Finance question and answers for October 08, 2023
- Q How does loan securitization compare to other means of riskmanagement? Do you think all types of assets held by FI should besecuritized? Please explain.
- Q Parramore Corp has $20 million of sales, $2 million ofinventories, $4 million of receivables, and $3 million of payables.Its cost of goods sold is 75% of sales, and it finances...
- Q Mary takes a loan for 5 years to be repaid by level end of yearpayments of R. The interest paid in the third payment was 136.16and the interest paid in...
- Q Bond value and time-Changing required returns??Personal FinanceProblem ??Lynn Parsons is considering investing in either of twooutstanding bonds. The bonds both have ?$1,000 par values and 12?%coupon interest rates and pay...
- Q A twelve year 5,000 par valued floating rate bond with annualcoupons has a price P such that the investor’s APY is 8%. Theannual coupon rate for the n-th year is...
- Q Provide positive feedback:Pay-for-Performance Link.Based on your understanding of linking organizationstrategy to compensation and performance management, as discussedin Chapter 9, discuss how to strengthen the pay-for-performancelink.Powerful incentives can cause undesired behaviors.Suggest...
- Q What are the conditions under which exchange rate changes couldactually reduce the risk of foreign investment for the company?
- Q American Products is concerned about managing cash efficiently.On the? average, inventories have an age of8484?days, and accounts receivable are collected in3939days. Accounts payable are paid approximately3333days after they arise. The...
- Q Calculate the Net Present Value giventwo proposed projects of AIM Manufacturing Corp.Project # 1:Initial Investment: $100,000Cash Inflows:Year 1: $45,000Year 2: $48,000Year 3: $55,000Year 4: $75,000Year 5: $150,000Project # 2:Initial Investment:...
- Q Explain the term Survivorship Bias and how it impacts theevaluation of the investment returns of a group of portfolios.
- Q Project scenario:You are the principal of a consulting firm, IDSCDR2Inc. Your consulting firm provides two basic services to clients.First, you provide advice to clients that wish to reduce theirexposure. Second,...
- Q Tom owns 22 hotdog stands.Tom earned $10,000 last year from the hotdog standsbusiness.For $4000, Tom can build two more stands, each stand costs$2000. Assume it costed Tom $2000 to build...
- Q Bob borrows 540,000 at annual effective interest rate 3%. Sherepays this loan by paying off only the interest due at the end ofeach year to the lender and depositing a...
- Q A deposit of $5,000 earns interest at 4% compoundedsemi-annually. After three-and-a-half years, the interest rate ischanged to 4.5% compounded quarterly. How much is the account worthafter 7 years?Jan is saving...
- Q Using a spreadsheet, prepare a cash budget for New Tech for thenext year (January through December) based on the followinginformation.OCT NOV DECSales revenue (previous year) 325.0 325.0 325.0Purchases 59.2PAYMENT SCHEDULECash...
- Q Return on Equity (ROE) is one profitability ratio that is usedto determine financial performance. Can you see any limitationswith using ROE to determine the health of a startup business orbusiness...
- Q Please complete the followingproblems in Microsoft Word / Excel document and post to the dropbox.1) Interest ratesand bond ratings (LO16-2) A previously issued A2, 15-yearindustrial bond provides a return three-fourths...
- Q What are the differences between commercial banking, investmentbanking and hedge funds? Describe their main functions and brieflyexplain the way their balance sheets differ from each other. Lastlyexplain the regulatory framework...
- Q The 17 year, $1000 parvalue bonds of Waco Industries pay 6 percent interest annually. Themarket price of the bond is $945, and the? market's required yieldto maturity on a? comparable-risk...
- Q As an investor, what should you look for when performing ratioanalysis of a company? What cautions should you take when reviewingratios? Are there limitations to the analysis?
- Q DeLuxe Furniture is thinking of buying a wood cutting machinefor $150,000 that would save it $40,000 per year in productioncosts. The savings would be constant over the project's 3-yearlife. The...
- Q Problem 7-8 Decision TreesB&B has a new baby powder ready to market. If the firm goesdirectly to the market with the product, there is only a 65 percentchance of success....
- Q Howdo you think companies decide which type of private debt they willuse? Do they have a choice? Do managers consider what is beingoffered by financial institutions? Conversely, what do financialinstitutions...
- Q Total assets = $500,000, total asset turnover = 1.40, total debtratio = 0.30, return on assets = 8.60%. What is the return onequity?A.Below 6.55%B.Between 6.55% and 8.05%C.Between 8.05% and 9.55%D.Between...
- Q Gronseth Drywall? Systems, Inc., is in discussions with itsinvestment bankers regarding the issuance of new bonds. Theinvestment banker has informed the firm that different maturitieswill carry different coupon rates and...
- Q QUESTION 1 Jo-Anne just bought 200 bonds at a purchase price of R1 043.70each. The bonds will mature in 7 years’ time and have a face valueof R1 000.00. The...
- Q Intro You're evaluating a new electron microscope for the QA(quality assurance) unit. The microscope will cost $24,000 to buyand another $2,000 to install, and will be sold for $1,800 after...
- Q Internal management, assessing the firm’s current strengths andweaknesses. Would you agree that the most valuable ratio forinternal management would be activity? Explain the reasons
- Q Areonline aggregators are more comprehensive than the homelisting service that real estate agents use?
- Q QUESTION 2 2.1 As the director of a firm's capital budgeting department,you have been asked to evaluate a project. After collectinginformation from various sources, you have determined thefollowing:The firm's preference...
- Q please answer all questions and explain in detailaccording to the subheadingsExplain the importance of "environmental scanning" when makingmarketing plans and strategic plans in generalA. Marketing PlansB. Strategic Plans
- Q Collins wishes to retire in 30 years’ time and has estimatedthat he will require amonthly pension income of K24,000 per month for 20 years subsequentto retirement.Collins will contribute to a...
- Q A 20-year loan of 150,000 is negotiated with the borroweragreeing to repay principal and interest at 5%. A level payment of9,000 will apply during the first ten years and a...
- 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 Indicate whether the following instruments are examples of moneymarket or capital market securities:a. U.S. Treasury Billsb. Long - Term corporate bondsc. Common stocksd. Preferred stockse. Dealer Commercial Paper
- Q Is it better for a firm's actual stock price in the market to beunder, over, or equal to its intrinsic value? Would your answer bethe same from the standpoints of...
- Q What is the difference between a Market Index ETF and a MarketIndex Mutual Fund?
- Q 8. After spending $10,000 on client development, you have justbeen offered a big production contract by a new client. Thecontract will add $200,000 to your revenues for each of the...
- Q What is the difference between RRSP and TFSA? Briefly describehow each one works. What is the advantage of RRSP over TFSA? Whatis theadvantage of TFSA over RRSP? What is the...
- Q An annuity can be defined as the difference betweentwo perpetuities. calculate the present vale of an annuity thatpays $2,500 per year for 10 years using a dicount rate of 6%....
- Q If you were the risk manager for a company, how would you goabout attempting to identify all of the risks facing a business?How would you decide which risks should be...
- Q Define or Explain two of the followingfour terms (from B&G) and explain how they affect one’spersonal financial decision making:sunk cost fallacy; endowment effect; anchoring; overconfidence.
- Q I have tried this multiple times and I can't get the rightanswer.The 2014 balance sheet of Jordan’s Golf Shop, Inc., showedlong-term debt of $5.2 million, and the 2015 balance sheet...
- Q What is the modified duration of an 5%bond with 15 years to maturity that is trading at a yield of8%?Assume that coupon is paidsemi-annually.(Keep your answer to 2 decimal places,...
- Q Halliford Corporation expects to have earnings this coming yearof $ 2.84 per share. Halliford plans to retain all of its earningsfor the next two years.? Then, for the subsequent two?...
- Q Consider the following three bonds:BondCoupon RateMaturity (years)PriceA0%1.0$947.5572B7%1.0$1,014.8980C5%1.5$981.4915Assume that coupons are paid every 6 months and the face values ofall the bonds are $1,000.(a) Determine the spot rate curve. (That is,...
- Q The question came from a book called Computers in the MedicalOffice (9th Edition)illustrates the medical documentation and billing cycle. Some ofthe steps in the cycle, such as Step 2, Establish...
- Q Brazil and Peru sell coffee in the U.S. for $10 per pound. TheBrazilian Real falls from R$4:$1 to R$6:$1 while the Peruvian Solstays at the same level of Sol 3:$1....
- Q Caspian Sea Drinks is considering the purchase of a plum juicer– the PJX5. There is no planned increase in production. The PJX5will reduce costs by squeezing more juice from each...
- Q An interest rate collar has a cap strike rate of 10.00% and afloor strike rate of 9.50%. If the reference interest rate movesfrom 9.50% to 9.75%, what is the effective...
- Q Suppose that the current 1-year rate (1-year spot rate) andexpected 1-year T-bill rates over the following three years (i.e.,years 2, 3, and 4, respectively) are as follows: 1R1 = 2.54%,E(2r1)...
- Q Kate Bwalya wishes to retire in 30 years’ time and has estimatedthat she will require a monthly pension income of K24,000 per monthfor 20 years subsequent to retirement. Kate will...
- Q Given that the cash flow forecast is crucial to a project, whoshould be responsible for developing these forecasts? Should it bea team effort, and if so, who should take final...
- Q Which one would you rather have:a) The future value of $5,000 per year for 10 years to be givento you in year 10 (that is 10 years from now) when...
- Q International Business OpportunitiesWith a rationalization of why you would go to Germany to dobusiness, evaluate the competitive environment within thecountry.
- Q The New York downtown is planning to develop a piece of land andthree mutually exclusive projects were proposed. A playground with4 years of project life, a swimming pool with 5...
- Q A company is considering buying a new bottle-capping machine.The initial cost of the machine is $325,000 and it has a 10-yearlife. Monthly maintenance costs are expected to be $1200 per...
- Q Research publicly traded companies and select two companies indifferent sectors. Provide a written comparison of the capitalstructure for each. Explain your conclusions on the similaritiesand differences. What factors can you...
- Q Considering the following financial information for AtlasAwesome Manufacturing, Inc. and Delilah Superior Manufacturing Inc.Both companies are in the same industry and have identicaloperating income of $8.4 million. Atlas finances its...
- Q Millennials Are More NarcissisticRead the Point and Counterpoint arguments and answer thequestion listed below:Which argument do you agree with (point orcounterpoint)? Explain your reasoning. (one page)PointThose in college today have...
- Q Suppose ABC Corporation has an obligation to pay $10,000 and$40,000 at the end of 5 years and 7 years respectively. In order tomeet this obligation, it plans to invest money...
- Q What are some factors to consider in evaluating a company'sability to make payments on outstanding debt? Please explain thefactors rather than just providing a list.
- Q IntroductionThree Structural engineers, Huey, Luey, and Stan created HLS.The firm has been involved with industrial and commercial workrelated to the construction facilities. They have designed heatingand ventilation systems for factories...
- Q Q1. What’s the risk premium? What’s the risk-free rate typicallyconsidered to be?Q2. What duties does a company treasurer typically perform?Q3. Identify and discuss the causes of the financial crisis thatpeaked...
- Q 24*. County Bank has the following market value balance sheet(in millions, all interest at annual rates). All securities areselling at par equal to book value.Assets Liabilities and equity$ $Cash 20...
- Q What is capital structure and how important itis?write 8 sentences explaining it with detail thanks.
- Q 8. Your company's beta is 1.5 and market is 9%. In the same timetreasury bill return is 4%. You have $300,000 Equity in the firm.You have $200,000 debt in your...
- Q Geary Machine Shop isconsidering a 4-year project to improve its production efficiency.Buying a new machine press for $563637 is estimated to result in$178039 in annual pretax cost savings. The press...
- Q Free Cash FlowsRhodes Corporation: Income Statements for Year EndingDecember 31 (Millions of Dollars)20162015Sales$6,900.0$6,000.0Operating costs excluding depreciation5,175.05,100.0Depreciation and amortization151.0126.0 Earnings before interest and taxes$1,574.0$774.0Less Interest148.0129.0 Pre-tax income$1,426.0$645.0Taxes (40%)570.4258.0Net income available to common stockholders$855.6$387.0Common...
- Q Parker & Stone, Inc., is looking at setting up a newmanufacturing plant in South Park to produce garden tools. Thecompany bought some land 3 years ago for $4798465 in anticipationof...
- Q Discuss how best to evaluate methods of raising capital (bothstartup and operating), and the steps you would take in thatprocess. To what extent would you consider an Initial PublicOffering, if...
- Q Capital BudgetingThe Recycled Paper Inc. corporation is considering a projectwith the following cash flows.YearCash Flow0($75,000)1$18,5002$18,5003$18,5004$18,5005$12,5006$12,5007$12,5008$12,500Refer to the Capital Budgeting narrative. What is the paybackperiod of the proposed project?A. 1.28 yearsB....
- Q An asset used in a 4-year project falls in the 5-year MACRSclass (refer to MACRS table on page 277), for tax purposes. Theasset has an acquisition cost of $17341411 and...
- Q 6. You are considering replacing the plastic extrusion machinethat create basic moldings of the outdoor pool furniture yourcompany produces. The current extrusion machine was purchased twoyears ago for $240,000 and...
- Q Quantitative Problem 3: Assume today isDecember 31, 2019. Imagine Works Inc. just paid a dividend of $1.10per share at the end of 2019. The dividend is expected to grow at18%...
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