capital structure. Thefirm’s tax rate is 35%. The risk-free...
- Q Starset Machine Shop is considering a 4-year project to improveits production efficiency. Buying a new machine press for $455,000is estimated to result in $187,000 in annual pretax cost savings.The press...
- Q A firm is considering an investment in a new machine with aprice of $17.2 million to replace its existing machine. The currentmachine has a book value of $6.9 million and...
- Q From discussions with your broker, you have determined that theexpected inflation premium is 1.35 percent next year, 1.50 percentin year 2, 1.75 percent in year 3, and 2.00 percent in...
- Q Name four characteristics of liquid assets. What are thedisadvantages of having too much or too little money held as liquidassets (provide two disadvantages for the two situations)?
- Q Why would a company issue bonds at a discount? What does thatmean for the Coupon Rate and why is that beneficial to the firmunder which circumstances?
- Q home / study / business / finance / finance questions andanswers / margaritaville hotel properties is opening a new beachresort in tybee island, ga at a cost ... Question: MargaritavilleHotel...
- Q You are evaluating two different silicon wafer milling machines.The Techron I costs $255,000, has a 3-year life, and has pretaxoperating costs of $68,000 per year. The Techron II costs $445,000,has...
- Q Winston Clinic is evaluating a project that costs $52,125 andhas expected net cash inflows of $12,000 per year for eight years.The first inflow occurs one year after the cost outflow,...
- Q A project will require $450,000 for fixed assets and $58,000 fornet working capital. The fixed assets will be depreciatedstraight-line to a zero book value over the five-year life of theproject....
- Q Using the data in the table to the? right, calculate the returnfor investing in the stock from January 1 to December 31. Pricesare after the dividend has been paid. Date...
- Q A closed-end fund starts the year with a net asset value of $22.By year-end, NAV equals $23.10. At the beginning of the year, thefund is selling at a 3% premium...
- Q GrowSustain Inc key information table:Payout Ratio - 0%Net Income - 25 millionBeginning Stockholders' Equity - 125 millionBeginning Total Assets - 200 millionEnd Total Assets - 180 millionUsing the information of...
- Q K. Higher is the discount rate, higher is the present value TrueOr FalseL. You want to buy a car for cash 4 years from now for a cashprice of $25000....
- Q 30. The speed of college tennis player Jaron Jackson’s firstserve averages 125 mph, with a standard deviation of 4 mph. If thedistribution of service speeds is normal, what proportion ofJaron’s...
- Q The Frontline Corporation's projected sales for the first 8months of 2019 are shown in the table below.Jan$ 190,000May$ 300,000Feb 120,000Jun 270,000Mar 135,000Jul 225,000Apr 240,000Aug 150,000Of Frontline's sales, 10% is for cash, 60% is...
- Q Your firm is contemplating the purchase of a new $480,000computer-based order entry system. The system will be depreciatedstraight-line to zero over its five-year life. It will be worth$30,000 at the...
- Q ABC Industries is considering an expansion project with cashflows of -$325,000, $67,500, $116,100, $110,500, and $152,700 foryears 0 through 4. Compute the IRR.
- Q Vedder, Inc., has 5 million shares of common stock outstanding.The current share price is $73, and the book value per share is $9.Vedder also has two bond issues outstanding. The...
- Q Under what economic forecast would you believe an automanufacturer would be a good investment? A computermanufacturer?
- Q Mr. Art Deco will be paid $260,000 one year hence. This is anominal flow, which he discounts at a nominal discount rate of 9%.PV = $260,000 / (1 + .09)...
- Q There are two alternative machines for a manufacturing process.Both machines have the same output rate, but they differ in costs.Machine A costs $20,000 to set up and $8,000 per year...
- Q (Financial forecastinglong dash—percent of sales?) Next? year'ssales for Cumberland Mfg. are expected to be ?$20.70 million.Current sales are ?$18 ?million, based on current assets of ?$6.00million and fixed assets of...
- Q Most sources report alphas and other metrics relative to astandard benchmark, such as the S&P 500. When might this methodbe an appropriate comparison?
- Q Unlike a normal mutual fund (MF) that holds a portfolio ofstocks, a money market mutual fund (MMMF) holds a portfolio ofmoney market instruments like Treasury Bills, highly ratedcommercial paper, and...
- Q Suppose the Ludic Ventures company has both debt and equitytrading in markets. The firm’s current market value of equity is$14,010,000 and the market value of its debt is $11,704,545. Assumethe...
- Q Walsh Company is considering three independent projects, each ofwhich requires a $6 million investment. The estimated internal rateof return (IRR) and cost of capital for these projects arepresented below:Project H...
- Q An investment project has annual cash inflows of $3,600, $4,500,$5,700, and $4,900, for the next four years, respectively. Thediscount rate is 15 percent. What is the discounted payback period for these...
- Q Youare attempting to arrive at what the monthly rate of change thathas recently occurred in the real estate market. In doing someresearch, you find two properties that have sold twice...
- Q Identify at least three problems that could lead to inaccurateprogress management. Also, provide an example of an alternative toearned value that you might use should project progress reportingsystems prove to...
- Q Chapter 3 problem #37.on pages88-89 Ratio computation and analysis (LO2)Given the financial statements forJones Corporation and Smith Corporation shown here: a. Towhich one would you, as credit manager for a supplier,...
- Q Define the word Equifinality. How is it reflected in anorganizational system? This information can be found in the Unit 2Read Section.
- Q Assume that in March of 2019 you buy a bond issued by acorporation that has a face of $10,000 and a coupon rate of 5%. Thebond will mature in March...
- Q e. What is an annuity? due? How does this differ from anordinary? annuity?
- Q *Excel formulas needed* A U.S.-based firm is considering a six-year project in Colombia. The following information is availableabout the project: Initial investment. The initial investment ofUSD 750,000 is used to...
- Q State of EconomyProbability of State of EconomyReturn on Stock JReturn on stock KBear.23-.013.041Normal.58.145.069Bull.19.225.099What is the Convariance and Correlation betweenthe returns of the 2 stocks?
- Q Your boss, the chieffinancial officer (CFO) for Southern Textiles, has just handed youthe estimated cash flows for two proposed projects. Project Linvolves adding a new item to the firm’s fabric...
- Q Walmart 2019Data from internetindividual analysis = security analysisComprising of stock valuationSWOTEstimating Intrinsic ValueDiscounted cash flowAnd dividend discount
- Q Discuss the importance and process of financial forecasting.Provide examples of both revenue and expense forecasting methods.please include mathematical equations for clarification whenappropriate.
- Q Sloan Transmissions, Inc., has the following estimates for itsnew gear assembly project: price = $1,600 per unit; variable costs= $320 per unit; fixed costs = $2.7 million; quantity = 78,000units....
- Q This particular company has an ROE of 13.25%, but an ROA of1.47%. It has 75.5% of its assets in Long-term Investments, andmost of the rest is in Cash and Cash...
- Q A company currently pays a dividend of $1.25 per share (D0 =$1.25). It is estimated that the company's dividend will grow at arate of 20% per year for the next...
- Q Pearl Corp. is expected to have an EBIT of $2,100,000 next year.Depreciation, the increase in net working capital, and capitalspending are expected to be $160,000, $90,000, and $130,000,respectively. All are...
- Q Tom Scott is the owner, president, and primary salesperson forScott Manufacturing. Because of this, the company's profits aredriven by the amount of work Tom does. If he works 40 hours...
- Q Desai Industries is analyzing an average-risk project, and thefollowing data have been developed. Unit sales will be constant,but the sales price should increase with inflation. Fixed costswill also be constant,...
- Q ABC Co. and XYZ Co. are identical firms in all respects exceptfor their capital structure. ABC is all equity financed with$650,000 in stock. XYZ uses both stock and perpetual debt;...
- Q A stock just paid a dividend of $2.32. The dividend is expectedto grow at 28.59% for five years and then grow at 4.24% thereafter.The required return on the stock is...
- Q Discuss the issue of capital investment in the health careindustry. When is it appropriate to consider purchasing versusleasing as an acquisition option? Is it always better to pursue oneoption versus...
- Q Johnson Industries finances its projects with 40 percent debt,10 percent preferred stock, and 50 percent common stock.·The company can issue bonds at a yield to maturity of 7.4percent.·The cost of...
- Q An analyst has collected the following information regardingChristopher Co.:·The company's capital structure is 70 percent equity, 30 percentdebt.·The yield to maturity on the company's bonds is 8 percent.·The company's year-end...
- Q Coupon payments are fixed, but the percentage return thatinvestors receive varies based on market conditions. Thispercentage return is referred to as the bond’s yield.1. Yield to maturity (YTM) is the...
- Q Consider the following information for Watson Power Co.: Debt:4,500 9 percent coupon bonds outstanding, $1,000 par value, 20years to maturity, selling for 104 percent of par; the bonds makesemiannual payments....
- Q 1. Arrange the following items in proper balance sheetpresentation:Accumulateddepreciation................................................$200,000Retainedearnings...................................................................110,000Cash...............................................................................................5,000Bondspayable..........................................................................142,000Accountsreceivable.................................................................38,000Plant and equipment—originalcost.................................. 720,000Accountspayable.......................................................................35,000Allowance for baddebts............................................................6,000Common stock, $1 par, 150,000 shares outstanding...150,000Inventory.......................................................................................66,000Preferred stock, $50 par, 1,000 sharesoutstanding.....50,000Marketablesecurities.................................................................15,000Investments................................................................................... .20,000Notespayable..................................................................................83,000Capital paid in excess of...
- Q Models that pertain to the distribution of a resource withinsupply chains are often referred to as networks. Distribution amongthese networks is key to the success of a business while alsokeeping...
- Q AdjustedWACC.??Clark? Explorers, Inc., an engineering? firm, has thefollowing capital? structure:??EquityPreferred StockDebtMarket Price?$56.14?$101.55?$954.28Outstanding units120,00014,0005,825Book value?$3,305,000?$1,438,000?$5,825,000Cost of capital15.81?%12.01?%10.9?%. Using market value and book value? (separately, of? course),find the adjusted WACC for Clark...
- Q Most personal injury claims are handled by attorneys on acontingent fee basis. In other words, the attorney receives anagreed percentage of the recovery. Is it likely that there would beless...
- Q A ________ is a sales transaction arranged by the seller tobenefit a buyer who pays an unreasonably low price for the itemsold.QUESTION 1A ________ is a sales transaction arranged by...
- Q 2. Discuss whether James Stewart’s assessment of eBay reflectsany psychological phenomena.
- Q You are given the following information for Huntington Power Co.Assume the company’s tax rate is 23 percent. Debt:28,000 4.7 percent coupon bonds outstanding, $2,000 par value,23 years to maturity, selling for...
- Q On average, a firm collects checks totaling $250,000 per day. Ittakes the firm approximately 4 days from the day the checks weremailed until they result in usable cash for the...
- Q Discuss the issue of capital investment in the health careindustry. When is it appropriate to consider purchasing versusleasing as an acquisition option? Is it always better to pursue oneoption versus...
- Q Three mutually exclusive investment alternatives are beingconsidered. The estimated cash flows for each alternative are givenbelow. The study period is 30 years and the? firm's MARR is 10?%per year. Assume...
- Q Briefly describe each of the following financial institutions:investment banks, commercial banks, financialservices corporations, pension funds, mutual funds, exchange tradedfunds, hedge funds, and privateequity companies
- Q Suppose that the one-year interest rate is 4.30% in Italy, thespot exchange rate is $1.5550/€1.00, and the one-year forwardexchange rate is $1.5979/€1.00. Based on interest rate parity, whatmust the one-year...
- Q Chapter 9 discusses the criteria/methods used to evaluate theproposed investments. In 500 words or more, discuss thefollowing:The best criterion to evaluate a project, and why?List other methods used to evaluate...
- Q Contrast the differences/similarities of common stocks andbonds. Explain how they would be used in the corporateenvironment.
- Q Firms try to define an optimal capital structure that minimizestheir cost of capital. Explain how leverage (debt) plays a key rolein determining the optimal mix.
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