Finance question and answers for July 31, 2023
- Q After slaving for others, you finally decided to go toRio and open a small bistro so you can enjoy the free time andpartake in the festivities of the Carnaval do...
- Q Innovative Tech, Inc.'s (ITI) annual stock returns for the lastfive years are: -6%, 49%, 12%, -3%, and 45%. The S&P 500Index's annual returns for the last five years are: -5%,...
- Q 1. How should you determine whether to take or reject a project?What measure should you use to figure out the dollar value of theproject today?2. If rate of return is...
- Q Deep Value, Inc.’s annual stock returns for the last ten yearsare: –5%, 15%, 11%, 18%, –8%, 9%, 16%, –3%, –2%, and 45%. TheMarket Index’s annual returns for the same ten...
- Q an investor is evaluating the common shares od the three firmsA,B and C. Expected returns, standard deviation of returns , andbetas are :stock expected return standarddeviation beta...
- Q a. What is the duration of a two-year bond thatpays an annual coupon of 11.3 percent and has a current yield tomaturity of 13.3 percent? Use $1,000 as the face...
- Q Looking for a finance cheat sheet with ratios, principles, andconcepts.
- Q Your task is to determine the WACC for a given firm using whatyou know about WACC as well as data you can find through research.Your deliverable is a brief report...
- Q Allinvestment decisions involve a certain degree of risk anduncertainty. How can a manager reduce the level of risk anduncertainty when making CapEx decision? In your response explainhow Economic Value Added...
- Q "Consider two mutually exclusive projects that will be conductedfor a total of 6 years. Project A lasts 3 years (so it will need tobe repeated 1 time) and has the...
- Q Deep Value, Inc.’s annual stock returns for the last ten yearsare: –5%, 15%, 11%, 18%, –8%, 9%, 16%, –3%, –2%, and 15%. TheMarket Index’s annual returns for the same ten...
- Q Better Mousetraps has developed a new trap. It can go intoproduction for an initial investment in equipment of $5.7 million.The equipment will be depreciated straight line over 6 years to...
- Q A 10-year, $1,000 par value bond has a 6.75% coupon rate withinterest paid semiannually. The bond currently sells for $850. Whatis the capital gains yield on these bonds? Enter your...
- Q Shelly's Boutiques and Crafts had revenue of $5,700,000 thisyear on sales of 575,000 units. Variable costs were 35% and fixedcosts totaled $3,150,000. Although the first five years wererelatively profitable, increases...
- Q Southwest Sands currently has 19,400 shares of stockoutstanding. It is considering issuing $89,000 of debt at aninterest rate of 6.2 percent. The break-even level of EBIT betweenthese two capital structure...
- Q Buchholz Corporation follows a moderate current asset investmentpolicy, but is now considering a change, perhaps to a restricted ormaybe to a relaxed policy. The firm's annual sales are $400,000;its fixed...
- Q Suppose that XTel currently is selling at $50 per share. You buy900 shares using $36,000 of your own money, borrowing the remainderof the purchase price from your broker. The rate...
- Q Consider two bonds. The first is a 6% coupon bond with six yearsto maturity, and a yield to maturity of 4.5% annual rate,compounded semi-annually. The second bond is a 2%...
- Q QUESTION 1Use the following information to answer the next twoquestions.The peso/pound exchange rate is Mex$16/£ while the euro/poundexchange rate is €1.15/£ . You also observe that the actualpeso/euro cross exchange...
- Q 16. A bond with 5 years to maturity is selling for $1,000 andhas a yield to maturity of 4.50%. If this bond pays its couponpayments semi-annually and par value is...
- Q After coming to a final decision, World Wide WidgetManufacturing, Inc., has a stock portfolio that consists of thefollowing positions. With betas shown for each stock. You have beenasked to calculate...
- Q Tyson Iron Works is about to go public. It currently hasaftertax earnings of $5,200,000, and 4,900,000 shares are owned bythe present stockholders. The new public issue will represent500,000 new shares....
- Q Bradley borrowed$72,500 in student loans and he has just graduated from ElonUniversity. He earns enough at his new job to allow him to pay $575per month on the loan. If...
- Q If you want to invest in a company and you noticed that thecompany’s free cash flow or operating cash flow from its assets wasnegative for the past 3 years, what...
- Q Esquire Products Inc. expects the following monthly sales:January $ 37,000 July $ 31,000 February 28,000 August 35,000 March21,000 September 38,000 April 23,000 October 43,000 May 17,000November 51,000 June 15,000 December...
- Q Suppose your firm is considering investing in a project with thecash flows shown below, that the required rate of return onprojects of this risk class is 11 percent, and that...
- Q Given the following demand numbers, create a forecast for Aprilthrough January of the following year. The forecast demand for atime period is the average of the previous three time periods....
- Q What do you think Ferrari is worth in Euros? Justify yourrecommendation based on current market multiples valuation and aDCF valuation.201220132014First Half 2015SalesCars and Spare Parts (1)1,6951,6551,9441,007Engines (2)77188311121Sponsorship, Commercial and Brand...
- Q Walmart, America’s largest retailer had the market’s secondlargest debt issuance in the U.S. in 2019, selling $16 billion in30 year bonds. The funds were to help finance the purchase ofFlipkart,...
- Q Calculate the future value in year 12 of a $2,000deposit in Year 3 and another $4,000 deposit at the end of Year 5using a 10% compound rate.$13,406.74$12,909.82$12,510.77$15,007.53
- Q Should international businesses promote or fight the creation ofregional trading blocs?
- Q The following information is provided by Millenium FalconImporters (MFI) regarding their defined benefit pension plan.Pension asset/liability (January 1) ($25,000)Projected benefit obligation, January 1, 2017 ($700,000)Settlement rate 10%Service cost $80,000Contribution in...
- Q The chief ranger of the state’s Department of Natural Resourcesis considering a new plan for fighting forest fires in the state’sforest lands. The current plan uses eight fire-control stations,which are...
- Q Simes? Innovations, Inc., is negotiating to purchase exclusiverights to manufacture and market a? solar-powered toy car. The?car's inventor has offered Simes the choice of either a? one-timepayment of ?$2,800,000 today...
- Q So far, things have gone well with Dr. Bueller. Before you wrapup your meetings and he begins investing, you decide to spend alittle time sharing information with him about using...
- Q The Day Company and the Knight Company are identical in everyrespect except that Day is not levered. Financial information forthe two firms appears in the following table. All earnings streamsare...
- Q A private school is considering the purchase of six school busesto transport students to and from school events. The initial costof the buses is $600,000. The life of each bus...
- Q Assume that you recently graduated with a major in Finance andyou landed a job as a financial planner with a large financialservices corporation. The organization where you work has aresearch-intensive,...
- Q Dr. Bueller recently overheard a few of his colleaguesdiscussing possible investments in the international marketplace.Wanting to explore all of his potential investment options, he hasasked you to explain the various...
- Q A company is considering the purchase of a large stampingmachine that will cost $135,000, plus $6,700 transportation and$12,300 installation charges. It is estimated that, at the end offive years, the...
- Q 1. If the future value of an ordinary, 7-year annuity is $10,000and interest rates are 4%, what is the future value of the sameannuity due? A. $9,615.39 B. $10,010.00 C....
- Q A mining company is considering a new project. Because the minehas received a permit, the project would be legal; but it wouldcause significant harm to a nearby river. The company...
- Q .NEED ANSWER ASAP / ANSWER NEVER USED BEFOREDiscuss traditional costing and why a better approach is/wasneeded. Activity based costing (ABC) is the solution since it willenhance the accuracy and effectiveness...
- Q Hagar Industrial Systems Company (HISC) is trying to decidebetween two different conveyor belt systems. System A costs$365,000, has a 4-year life, and requires $153,000 in pretax annualoperating costs. System B...
- Q Resources Corporation is estimating its WACC. Its target capitalstructure is 40% debt, 10% preferred stock, and 50% common equity.Its bonds have an 8% coupon rate, paid semi-annually, a currentmaturity of...
- Q ABC Corporation is condsidering an IPO. ABC has 12 millionshares of common stock owned by its founder and early investors.ABC has no preferred stock, debt, or short-term investments. Basedon its...
- Q As a financial adviser to individual investors, your boss hasasked you to write a memo to him so that he can recommend amortgage-backed bond to a client. The client has...
- Q You are a finance employee at a financial institution,specializing in originating auto loans in a country where autoloans have only been available for 2 years. Your group has justbeen informed...
- Q On the next 10questions, express monetary answers to the nearest whole dollar andpercentages to thenearest hundredth. Round months to the nearest tenth on Question20.For example, $1,234,567 (don’t include the cents)...
- Q Consider a two-period binomial model in which a share currentlytrades at a price of R160. The share price can go up or down by 10%each period. The risk-free rate is...
- Q Explain briefly the 4 main threats to information privacy. Whatare cookies and what should individuals do about them. Describe thePLUS approach to ethical decision making.
- Q Examine the risks of interest rate and currency swaps of acountry.
- Q Explain the difference between public debt offerings andprivate debt offerings. Provide a recent example of corporationsusing each type of offering.
- Q Pompeii Pizza Club owns three identical restaurants popular fortheir specialty pizzas. Each restaurant has a debt-equity ratio of45 percent and makes interest payments of $47,000 at the end ofeach year....
- Q How would one compute the present value of a delayed annuity? Isthis a “single step” or a “2 step” problem? Explain. For example,what is the PV of a delayed 10...
- Q At an interest rate of 9 percent, an investment of $1 woulddouble in 8.04 years. How long to the nearest year would it take aninvestment of $1 to grow four...
- Q The following tableshows the nominal returns on Brazilian stocks and the rate ofinflation.YearNominal Return(%)Inflation(%)20120.26.92013-16.07.02014-14.07.52015-42.511.8201667.37.4201728.04.0a.What was the standard deviation of the market returns?b. Calculate theaverage real return
- Q explain thefollowing in 400 words:1. How does collateral affect the interest rate on a bond? Howdoes subordination affect the interest rate on a bond too? Whatelse might affect the interest...
- Q Pirate Seafood Company purchases lobsters and processes theminto tails and flakes. It sells the lobster tails for $20.60 perpound and the flakes for $15.50 per pound. On average, 100 poundsof...
- Q dividually students will develop a formal response to theproblem(s) posed in the case, addressing the following areas withinthe analysis, and using the same headings. (Numbers in brackets donot necessarily correspond...
- Q 6. Jiffy Park Corp. hasannual sales of $50,705,000, an average inventory level of$15,015,000, and average accounts receivable of $10,015,000. Thefirm's cost of goods sold is 85% of sales. The company...
- Q Rise Against Corporation is comparing two different capitalstructures: an all-equity plan (Plan I) and a levered plan (PlanII). Under Plan I, the company would have 170,000 shares of stockoutstanding. Under...
- Q Match each term or concept with their correspondingdefintions.It is the discount rate used in present-valuing future interestpayments and the principal payment at maturity______.A type of debt instrument that is not...
- Q The most recent financial statements for Drennan ManufacturingCo. are shown below:Income StatementBalance Sheet Sales$75,300 Current assets$27,000 Debt$37,200 Costs55,380 Fixed assets89,300 Equity79,100 Taxable income$19,920 Total$116,300 Total$116,300 Tax (40%)7,968 Net Income$11,952Assets and costs are proportional to sales. Debt and equity arenot. The company...
- Q Ophir Mining Corporation has 6.3 million ordinary sharesoutstanding; 350000, 5.8% preferenceshares outstanding, and 150000, 7.1% half-yearly bondsoutstanding, par value $1000 each. Theordinary shares currently sell for $74 and have a...
- Q Instruction: Read the case study related to East Coast Yachtsand complete the following tasks.After Dan’s analysis for East Coast Yachts (see the Case studyfor Module 2), Larissa has decided to...
- Q Assume a new project requires an initial investment of $6million dollars, with ensuing cash flows of $1, $3 and $5 millionin years 1, 2 and 3. Assuming the company's WACC...
- Q TedTalk "The future of money" What are some emergingdevelopments/trends in money and banking?
- Q Assume a new project requires an initial investment of $10million dollars, with ensuing cash flows of $2, $4 and $5 millionin years 1, 2 and 3. Assuming the company's WACC...
- Q What is a bell curve and normal score ?
- Q Assume that your grandmother wants to give you generous gift.She wants you to choose which one of the following sets of cashflows you would like to receive: Option A: Receive...
- Q Assume a new project requires an initial investment of $10million dollars, with ensuing cash flows of $2, $4 and $5 millionin years 1, 2 and 3. Assuming the company's WACC...
- Q Frosty's Frozen Food Inc.'s inventory balance is $1.22 million.Frosty's Cost of Good's Sold is $30.4 million. It's days inventoryheld period is12 days.24.92 days.14.65 days.299.2 days.
- Q 1. Assume the following accounts andamounts were reported by anation last year. Government Purchases of Goods and Services wereUS$5.5 Billion; PersonalConsumption Expenditure were US$40.5 Billion; Gross PrivateDomestic Investment amountedto...
- Q Describe the role that financial intermediaries play inthe financial markets and explain why there are so many differenttypes of intermediaries.
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