Finance question and answers for July 17, 2023
- Q The McGregor Whisky Company is proposing to market diet scotch.The product will first be test-marketed for two years in southernCalifornia at an initial cost of $630,000. This test launch is...
- Q Monica Dubois, an ABC investment advisor, has a new client, Mr.Jack Klein. Mr. Klein is a conservative investor who is interestedin a required rate of return of 10% on his...
- Q Broussard Skateboard's sales are expected to increase by 20%from $7.6 million in 2016 to $9.12 million in 2017. Its assetstotaled $5 million at the end of 2016. Broussard is already...
- Q Use value chain analysis to evaluate the effectiveness ofprimary activities (i.e., inbound logistics, operations, outboundlogistics, marketing/sales and service) at AmazonGo. How do secondary activities (i.e., technologydevelopment, human resources, general administration, andprocurement)...
- Q Describe how to manually process financial transactions andoutline the key features of manual and computerised accountingsystems. (300 words)
- Q 7A) Quad Enterprises is considering a new three-year expansionproject that requires an initial fixed asset investment of $2.9million. The fixed asset will be depreciated straight-line to zeroover its three-year tax...
- Q Prahm Corp. wants to raise $4.8 million via a rights offering.The company currently has 540,000 shares of common stockoutstanding that sell for $49 per share. Its underwriter has set asubscription...
- Q 7A) Quad Enterprises is considering a new three-year expansionproject that requires an initial fixed asset investment of $2.9million. The fixed asset will be depreciated straight-line to zeroover its three-year tax...
- Q A project under consideration has an internal rate of return of13% and a beta of 0.4. The risk-free rate is 3%, and the expectedrate of return on the market portfolio...
- Q Propose TWO option combination strategies thatinvolve more than one optioncontract for the USD variable rate loan (USD 20m), forall relevant risksfaced by this portfolio. OceanaGold’smanagement has expressed a desire toretain...
- Q A project has the following forecasted cash flows:Cash Flows ($ thousands)C0C1C2C3?125+67+85+75The estimated project beta is 1.55. The market returnrm is 17%, and the risk-free raterf is 7%.a. Estimate the opportunity...
- Q You are considering an investment in a mutual fund with a 7%load and expense ratio of 0.5%. You can invest instead in a bank CDpaying 3% interest. a. If you...
- Q You are manager of an airline company. The company issues stockoptions to its employees that have a fixed exercise price and termto maturity. Your company is very efficient and well...
- Q You are bearish on Telecom and decide to sell short 180 sharesat the current market price of $70 per share. a. How much in cashor securities must you put into...
- Q Mutually exclusive ProjectsProject AProject BProject CInitialcash Outlay (50,000) (60,000) (40,000)RequiredRate of Return11%8%13%Cash Flows:???Inflow Year 110,000300008,000Inflow Year 215,0005000020,000Inflow Year 320,000500020,000Inflow Year 425,000500020,000Inflow Year 530,000200015,000Step 1Your first assignment as a financial analysis...
- Q theboard of directors has asked you to assess the financial impact andmake a recommendation regarding the acquistion of equipment.After detailed analysis you conclude that:The purchase price of the equipment is...
- Q For this assignment, express your thoughts on whichbusinesses/industries you believe would be easy and difficult tostart as entrepreneurs. Once you have named a business/industrythat is difficult and one that is...
- Q At one point in time when you took out a mortgage, a paper copyof an amortization table was provided to you detailing how much ofeach payment went towards the principal...
- Q An alternative to using logarithms to determine the amount oftime that it would take for a lump-sum investment at a particularcompound interest rate to grow to a certain value would...
- Q Suppose that you “max out” a credit card to its limit of $14,000and plan on paying off this $14,000 balance by making minimumpayments of $500 (no other charges will be...
- Q Prepare a spreadsheet using Excel or a similar program in whichyou compute the items listed in parts a, b, and d. Be sure tocompute the Yield-to-Maturity (YTM) and Yield-to-Call (YTC)...
- Q Identify six sources of short term financing available infinancing new business and give detailed explanation as to theprocess involved and how each of them is used in obtaining requiredfinancing.
- Q The Target Copy Company is contemplating the replacement of itsold printing machine with a new model costing $ 715. The newmachine will operate for 3 years and then project will...
- Q A-Rod Manufacturing Company is trying to calculate its cost ofcapital for use in making a capital budgeting decision. Mr. Jeter,the vice-president of finance, has given you the followinginformation and has...
- Q Some recent financial statements for Smolira Golf, Inc.,follow.SMOLIRA GOLF, INC.Balance Sheets as of December 31, 2015 and 20162015201620152016AssetsLiabilities and Owners’ EquityCurrent assetsCurrent liabilitiesCash$3,091$3,107Accounts payable$2,173$2,640Accounts receivable4,7475,741Notes payable1,7702,156Inventory12,55813,742Other94111Total$20,396$22,590Total$4,037$4,907Long-term debt$13,000$15,760Owners’ equityCommon stock and...
- Q You have a portfolio with a standard deviation of 30 % and anexpected return of 18 %. You are considering adding one of the twostocks in the following table. If...
- Q Blue Ocean already spent $85,000 on a feasibility study for amachine that will produce a new product. The machine will cost$2,575,000 and it will require modifications costing an additionalamount of...
- Q Bob’s Roofing’s non-callable bonds were issued several years agoand now have 20 years to maturity. These bonds have a 7.28% annualcoupon, paid semiannually, sells at a price of $1,054, and...
- Q You are appointed as a credit manager in the local branch of ZAABank that is situated in an industrial area. Most customers arebusinesses. Provide a brief summary of important credit...
- Q Suppose that a 1-year zero-coupon bond with face value $100currently sells at $95.43, while a 2-year zero sells at $77.31. Youare considering the purchase of a 2-year-maturity bond makingannual coupon...
- Q 1. What is the value of a bond that has a par value of 1,000, acoupon rate of 7% (semi-annually), and matures in 10 years? Assumea required return of 5.5%....
- Q 1.A company is analyzing two mutually exclusive projects, E andF, whose cash flows are shown below:Years01234Cash Flow E-$1,100$900$350$50$10Cash Flow F-$1,100$0$300$400$850The company's cost of capital is 12 percent, and it can...
- Q 1. Determine the missing values based on theprovided information:Current Ratio = 4.8571429Debt Ratio = 0.3306836248Asset Turnover = 1.3879173291Gross Profit Margin = 64%Net Profit Margin = 20%Inventory Turnover = 6.5475 ?...
- Q Delsing Canning Company is considering an expansion of itsfacilities. Its current income statement is as follows:Sales$6,800,000Variable costs (50% of sales)3,400,000Fixed costs1,980,000Earnings before interest and taxes (EBIT)$1,420,000Interest (10% cost)560,000Earnings before taxes...
- Q A company’s financial manager believes that sales in 2019 couldrise by as much as 20% or by as little as 10%. Prepare thepro-forma financial statements under the two assumptions andcalculate...
- Q Find the monthly payment and estimate the remainingbalance(to the nearest dollar). Assume interest is on the unpaidbalance.30-year car loan for $235,000 at 3.21%; remaining balance after20 years.
- Q Financial Management and Securities Markets Answer the followingquestions in paragraph, full-sentence format. Define personalfinances and financial planning. Explain the financial planninglife cycle. Identify the three stages of the personal-financesplanning process...
- Q Foundations of Financial Management: Define and discuss warrantsand convertibles including what they are, how they work and howthey effect the value of the bonds to investors
- Q How can a business owner plan asset acquisitions to fullyutilize the Section 179 deduction?
- Q Foundations of Financial Management: Define and discuss thefollowing types of financial derivatives- futures, mortgage backedsecurities
- Q Foundations of Financial Management: Factors that influenceexchange rates
- Q At what the annual rate would the following have to beinvested?a. $520 to grow to $1,483.62 in 11 years ?b. $280 to grow to $479.87 in 7 years ?c. $50...
- Q The following information is available for three mutualfunds:MutualrFundE(r)sABCA9.20%29.00%10.610.64B7.00%27.00%10.56C11.00%40.00%1(a) Calculate the weights of a portfolio of mutual funds B and Cthat has the same expected returnas mutual fund A.(b) Does the...
- Q Describe how the following transactions of McDonald’s Corp.(MCD), would affect the threeelements of the accounting equation.a. Paid research and development expenses for the current year. b.Purchased machinery and equipment for...
- Q Answer the questions for the bond below, which pays interestssemi-annually. The modified duration is 3.9944 years and convexitymeasure is 19.7636 years. (Assume par value is $1000). Coupon rate:9%, current yield...
- Q The expected returns, standard deviations and correlationbetween Xerox (XRX) and Yahoo! (YHOO) are shown below:rE(r)sXRXYHOOXRX11%20%10.3YHOO15%35%1Draw the combination line for portfolios of these twostocks.
- Q Flora? Co.'s bonds, maturing in 19 ?years, pay 9 percentinterest on a $ 1 000 face value.? However, interest is paidsemiannually. If your required rate of return is 7 ?percent,...
- Q Q3.The management at Big Toy Company is considering purchasing a newmachine and it has gathered the following data:A) The cash needed to buy the new machine is $65,000b) The residual...
- 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 CASE 4 CONCH REPUBLIC ELECTRONICS Conch Republic Electronics isa midsized electronics manufacturer located in Key West, Florida.The company president is Shelley Couts, who inherited the company.When it was founded over...
- Q Please distinguish between debentures and mortgage bonds, howdoes a bond’s par value differ from its market value? Commonstockholders receive two types of return from their investment.Explain. Why is preferred stock...
- Q Provide a 200 word summary of the structure and content of agood business credit proposal.I need help with this. Please provide a reliable answer.
- Q UltraMX Corp., an all equity exchange traded company,is planning to invest in a project as follows:Initial investment = $100 million.The project is financed with debt and equity in same proportion(i.e.,...
- Q Assume that a customer shops at a local grocery store spendingan average of ?$150 a? week, resulting in the retailer earning a?$25 profit each week from this customer. Assuming the...
- Q 18. You are evaluating next year investment opportunities andyour company cost of capital. You anticipate that if you couldminimize your cost, more feasible projects could be undertaken. Youare also able...
- Q You are provided with the following information about abusiness:a. The sales of the business has increased over the pastfinancial year;b. The gross profit of the business has decreased;c. The payment...
- Q holding period and annual(investment returns. BakerBaseball Cards, inc. originally purchased the rookie card ofHammerin ' Hank Aaron for $32.00. After holding the card for 6years, Baker Baseball Cards auctioned the...
- Q How important is understanding; demography, culture, ideologyand history of people from other countries when doing businessthere? An argument is that people want what we have and theirtastes are the same,...
- Q Short a call at 115, long a put at 115, and long one share ofthe stock.(Please include a table with at least 50 data points for thegraph. Graph the value...
- Q XYZ company has 10,000 shares of stock currently trading at $10per share. They have a beta of 1, expected market return of 10% anda 3% risk free rate. XYZ also...
- Q A regional bank holding company recently bought a $100 millionpackage of mortgages that carry an average 8.5 percent yield. Theholding company has established a subsidiary to manage thispackage. The subsidiary...
- Q Marcosoft Inc. is a publicly traded company that operates in thesoftware and entertainment business, deriving 60% of its value fromsoftware and 40% from entertainment. You have collected thefollowing information on...
- Q As an executive, you are faced with a cash shortfall that youthink is temporary but that may exceed 12 months. Your bank linesof credit are maxed out. You don’t really...
- Q 1)Prepare an ending 2014 Income Statement and Balance Sheet fromthe following information: Sales $800,000; Cost of Goods Sold$300,000; Accounts Receivables $20,000; Bonds Outstanding $160,000;Accounts Payable $20,000; Advertising Expense $1,000;Administrative Expenses...
- Q You are evaluating a project based on the following: InitialInvestment: $1,250,000 Cash Flows: $275,000 per year for 5 years(end of year) Required Return: 10% Required Payback: 5 Years 1.Would you...
- Q A. What is the NPV of the following cash flows if the requiredrate of return is 0.05?Year 0 1 2 3 4CF -13868 2129 2503 694 3244 Enter the answer...
- Q Arnold Inc. is considering a proposal to manufacture? high-endprotein bars used as food supplements by body builders. The projectrequires use of an existing? warehouse, which the firm acquiredthree years ago...
- Q Distinguish between the following types of foreign exchangeexposure:Transaction exposureEconomic exposureTranslation exposureGiven 1 example for each.
- Q For the company - StrykerCorporation, answer the following questions.For you to decide if Stryker stock is a good buy or sell, youmust forecast several key variables, including the stock price.Use...
- Q You must evaluate a proposal to buy a new milling machine. Thebase price is $108,000, and shipping and installation costs wouldadd another $7,000. The machine falls into the MACRS 3-year...
- Q Clemson Software is considering a new project whose data areshown below. The required equipment has a 3-year tax life, afterwhich it will be worthless, and it will be depreciated by...
- Q A firm with a WACC of 10% is considering the following mutuallyexclusive projects: 0 1 2 3 4 5 Project 1 -$200 $40 $40 $40 $235$235 Project 2 -$450 $200...
- Q The company you work for wants you to estimate the company'sWACC; but before you do so, you need to estimate the cost of debtand equity. You have obtained the following...
- Q In doing a five-year analysis of future dividends, the DawsonCorporation is considering the following two plans. The valuesrepresent dividends per share. Use Appendix B for an approximateanswer but calculate your...
- Q Digital Organics (DO) has the opportunity to invest $1.13million now (t = 0) and expects after-tax returns of$710,000 in t = 1 and $810,000 in t = 2. Theproject will...
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