• Q : What is the return on assets....
    Finance Basics :

    1) What is its return on assets? 2) If its debt/equity ratio is 0.5, what is the return on equity?

  • Q : Value of a perpetual stream of payments....
    Finance Basics :

    Given an interest rate of 10% per year, what is the value at the end of 5 years of a perpetual stream of 120$ annual payments starting at the end of year 9?

  • Q : Cash disbursement on the company records....
    Finance Basics :

    The bookkeeper wrote a check for $369 but erroneously wrote down $396 as the cash disbursement on the Company's records.

  • Q : Journal entries to record the above transactions....
    Finance Basics :

    Sep. 1 Issued 10,000 shares of common stock for cash at $9 per share. Nov. Issued 1,000 shares of preferred stock for cash at $112 per share. Prepare the journal entries to record the above transactio

  • Q : Annual sinking fund....
    Finance Basics :

    Problem: Gordon Company issued $1,000,000, 10-year bonds and agreed to make annual sinking fund deposits of $80,000. The deposits are made at the end of each year into an account paying 5% annual in

  • Q : Component of a linear programming problem....
    Finance Basics :

    Which of the list of items below is not a component of a linear programming problem?

  • Q : High degree of operating leverage....
    Finance Basics :

    Firms with a high degree of operating leverage are: a)easily capable of surviving large changes in sales volume, b)usually trading off lower levels of risk for higher profits, c)significantly affect

  • Q : Company total expenses....
    Finance Basics :

    1) How much were the company's total expenses? Show your work. 2) Identify all the items that Sara Lee pay for expenses in 20x1? 3) How much cash did Sara Lee pay for expenses in 20x1?

  • Q : Riskiness and relative uncertainty of flows....
    Finance Basics :

    If the Alaska mine justifies an extra 5 percent premium over the normal cost of capital because of its riskiness and relative uncertainty of flows, does the investment decision change?

  • Q : Example of an indirect agency cost....
    Finance Basics :

    Question: When the Board of Directors carefully selects and then appoints the management team, this is an example of an indirect agency cost.

  • Q : Effect of reducing taxes and increasing cash flows....
    Finance Basics :

    Problem: Other factors held constant, higher CCA rates have the effect of reducing taxes and increasing cash flows.

  • Q : Direct reduction of cash....
    Finance Basics :

    Problem: Once opportunity costs are recognized they typically do not result in a direct reduction of cash but must be allocated as a cash outflow.

  • Q : Determining the price of the stock....
    Finance Basics :

    EZee Enterprises' common stock dividend is expected to grow at 5% for the next 2 years and then at 0% indefinitely. If the current dividend is $4 and the required return is 14%, what is the price of

  • Q : Account the risk of bankruptcy....
    Finance Basics :

    If your company is more risky than your competitors, then the discount rate should be higher. Take into account the risk of bankruptcy, default on bond payments, and other matters into your analysis

  • Q : Present value of all the cash flow....
    Finance Basics :

    Problem: You have determined the profitability of a planned project by finding the present value of all the cash flow from that project. Which of the following would cause the project to look less a

  • Q : Present value of infows approach....
    Finance Basics :

    As the discount rate becomes higher and higher, the present value of infows approaches:

  • Q : Calculate the firms liquidity ratios for each year....
    Finance Basics :

    Calculate the firm’s liquidity ratios for each year. Compare the resulting time series of each measure of liquidity (i.e. net working capital, current ratio, and quick ratio).

  • Q : Social security payments problem....
    Finance Basics :

    Mr. Road's main concern is with inflation. The inflation rate has been below 3 percent recently, but a 3 percent rate is unusually low by historical standards. His social security payments will incr

  • Q : Company variable operating expenses....
    Finance Basics :

    Estimate the company's variable operating expenses per unit, and its total fixed operating expenses per year. (express it as a cost formula.)

  • Q : External funding problem....
    Finance Basics :

    Problem: Companies have relied on external funding because of the following reason: A) reaction to the economy B) need for expansion C) change in the cost of capital D) all of the above

  • Q : Ethical case of wayne terrago....
    Finance Basics :

    Wayne Terrago, controller for Robbin Industries, was reviewing production cost reports for the year. One amount in these reports continued to bother him-advertising.

  • Q : Cost of the actual management of risk....
    Finance Basics :

    Risk management relates to reducing the cost of risk, meaning reducing the cost of the actual management of risk. People invest their money, whether it's in bonds or stocks, with the hope of acquiri

  • Q : Calculate the return on investment ratios....
    Finance Basics :

    Which of the following must occur before one can calculate the return on investment ratios for the subunits of an organization?

  • Q : Open-end mutual fund investing....
    Finance Basics :

    Assume you've decided to buy a diversified (i.e., not a sector fund) open-end mutual fund investing in U.S. common stocks. Because there are thousands of these funds available, you need to shorten y

  • Q : Standard industrial classification code....
    Finance Basics :

    Q1. What accounting firm audited its financial statements? Q2. What is its standard industrial classification (SIC) code? Q3. What industry is the company in and what is the company's ranking within t

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