• Q : Systematic or unsystematic risk factor....
    Finance Basics :

    I want to know whether each of the following is mostly a systematic or unsystematic risk factor. 1) Bernie Ebbers resigns unexpectedly as CEO of MCI Corporation 2) Disney receives an unsolicited bid f

  • Q : Jobs involving a financial function....
    Finance Basics :

    As an example take a look at the company or organization you work in and identify those people whose jobs involve a financial function. Describe those positions and the activity and discuss how vita

  • Q : Leverage and break even....
    Finance Basics :

    The degree of financial leverage before expansion at sales of $4 million and for all three methods of financing after expansion (assume sales of $5 million for all three methods of financing after e

  • Q : Incremental irr rule to make the correct decision....
    Finance Basics :

    You can undertake only one project. If your cost of capital is 8% use the incremental IRR rule to make the correct decision.

  • Q : Incremental revenue associated with the price reduction....
    Finance Basics :

    What is the incremental cost associated with producing an extra 50,000 jars of sauce? What is the incremental revenue associated with the price reduction of $0.30 per jar?

  • Q : Expected return on the market-stock in portfolio....
    Finance Basics :

    Question 1. A stock has an expected return of 13 percent, its beta is 0.55, and the risk-free rate is 7.15 percent. What must the expected return on the market be? Question 2. You own a portfolio eq

  • Q : Approximate annual payments of the loan....
    Finance Basics :

    Problem 1: You have been approved for a $70,000 loan toward the purchase of a new home at 10% interest. The mortgage is for 30 years. How much are the approximately annual payments of the loan? Hint

  • Q : Playing stock market is like gambling....
    Finance Basics :

    Playing the stock market is like gambling. Such speculative investing has no social value, other than the pleasure people get from this form of gambling.

  • Q : Fixed and variable costs associated with machines....
    Finance Basics :

    The fixed and variable costs associated with the two machines are shown below, along with the capital (all equity) that must be invested to purchase each machine. The expected sales level is 27,000

  • Q : Vertical versus horizontal analysis....
    Finance Basics :

    Should someone put more emphasize on one type over the other? These two methods are only two methods in an entire arsenal of ways of analyzing a company. Both have benefits and limitations. Everybod

  • Q : What about the vertical analysis....
    Finance Basics :

    But, what about the vertical analysis. When the horizontal analysis becomes distorted because of extraordinary events. Does the vertical analysis tend to become distorted by these same scenarios?

  • Q : Calculate the after-tax cost of borrowing....
    Finance Basics :

    A Eurobond offering would require an 8-1/8% coupon with interest payable annually and $1,100,000 of flotation expense. 1) Calculate the after-tax cost of borrowing for each alternative.

  • Q : Compute an exponential smoothing forecast....
    Finance Basics :

    Compute an exponential smoothing forecast with a=0.20, an adjusted exponential smoothing forecast with a=0.20 and b=0.20 and a linear trend line forecast. Compare the three forecasts using MAD and a

  • Q : Huge disadvantage of using credit....
    Finance Basics :

    Problem 1. Of the following statements, which is not a huge disadvantage of using credit?

  • Q : Payments made during the billing period....
    Finance Basics :

    If creditors give you no credit for payments made during the billing period, this is called the

  • Q : How easy is it for investors to hedge in the real world....
    Finance Basics :

    The above example shows how an investor could possibly use stocks that move in opposite directions to hedge. Do you think this is pretty difficult to do in real life?

  • Q : How are nyse and nasdaq similar....
    Finance Basics :

    QUESTION 1. How are NYSE and NASDAQ similar, if at all? QUESTION 2. How are the two exchanges different from one another, if at all?

  • Q : Calculate the expected return on each stock....
    Finance Basics :

    Q1. Calculate the expected return on each stock. Q2. Calculate the standard deviation of returns on each stock.

  • Q : Operating a landscaping business....
    Finance Basics :

    You have just inherited $ 10 million. Rather than kicking back and avoiding all work, you are contemplating starting and operating a landscaping business with a friend that would require each of you

  • Q : Financial decision making of the firms top managers....
    Finance Basics :

    Problem 1: What role does the cost of capital play in the overall financial decision making of the firm's top managers? Problem 2: Why do you think debt offerings are more common than equity offerings

  • Q : Expected annual cost of the current maintenance policy....
    Finance Basics :

    What is the expected annual cost of the current maintenance policy with station employees performing maintenance?

  • Q : Advantage-disadvantages of students using student loans....
    Finance Basics :

    I am conducting a detail study on the advantage and disadvantages of university students using student loans. Please tell me the backgrounds/objectives of student loans?

  • Q : Degree of operating leverage-degree of financial leverage....
    Finance Basics :

    Construct the income statement for the two alternative financing plans. Calculate the degree of operating leverage, the degree of financial leverage, and the degree of combined leverage, after expan

  • Q : Assessing banking decisions....
    Finance Basics :

    Major Manufacturing currently has one bank account located in New York to handle all of its collections. The firm keeps a compensating balance of $300,000 to pay for these services (see Section 19.7

  • Q : Risks associated with the aggressive plan....
    Finance Basics :

    If Christensen's earnings before interest and taxes are $325,000, what would be the net income under a aggressive plan? under a conservative plan? What could be the risks associated with the aggress

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