Finance question and answers for July 11, 2023
- Q You decide to invest in a portfolio consisting of 25 percentStock A, 25 percent Stock B, and the remainder in Stock C. Based onthe following information, what is the expected...
- Q One year? ago, your company purchased a machine used inmanufacturing for $105,000. You have learned that a new machine isavailable that offers many? advantages; you can purchase it for$170,000 today....
- Q Compare Amazon Lite with Mutual Insurance using the followingbalance sheet information and calculate their WACC. Amazon CurrentAssets $2,000,000 Current Liabilities $1,000,000 Fixed Assets$7,000,000 Long-term Liabilities $5,000,000 Total Assets $9,000,000Owners Equity...
- Q Paul Altero has gone public with his Bubbakoos Buritosrestaurant chain. His current capital structure is as follows:10,000 shares of common stock at $20 per share at a cost of 14%;3,200...
- Q Pro Physical Therapy is considering purchasing a new machinethat will allow them to do preliminary MRIs for their patients.This project will require an initial outlay of $78,635. The machinewill have...
- Q The current price of a non-dividend paying stock is $35. Use atwo-step tree to value an American put option on the stock with astrike price of $33 that expires in...
- Q Consider a corporation with a marketvalue of $100 million. The form has a zero- coupon bond with anaggregate Face value of $100 million due in one year. Thevolatility of the...
- Q Describe buying on margin.
- Q Project L costs $35,000, its expected cash inflows are $10,000per year for 8 years, and its WACC is 9%. What is the project'sdiscounted payback? Do not round intermediate calculations. Roundyour...
- Q how excess capacity impacts the planning process of financialforecasting.
- Q Tom purchased 100 shares of Dalia Co. stock at a price of$125.01 four months ago. He sold all stocks today for $125.13.During the year the stock paid dividends of $6.32...
- Q Masters Machine Shop is considering a four-year project toimprove its production efficiency. Buying a new machine press for$430,000 is estimated to result in $172,000 in annual pretax costsavings. The press...
- Q Meadow Brook Manor would like to buy some additional land andbuild a new assisted living center. The anticipated total cost is$25 million. The CEO of the firm is quite conservative...
- Q Suppose today a mutual fund contains 2,000 shares of JPMorganChase, currently trading at $65.75, 1,000 shares of Walmart,currently trading at $64.10, and 2,500 shares of Pfizer, currentlytrading at $32.50. The...
- Q You just borrowed $10,000 from the crooked bank at 10% withmonthly payments for 60 months. you had to pay an origination feeof $250 at the time you borrowed the money....
- Q I need detailed long answer, more than 1 page, withreferences.True/ False - On average, acquisitions destroyshareholder valueIdentify a corporate acquistion (within the last 10 years)which added value to the acquiring...
- Q Given the financial statements for Jones Corporation and SmithCorporation: JONES CORPORATIONCurrent AssetsLiabilitiesCash$21,400Accounts payable$121,000Accounts receivable86,100Bonds payable (long term)89,700Inventory55,100Long-Term AssetsStockholders' EquityGross fixed assets$526,000Common stock$150,000Less: Accumulated depreciation151,300Paid-in capital70,000Net fixed assets*374,700Retained earnings106,600Total assets$537,300Total liabilities and...
- Q year 0year 1year 2year 3year 4cashflow for S-10040503030cashflow for L-10010105090If the company's cost of capital is 5% and the decision is madeby choosing the project with the higher IRR, how...
- Q Assume these are the stock market and Treasury bill returns fora 5-year period:YearStock Market Return (%)T-Bill Return (%)2011?36.532.10201229.100.60201316.460.1620141.580.08201516.860.10a. What was the risk premium on common stock ineach year? (Do not...
- Q 1) List sources of variances between budgeted and actualamounts2) Describe the concept of zero-based budgeting.
- Q Your company is currently considering two investment projects.Each project requires an upfront expenditure of $25 million. Youestimate that the cost of capital is 10% and the investments willproduce the following...
- Q Value and Returns A stock has an expected dividend yield of 3.8%a price today of $30 and an expected sale price in one year of $33.The stock has a beta...
- Q A General Power bond carries a coupon rate of 9.4%, has 9 yearsuntil maturity, and sells at a yield to maturity of 8.4%. (Assumeannual interest payments.)a. What interest payments do...
- Q The market and Stock J have the following probabilitydistributions:ProbabilityrMrJ0.312%20%0.4870.31713Calculate the expected rate of return for the market. Round youranswer to two decimal places.Calculate the expected rate of return for Stock...
- Q Solo Corp. is evaluating a project with the following cashflows:YearCash Flow0–$47,000116,900220,300325,800419,6005–9,500The company uses a discount rate of 11 percent and areinvestment rate of 8 percent on all of its projects.a.Calculate...
- Q 1. On January 15, 1990, you constructed a portfolio consistingof 1,000 shares of General Electronics, 500 shares of Boeing, and1,500 shares of Microsoft. You close the portfolio by selling allshares...
- Q Your company has two? divisions: One division sells software andthe other division sells computers through a direct sales? channel,primarily taking orders over the internet. You have decided thatDell Computer is...
- Q Alyeska Salmon Inc., a large salmon canning firm operating outof Valdez, Alaska, has a new automated production line project itis considering. The project has a cost of $300,000 and is...
- Q A proposed new project has projected sales of $189,000, costs of$91,000, and depreciation of $25,000. The tax rate is 23 percent.Calculate operating cash flow using the four different approaches.(Do not...
- Q 15. Problem 11.20 (NPV)A project has annual cash flows of $7,500 for the next 10 yearsand then $9,500 each year for the following 10 years. The IRR ofthis 20-year project is...
- Q A company currently pays a dividend of $3.75 per share (D0 =$3.75). It is estimated that the company's dividend will grow at arate of 22% per year for the next...
- Q Consider a project to supply Detroit with 27,000 tons of machinescrews annually for automobile production. You will need an initial$6,000,000 investment in threading equipment to get the projectstarted; the project...
- Q You are considering a new product launch. The project will cost$2,400,000, have a four-year life, and have no salvage value;depreciation is straight-line to zero. Sales are projected at 350units per...
- Q The bonds issued by Bluefish Incorporated have a 7.0 percentcoupon, payable semiannually. The bonds mature in 10 years and havea $1,000 face value. Currently, the bonds are quoted at 98.9...
- Q A company currently pays a dividend of $2.25 per share (D0 =$2.25). It is estimated that the company's dividend will grow at arate of 17% per year for the next...
- Q Explain what obligations the U.S. government has towards itscitizens How can these obligations impact individual and grouprights? Provide real-world examples to support yourexplanation.
- Q Consider two mutually exclusive new product launch projects thatNagano Golf is considering. Assume the discount rate for bothproducts is 12 percent. Project A:Nagano NP-30. Professional clubs that will take an initial investment...
- Q Examine the following book-value balance sheet for UniversityProducts Inc. The preferred stock currently sells for $30 per shareand pays a dividend of $3 a share. The common stock sells for...
- Q The probability distributions of possible returns for Stocks Xand Y are as follows:EconomicState Probability X YRecession 0.2 -15% -5%Normal 0.6 20% 15%Boom 0.2 30% 25%Calculate the expected return on each stock. Show yourcalculations. (8 points)Calculate the standard deviation for each stock. Show...
- Q A new computer system will require an initial outlay of $17,000,but it will increase the firm’s cash flows by $3,400 a year foreach of the next 7 years.a. Calculate the...
- Q Calculate the value of Mexican Peso in Japanese Yen (Cross FXrate) based on the following information. o $0.07/peso and$0.0091/yen.
- Q Digital Fruit is financed solely by common stock and hasoutstanding 38 million shares with a market price of $20 a share.It now announces that it intends to issue $290 million...
- Q 16. Problem 11.21 (MIRR)Project A costs $4,000, and its cash flows are the same in Years1 through 10. Its IRR is 16%, and its WACC is 9%. What is theproject's MIRR?...
- Q Ten years ago a XYZ stock paid a $0.30 dividend. Since then ithas split two for one three times and three for two twice. XYZcurrent earnings per share are $1.40,...
- Q 1.You are a financial analyst at HE PLC and are evaluating a setof risky investment project, some features of which are notedbelow:Project IDInvestment OutlayPresent Value of Future Cash FlowsA14001875B22502800C21001800D32504425E42005500The investment...
- Q McGilla Golf is evaluating a new line of golf clubs. The clubswill sell for $970 per set and have a variable cost of $435 perset. The company has spent $150,000...
- Q Last year Blease Inc had a total assets turnover of 1.33 and anequity multiplier of 1.75. Its sales were $205,000 and its netincome was $10,600. The firm finances using only...
- Q Develop an amortization schedule for a 5-year loan of $25,000 atan interest rate of 7.5%, assuming equal annual installments at theend of each year. Use the same format that we...
- Q Scenario Modeler’s prospective stock has a 15% chance ofproducing a 65% return, a 25% chance of producing a 22% return, a40% chance of producing a 7% return, and a 20%...
- Q CAPM andexpected? returns..a.??Given the following? holding-periodreturns, compute the average returns and the standard deviationsfor the Zemin Corporation and for the market.b.??If? Zemin's beta is 1.88 and the? risk-freerate is 7...
- Q When using forward contracts, is the current spot rate betweenthe two currencies relevant? Is the future, actual spot rate (whenthe forward contract matures) between the two currenciesrelevant?
- Q Details of McCormick Plant Proposal McCormick & Company isconsidering a project that requires an initial investment of $24million to build a new plant and purchase equipment. The investmentwill be depreciated...
- Q QUESTION 21Bravossi Inc. has two projects with the following cashflows:YearProject 1Project 20(3,000.00)(2,400.00)11,000.001,500.002??800.0031,500.00??41,800.001,400.00IRR26.2307%33.8369%What is the crossover rate?a.8.4261%b.8.2041%c.7.6739%
- Q QUESTION 25The top management of Everest Manufacturing wanted to know howwell the company is managing its accounts receivable (AR) comparedto its peers. The management gathered the following informationfrom the aging...
- Q explain the importance of financial literacy in both in yourlife and your or other people' s career. Also explain how topromote financial empowerment within a community.
- Q We are examining a new project. We expect to sell 6,300 unitsper year at $57 net cash flow apiece for the next 10 years. Inother words, the annual operating cash...
- Q A 30-year maturity bond makes annual coupon payments and has acoupon rate of 8%. What are the bond’s current yield and yield tomaturity if the bond is selling for:a. $900...
- Q 4.The cash flows of a firm that has just conducted an InitialPublic Offering (IPO) are expected to be either £10 million perannum for 10 years and zero afterwards with probability‘p’...
- Q A Sunfish bond is paying 10 percent interest for 20 years on asemiannual basis. Assume interest rates in the market (yield tomaturity) decline from 12 percent to 8 percent: (Use...
- Q Identify five key processes that are considered the mostsignificant financial issues that must be planned, controlled, andmanaged for a plan to be successful.
- Q Module 4 Worksheet—Chapters 6 & 7Please complete the problems in Excel on this worksheet andupload to the drop box for module 4 no later than Sunday, 11:55PM.Don’t round – use...
- Q A friend wants to retire in 30 years when he is 65. At age 35,he can invest $500/month that earns 6% each year. But he isthinking of waiting 15 years...
- Q Please show all work, calculation, or explanationto receive full credit and circle the correctanswer.Use the following Information to Answer Problems 1and 2Bradford Services Inc. (BSI) is considering a projectthat has...
- Q You deposit $4,000 in the bank at the end of each yearfor 30 years. If the bank pays interest of 5.25% per annum, whatamount will you have accumulated if interest...
- Q Halliford Corporation expects to have earnings this coming yearof $3.297 per share. Halliford plans to retain all of its earningsfor the next two years.? Then, for the subsequent two? years,...
- Q You take out a mortgage in the amount of $200,000 for30 years at a rate of 5.75%:a. What is the monthly payment amount?b. How much interest will you pay over...
- Q A couple has just purchased a home for $314,100.00. They willpay 20% down in cash, and finance the remaining balance. Themortgage broker has gotten them a mortgage rate of 3.72%...
- Q One year ago you bought a share of Bavarian Sausage stock for$46.50. During the year the stock paid a $2.75 dividend. You havedecided to sell the stock exactly one year...
- Q You deposit $10,000 in a certificate of deposit thatpays interest of 4.25% per annum.What amount will your deposit grow to after five yearsif the bank compounds interest:a. Annuallyb. Semi-Annuallyc. Quarterlyd....
- Q You purchased a bond last year that pays an 8% annual couponwith a face value of $1,000. At the time of purchase, the bond hada yield to maturity of 10%...
- Q Consider the following simplified financial statements for theWims Corporation (assuming no income taxes)Income StatementBalance Sheet Sales$45,700 Assets$21,900 Debt$5,900 Costs40,100 Equity16,000 Net income$5,600 Total$21,900 Total$21,900The company has predicted a sales increase of 6 percent. Assumethe company pays out half...
- Q The Litzenberger Company has projected the following quarterlysales amounts for the coming year: Q1 Q2 Q3 Q4 Sales $ 790 $ 820 $900 $ 980 a. Accounts receivable at the...
- Q Please could you show full steps and no excelpleaseMiss M had R100,000 to invest in the financial market. She choseto invest R10,000 in Asset A, which returned 12.0%; R40,000 inAsset...
- Q Consider a stock with a beginning of the year price of 21. Thestock's dividends and quarterly stock price are as follows:QuarterDividendEnd of period stock price.1123222231224122The effective annual yield on this...
- Q An investment in the Bosworth Closed-end Fund produced thefollowing results:DateValue per shareDividend paid to investorsEnd of Year 0$20End of Year 1$23$1.5End of Year 2$23$1End of Year 3$23$1.9What is the time-weighted...
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