Finance question and answers for July 03, 2023
- Q Chapman Machine Shop is considering a 4-year project to improveits production efficiency. Buying a new machine press for $576,000is estimated to result in $192,000 in annual pretax cost savings.The press...
- Q How do you build business credit when you have poor personalcredit?
- Q 33. Which of the following is the correct calculation of thepremium over conversion value?a. market price minus parvalueb. market price minus conversionratioc. market price minusconversion valued. market price minus stockprice35. A bond has a...
- Q Suppose a firm’s tax rate is 35%. a. What effect would a $7million operating expense have on this year’s earnings? What effectwould it have on next year’s earnings? b. What...
- Q In exchange for a $400 million fixed commitment line of credit,your firm has agreed to do the following: Pay 1.84 percent perquarter on any funds actually borrowed. Maintain a 2...
- Q EssaySelection of Asset Portfolio by Markowitz model
- Q Suppose that you have $1,000 at hand that you can place in abank gaining 5% annually in interests; assume that this interestrate is your personal discount rate. Your friend asks...
- Q Control Inc., has no debt outstanding and a total market valueof $100,000. EBIT is projected to be $6,000 if economic conditionsare normal. If there is a strong expansion in the...
- Q 2. PC Calculators sell calculators that it purchases for $15each. It costs PC $60 each time calculators are ordered, andcarrying costs are 20% of the calculator's purchase price. Annualdemand is...
- Q This is the exact post of the assignment i double checked thenumbers and everything is correctTough Steel, Inc. is a processor of stainless steel products.The firm is considering replacing an...
- Q 1. (NPV and IRR? calculation)East Coast Television isconsidering a project with an initial outlay of? $X (you will haveto determine this? amount). It is expected that the project willproduce a...
- Q A firm can be worth $90 or $310 with equal probability. Thefirm?s debt consists of a zero -coupon bond with a face value of$180 that matures at the end of...
- Q (Please shoe work for c, d, and e. Thank you)Currently, Meyers Manufacturing Enterprises (MME) has a capitalstructure consisting of 35% debt and 65% equity. MME's debtcurrently has a 6.5% yield...
- Q 1) A project has the following information. Price is $62 perunit, variable cost is $41 per unit, fixed costs is $15500,required return is 12%, initial investment $24000, project life is4...
- Q In a perfect world, if the firm value is $76 under thedebt-laden capital structure (say $70+$6), but the managers chosethe $75 capital structure (say, all equity), what would you do?
- Q ABC and XYZ are two identical firms except for their capitalstructure. The share price for both of firms is $10. ABC is an allequity firm. XYZ has D/E of 0.8....
- Q 1. Michael's Mechanical sells 6,000 jettison machinesannually. Each machine costs Michael's $2000 to purchase, inventorycarrying costs are 30% of the purchase price, and the cost ofplacing an order with its...
- Q Consider a bond with market value $92.37 (face value = $100) anda coupon of $5.059 dollars paid every six months (Semi-annually -December and June). The time to maturity is 10...
- Q Use the following information for Ingersoll, Inc., (assume thetax rate is 40 percent): 20142015 Sales$9,535$10,109 Depreciation1,2951,296 Cost of goods sold2,8663,230 Other expenses809704 Interest695773 Cash4,2795,373 Accounts receivable5,6096,297 Short-term notes payable964916 Long-term debt15,33017,750 Net fixed assets36,15537,317 Accounts payable4,6564,355 Inventory9,84010,108 Dividends1,1261,221 For 2015, calculate the cash flow from...
- Q Project cash flow and NPV. The managers of ClassicAutos Incorporated plan to manufacture classic Thunderbirds (1957replicas). The necessary foundry equipment will cost a total of$4,200,000 and will be depreciated using...
- Q Companies invest in expansion projects with the expectation ofincreasing the earnings of its business. Consider the case of HappyDog Soap: Happy Dog Soap is considering an investment that willhave the...
- Q Hula Enterprises is considering a new project to produce solarwater heaters. The finance manager wishes to find an appropriaterisk adjusted discount rate for the project. The (equity) beta ofHot Water,...
- Q why dont we calculate the difference in the equity accountbetween the beginning and end of the year and consider thatdifference as a source or use of cash? why do we...
- Q The Hastings Sugar Corporation has the following pattern of netincome each year, and associated capital expenditure projects. Thefirm can earn a higher return on the projects than the stockholderscould earn...
- Q Calculate the durations and volatilities of securities A, B, andC. Their cash flows are shown below. The interest rate is 6%.(Do not round intermediate calculations. Round "Duration"to 4 decimal places...
- Q What are common methods of collecting and organizing prospectand account information
- Q Waller, Inc., is trying to determine its cost of debt. The firmhas a debt issue outstanding with 14 years to maturity that isquoted at 96 percent of face value. The...
- Q The Rivoli Company has no debt outstanding, and its financialposition is given by the following data:Assets (Market value = book value)$3,000,000EBIT$500,000Cost of equity, rs10%Stock price, Po$15Shares outstanding, no200,000Tax rate, T...
- Q What has been your experiences with static budget ?
- Q Information on Janicek Power Co., is shown below. Assume thecompany’s tax rate is 34 percent. Required: Calculate the company'sWACC.Debt: 8,600 7.9 percent coupon bonds outstanding, $1,000 parvalue, 24 years to...
- Q Problem 6-13Historical Realized Rates of ReturnStocks A and B have the following historical returns:Year2012-18.30%-15.70%201334.5024.80201415.0026.002015-4.25-12.10201632.2536.20Calculate the average rate of return for each stock during the5-year period. Round your answers to two...
- Q Fast Fitness Limited is a major retailer of fitness machines andaccessories. It is currently considering investing in a new storein Brisbane. The Brisbane store will have a lifespan of 20...
- Q WRE Energy Limited is a major oil and gas exploration company inWestern Australia. It currently has $300 million of market valuedebt outstanding, consisting of 9% coupon bonds with a maturity...
- Q AVER Ltd is considering short term financing for its workingcapital requirement. You are invited to provide a discussion on therisk-return trade-off that the company should consider in selectingdifferent sources of...
- Q AAA Corp. currently has one? product, high-priced lawn mowers.AAA Corp. has decided to sell a new line of? medium-priced lawnmowers. The building and machinery for producing this new line isestimated...
- Q 1. Future Value. what is the future value in six yearsof $1000 invested in an account with a stated annual interest rateof 9 percenta. compounded annually?b. compounded semi annually?c. compounded...
- Q Your firm has taken out a $549,000 loan with 8.1% apr(compounded monthly) for some commercial property. as is common incommercial real estate the loan is a 5 year loan based...
- Q Create an Excel spreadsheet to organize your answers tothe following problem, and submit your Excel file as an attachmentby clicking on the appropriate button on this page.A company with EBIT...
- Q Three six-month call options are traded on DigitalOrganics stock:How would you make money by trading in Digital Organicsoptions?Exercise PriceCall Option Price$90$5$100$11$110$15
- Q Assume your goal is to retire at age 65 and you estimate youwill live until age 90. Your income at age 30 is $50,000 and youexpect this to increase at...
- Q Miller Company’s contribution format income statement for themost recent month is shown below:TotalPer UnitSales (42,000 units)$294,000$7.00Variable expenses168,0004.00Contribution margin126,000$3.00Fixed expenses40,000Net operating income$86,000Required:(Consider each case independently):1. What is the revised net operating...
- Q Toxaway Company is a merchandiser that segments its businessinto two divisions—Commercial and Residential. The company’saccounting intern was asked to prepare segmented income statementsthat the company’s divisional managers could use to...
- Q 1) How do cost of funds and taxes affect decisions made byinvestors and the firm? Please explain 2) Since interest paymentsare fully deductible for tax purposes should a firm’s capitalstructure...
- Q Walsh Company manufactures and sells one product. The followinginformation pertains to each of the company’s first two years ofoperations:Variable costs per unit:Manufacturing:Direct materials$26Direct labor$13Variable manufacturing overhead$6Variable selling and administrative$5Fixed costs...
- Q step by step of all equations used and explanations claearly. (a) Suppose Carter ChemicalCompany's management conducts a study and concludes that if Carterexpands its consumer products division (which is less risky...
- Q Miller Company’s contribution format income statement for themost recent month is shown below:TotalPer UnitSales (42,000 units)$294,000$7.00Variable expenses168,0004.00Contribution margin126,000$3.00Fixed expenses40,000Net operating income$86,000Required:(Consider each case independently):1. What is the revised net operating...
- Q Determine two goals (one short term and one long term) that youwish to achieve(you can make up fictional ones if you wish).Explain how you will achieve them and what length...
- Q Talia’s Tutus is considering purchasing a new sewing machine.The old machine it has right now was bought 2 years ago for$30,000, with an assume life of 6 years and an...
- Q Weiland Co. shows the following information on its 2016 incomestatement: sales = $158,500; costs = $80,800; other expenses =$4,100; depreciation expense = $9,800; interest expense = $7,300;taxes = $19,775; dividends...
- Q According to John Connors, former CFO of Microsoft, how does acompany decide whether to increase its dividend, have a specialdividend, or repurchase its stock to return capital to investors?Be DETAILED...
- Q 1. The Short-Line Railroad is considering a $200,000investment in either of two companies. The cash flows are asfollows:YearElectric Co.Water Works1$100,000$50,000250,00050,000350,000100,0004 – 1025,00025,000a. Compute the payback period for both companies.(Round your...
- Q Address how a strong operating and capital budget process wouldassist achieving future financial goals (what tools might youemploy?). Explain why accurate cost allocation is important. Whatwould be the priorities for...
- Q 1. Oregon Forest Products will acquire new equipmentthat falls under the five-year MACRS category. The cost is$300,000. If the equipment is purchased, the following earningsbefore depreciation and taxes will be...
- Q ou are evaluating two different silicon wafer milling machines.The Techron I costs $276,000, has a three-year life, and has pretaxoperating costs of $75,000 per year. The Techron II costs $480,000,has...
- Q Using the financial statements for the Snider Corporation,calculate the 13 basic ratios found in thechapter. SNIDER CORPORATIONBalance SheetDecember 31, 20X1AssetsCurrent assets:Cash$58,700Marketable securities23,200Accounts receivable (net)230,000Inventory247,000Total current assets$558,900Investments64,100Plant and equipment.$695,000Less: Accumulateddepreciation216,000Net plant and...
- Q The state? lottery's million-dollar payout provides for ?$1?million(s) to be paid over 19 years in 20 payments of $ 50,000.The first $ 50,000 payment is made? immediately, and the 19remaining...
- Q A company recently paid a dividend of $1.20 per share. It isestimated that the company's dividend will grow at the rate of 15%per year for the next 5 years, then...
- Q The Saunders Investment Bank has the following financingoutstanding.Debt:10,000 bonds with a coupon rate of 11 percent and a currentprice quote of 109.5; the bonds have 20 years to maturity. 180,000zero...
- Q Suppose you have been hired as a financial consultant to DefenseElectronics, Inc. (DEI), a large, publicly traded firm that is themarket share leader in radar detection systems (RDSs). The companyis...
- Q Olsen Outfitters Inc. believes that its optimal capitalstructure consists of 65% common equity and 35% debt, and its taxrate is 40%. Olsen must raise additional capital to fund itsupcoming expansion....
- Q River Enterprises has ?$500 million in debt and 1818 millionshares of equity outstanding. Its excess cash reserves are $16million. They are expected to generate ?$206 million in free cashflows next...
- Q Herman Co. is considering a four-year project that will requirean initial investment of $7,000. The base-case cash flows for thisproject are projected to be $14,000 per year. The best-case cashflows...
- Q read about the wells fargo account fraud scandel then discuss theethical theories: utilitarinsim , kantian ethics, and virtue ethicsand apply them to wells fargos behavior.also, explain whether this story falls...
- Q Name and discuss two main goals of finance. Are these goalsmutually exclusive? Explain your answer.
- Q Seacera Tiles Corp is considering the followingaverage risk projects for its nextinvestment period:Project IRR (%) Investment (RM)A 11.90 2,000,000.00B 11.25 2,500,000.00C 12.17 3,000,000.00D 11.72 1,500,000.00E 11.03 2,000,000.00Seacera has 10,000 bonds...
- Q A European call option written on one share of Ponce de LeonFoods, Inc. has the following parameter values: S = $118, X = $108,r = 5% p.a., sigma = 21%...
- Q You are required to use a financial calculator or spreadsheet(Excel) to solve the following capital budgeting problem (samplequestions and solutions are provided for guidance): WindrunnerCorp. is considering a new machine...
- Q Arnell Industries has $ 30 million in permanent debtoutstanding. The firm will pay interest only on this debt.?Arnell's marginal tax rate is expected to be 30 % for theforeseeable future....
- Q Marlite Engineering would like to raise $ 10.0 million to investin capital expenditures. The company plans to issue? five-yearbonds with a face value of $ 1 000 and a coupon...
- Q Describe and discuss the advantages and disadvantages offinancing with long-term debt and prepare examples showing how toemploy financial leverage.
- Q The financial statements for Tyler? Toys, Inc. ?Calculate thecurrent? ratio, quick? ratio, and cash ratio for Tyler Toys for2013 and 2014. Should any of these ratios or the change in...
- Q XYZ Corp. is considering refunding its old debt now thatinterest rates have dropped.Old BondsNew BondsOriginal Life:10 Years5 YearsPar Value:1 Million1 MillionCoupon Rate:8 % annual6% annualCall premium10%Flotation Costs$40,000 original$45,000Age of Bonds5...
- Q Use Worksheet 8.1 Katie Holt is a 72-year-oldwidow who has recently been diagnosed with Alzheimer's disease. Shehas limited financial assets of her own and has been living withher daughter Laurie...
- Q Do you think Benjamin Strong would have agreed with thewords below spoken by Franklin Roosevelt in 1933?“The world will not long be lulled by the speciousfallacy of achieving a temporary...
- Q Holt Enterprises recently paid a dividend, D0, of$1.50. It expects to have nonconstant growth of 19% for 2 yearsfollowed by a constant rate of 3% thereafter. The firm's requiredreturn is...
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