Finance question and answers for July 13, 2023
- Q Problem 9-24 Project Analysis [LO 2]McGilla Golf has decided to sell a new line of golf clubs. Theclubs will sell for $731 per set and have a variable cost of...
- Q Problem 9-21 Cost-Cutting Proposals [LO 2] CSM Machine Shop isconsidering a four-year project to improve its productionefficiency. Buying a new machine press for $491,000 is estimated toresult in $190,000 in...
- Q Problem 9-21 Cost-Cutting Proposals [LO 2]CSM Machine Shop is considering a four-year project to improveits production efficiency. Buying a new machine press for $491,000is estimated to result in $190,000 in...
- Q Just Dew It Corporation reports the following balance sheetinformation for 2017 and 2018.JUST DEW IT CORPORATION2017 and 2018 Balance SheetsAssetsLiabilities and Owners’ Equity2017201820172018 Current assets Current liabilities Cash$11,250$19,440 Accounts payable$30,600$49,200 Accounts receivable11,85016,080 Notes payable24,90031,200 Inventory39,15060,240 Total$62,250$95,760 Total$55,500$80,400 Long-term debt$27,000$24,000 Owners’ equity Common...
- Q a) Compute the modified duration of a 9% coupon, 4-yearcorporate bond with a yield to maturity of 10%.b) Using the modified duration, If the market yield drops by 25basis points,...
- Q Preparation of Statement of Cash FlowComponentsJEM Company's comparative balance sheets for 2016 and 2017 appearbelowDecember 31Assets 2017 2016 Cash$ 68,000$ 22,000Accounts receivable82,00066,000Inventory170,000189,000Land71,000110,000Equipment280,000200,000Accumulated depreciation–equipment(74,000)(42,000)Total$597,000$545,000Liabilities and Stockholders’ EquityAccounts payable$ 34,000$ 47,000Bonds payable150,000200,000Common stock ($1 par)170,000164,000Retained...
- Q 1)A football player has the following new contractsoptions. All are guaranteed. If the discount rate is 7% how much iseach worth today? Which do you think is the best option?Why?A...
- Q Summerdahi Resort’s common stock is currently trading at$37.15 a share. The stock is expected to pay a dividend of $2.50 ashare at the end of the year (D1 = $3.00),...
- Q An investment has an installed cost of $527,630. The cash flowsover the four-year life of the investment are projected to be$212,200, $243,800, $203,500, and $167,410, respectively.a.If the discount rate is...
- Q 12. Given the following information about the returns of stocksA, B, and C, what is the expected return of a portfolio invested30% in stock A, 40% in stock B, and...
- Q (SHOW CALCULATIONSPLEASE) Unlevered Corporation (FirmU) has a total market value of $15,000,000, a taxrate of 40 percent, and earnings before interestand taxes (EBIT) of $2,000,000. LeveredCorporation (Firm L) is identical...
- Q 3. Analysis of an expansion projectCompanies invest in expansion projects with the expectation ofincreasing the earnings of its business.Consider the case of Garida Co.:Garida Co. is considering an investment that...
- Q Tattletale News Corp. has been growing at a rate of 20% peryear, and you expect this growth rate in earnings and dividends tocontinue for another 3 years. The last dividend...
- Q A firm with no debt financing has afirm value of $50 million. It has a corporate marginal tax rate of35 percent. The firm’s investors are estimated to have marginal taxrates...
- Q Problem 9-24 Project Analysis [LO 2]McGilla Golf has decided to sell a new line of golf clubs. Theclubs will sell for $731 per set and have a variable cost of...
- Q A bank asks you to design a five-year principal-protected noteon the S&P 500. Assume the note has a $1,000 face value, therisk free rate is 3% with continuous compounding, and...
- Q Which of the following is true of bonds?aSince bonds have a face value of $1,000, they can be purchasedat any time for $1,000.bOnce purchased, bonds cannot be sold and must...
- Q 8) Last week, Onboard Co. has announced that the next two annualdividends will be in the amount of $2.28 and $4.21, respectively.After that, the dividends will increase by 2.93 percent...
- Q 5) The Blueberry Company is considering a project which willcost $424 initially. The project will not produce any cash flowsfor the first 3 years. Starting in year 4, the project...
- Q (SHOW CALCULATIONSPLEASE) The Rivoli Company has no debt outstandingand its financial position is given by the following data:Market value of Assets$10,000EBIT (earnings before interest and tax)$1,500Stock price$10Shares outstanding1,000Tax rate35%The firm...
- Q Use the following information for Ingersoll, Inc., (assume thetax rate is 40 percent): 20142015 Sales$8,035$8,609 Depreciation1,1451,146 Cost of goods sold2,7163,080 Other expenses659554 Interest545623 Cash4,1295,223 Accounts receivable5,4596,147 Short-term notes payable814766 Long-term debt13,68016,250 Net fixed assets34,65535,517 Accounts payable4,3564,205 Inventory9,6909,958 Dividends9761,071 For 2015, calculate the cash flow from...
- Q You are considering an investment in a mutual fund with a 6% preload and an expense ratio of .5%. Alternatively, you could investin a bank CD paying 7%. If you...
- Q Assess the advantages and disadvantages of adoption ofthe Fixed versus Flexible exchange rate system. Choose and explainthe exchange rate regimes you consider to be best suited for thesmall developing countries.
- Q 1)What is the percentage change in price for a zero coupon bondif the yield changes from 5.5?% to 9?%? The bond has a face valueof ?$1,000 and it matures in...
- Q The financial planning committee of Nickel News, Co. hasprojected a Growth Rate of 8% for both Sales and Operating Costsfor the upcoming year. No external capital will be required, andcurrently...
- Q Please answer the following questions. Please write all yourwork. You will be graded on your process, NOT on achieving thecorrect answer. Please staple all pages together. Include your nameon every...
- Q During the year, Belyk Paving Co. had sales of $2,387,000. Costof goods sold, administrative and selling expenses, anddepreciation expense were $1,438,000, $436,300, and $491,300,respectively. In addition, the company had an...
- Q compare and contrast how corporations use interest swaps andforward contracts. Focus your discussion on the European exerciseoptions (for example, the call/put spread).
- Q compare and contrast how corporations use interest swaps andforward contracts. Focus your discussion on the European exerciseoptions (for example, the call/put spread).
- Q Explain the possible determinants of the market interest ratethat you chose. For example, you should explain how the inflationrate in the economy could be expected to impact the market ratethat...
- Q ust for fun, let’s say that your money actually could grow asfast as the rabbit population in Australia grew, which isapproximately equal to an APY of 29%. Assuming that you...
- Q Steven is contributing to his 401(k) retirement plan. Hecontributes $3100 per year. His employer matches 50% of hiscontribution. If Steven can earn a 6% rate of return, how much(approximately) will...
- Q Which variable has the biggest impact on TVM calculations?Examine an FV of an annuity problem where annual payments are$2,800, the rate of return is 8%, and the number of years...
- Q Tony’s Hot Dog Stand1. 1,600 people per day pass stand; 1 of 4buy2. ¼ buy=conversion rate=25%3. Cogs=$.254. Avg. customer buys 2 tube steaks @$1each5. Cost of tube steaks - $.25...
- Q Prepare a monthly cash budget for January through April. Be sureto clearly show the surplus (deficit) of cash.Based on the deficit cash shown on your cash budget, what is thedollar...
- Q Researchers at some of the nation’s leading universities havebeen studying financial literacy for years. Results from their workprovide interesting insights into the financial capabilities of theaverage American. Their findings are...
- Q By calculating the duration for the following bonds decide whichhas a higher duration. The first bond is a 2 year $1000 zero couponbond. The second is a 3 year $1000...
- Q A piece of labor-saving equipment has just come onto the marketthat Mitsui Electronics, Ltd., could use to reduce costs in one ofits plants in Japan. Relevant data relating to the...
- Q The initial equity capital of Toys 4 Tots, Inc. (T4T) consistedof 10 million Shares sold at $ 0.25 Par Value Per Share. Thecompany has been in business for a year...
- Q Question 4Acme Publishing has the following (independent) investmentopportunities:ProjectInitial investmentIRRA$13 00016%B$17 00014%C$10 00010%The optimal capital structure calls for financing all projectswith 60 per cent ordinary shares and 40 per cent debt....
- Q Life moves more quickly with every generation. There is moretechnology to introduce you to more data. It is your job todetermine what data you need to review and understand to...
- Q 1 a) The present value of an annuity lasting 72 interestperiodsand paying $ 2,000 at the beginning of each “k” interest periodsis$ 9,538.60. Given that the effective interest rate per...
- Q Discuss the eligibility and coverage, including the definitionof “highly compensated” for employee benefit purposes of aqualified plan
- Q Five years ago a XYZ stock paid a $1.15 dividend. Since then ithas split two for one once and three for two twice. XYZ currentearnings per share are $1.15, and...
- Q You bought a 25-year ABC bond that has a coupon rate of 9percent and sells at a yield to maturity of 8 percent. You holdthis bond for 1 year before...
- Q please explain this abstract thinking for me inrelation to finance or financial management... and the topic itrelate to.'' BORROWING SEED FROM NEIGHBOR WITH UNDERSTANDING THAT THE AMOUNTOF SEED PLUS LITTLE...
- Q You have the following historical annual total returns onTerlingua Oil & Gas Exploration:YearAnnual total return (%)20019%200210%200314%200412%2005-1%20064%2007-1%20088%2009-1%20106%Calculate the sample standard deviation of annual return.
- Q please explain this abstract thinking for me inrelation to finance or financial management...'' lending hunting instrument to fellow clansman forperiod of time with understanding of being returned later with partof...
- Q Ohio Inc. has a beta of 1.6 and its debt-to-equity ratio is 0.8.The risk-free rate is 3.2% and the market risk premium is 9%.Although Ohio is a U.S. firm, it...
- Q Beano Ltd manufactures beanbags. The company’s variable costsare $15 per unit and fixed operating costs are $2.1 millionannually. The beanbags are sold for $45 each.Requireda What is Beano Ltd’s break-evenpoint...
- Q The W.C. Pruett Corp. has $350,000 of interest-bearing debtoutstanding, and it pays an annual interest rate of 8%. Inaddition, it has $700,000 of common stock on its balance sheet. Itfinances...
- Q compare and contrast how corporations use interest swaps andforward contracts. Focus your discussion on the European exerciseoptions (for example, the call/put spread).
- Q Simes Innovations, Inc., is negotiating to purchase exclusiverights to manu- facture and market a solar-powered toy car. Thecar’s inventor has offered Simes the choice of either a one-timepayment of $1,500,000...
- Q Rick and Stacy Stark, a married couple, are interested inpurchasing their first boat. They have decided to borrow the boat’spurchase price of $100,000. The family is in the 28% federal...
- Q how do i calculate the ETF Value(in $). HOW DO I CALCULATE WHATFOR THIS ANSWER?DayValue of IndexIndex Daily ChangeETF Expected % ChangeETF Value (in $)1100100211010.020120.003100-9.1-18.298.16490-10.1-20.278.33
- Q You are offered an investment that will pay you $150 at the endof year one, $250 at the end of year four, and $800 at the end ofyear eight. What...
- Q ?(Yield to? maturity) A? bond's market price is?$900. It has a ?$1,000 par? value, will mature in 8 ?years, andhas a coupon interest rate of 8 percent annual? interest, but...
- Q Vandalay Industries is considering the purchase of a new machinefor the production of latex. Machine A costs $1,840,000 and willlast for 4 years. Variable costs are 35 percent of sales,...
- Q how does one hedge, or protect themselves from economicrisk?
- Q What are three different financial applications of the timevalue of money
- Q Top Cat Ltd is a company that supplies pet food to the dogs andcats of Australia. The company’smarginal tax rate is 30%. The business is considering replacinga five-year-old manually operatedtuna...
- Q firm’s stock has a 0.2 possibility tomake 40.00% return, a 0.50 chance to make 10% return, and a 0.3possibility to make -10% return. Calculate standard deviationa. 0.03b. 0.04c. 0.05d. 0.06
- Q 37. Simon recently received a credit card with a 13% nominalinterest rate. With the card, he purchased an Apple iPhone 7 for$430.00. The minimum payment on the card is only...
- Q A thumbs up will be given:Table 1tABCD0 (14,900,000) (17,900,000) (16,600,000) (19,700,000)1 4,980,000 5,990,000 3,850,000 6,400,0002 4,980,000 6,210,000 4,990,000 5,880,0003 4,510,000 6,250,000 6,860,000 6,800,0004 4,510,000 4,700,000 4,990,000 6,650,000RiskHighAverageLowAverageTable 1 shows the expected after-tax operating cash...
- Q 1. What are the potential shortfalls of using comparable tovalue a private company?2. How does the concept of fiduciary duty play into the use ofpreferred stock?3. Why is vesting used...
- Q Digital Organics (DO) has the opportunity to invest $1.23million now (t = 0) and expects after-tax returns of $700,000 in t= 1 and $800,000 in t = 2. The project...
- Q Consider the following. a. What is the duration of a four-yearTreasury bond with a 4.5 percent semiannual coupon selling at par?b. What is the duration of a three-year Treasury bond...
- Q A firm is contemplating shortening its credit periodfrom 40 to 30 days and believes that, as a result of this change,its average collection period will decline from 45 to 36...
- Q As a new migrant, Lisa is currently considering to buy a bottleshop which will be in operation for 10 years. If purchased, thebottle shop is expected to generate a first...
- Q Financial risk forms : • Market value risk • interest rate risk,• exchange prices, • Asset prices price • default risk • Risk ofliquidityNon-Financial risk forms: • Business Risk( chances...
- Q Peoples’ Savings Bank, a thrift institution, has a cumulativegap for the coming year of +$145 million and interest rates areexpected to fall by 3.5 percentage points.(1) What is the expected...
- Q Stilwater Bank & Trust Company has an average asset durationof 4.25 years and an average liability duration of 2.75 years. Itsliabilities amount to $580 million, while its assets total $620million.(1)...
- Q Charles and Caitlin are facing an important decision. Afterhaving discussed different financial scenarios, the two computerengineers felt it was time to finalize their cash flow projectionsand move to the next...
- Q Menlo Company distributes a single product. The company’s salesand expenses for last month follow: Total Per Unit Sales $ 632,000$ 40 Variable expenses 442,400 28 Contribution margin 189,600 $ 12Fixed...
- Q Assume that you manage a risky portfolio with an expected rateof return of 12% and a standard deviation of 28%. The T-bill rateis 4%. Your client chooses to invest 80%...
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