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In 2012, ABC had operating income (EBIT) of $19,529, interest expense of $1,491, and dividend expense of $3,145. If the tax rate is 44%, what is the transfer to Retained Earnings?
ABC Co needs to acquire equipment at a cost of $2,500,000 {includes set up costs of $225,000 deemed to be capitalized} belonging to Class 8 (CCA Rate 20%).
Six years from now, you will be inheriting $100,000. What is this inheritance worth to you today if you can earn 6.5 percent interest, compounded annually?
Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50/50 basis. Which type of entity did they create if they have no personal liability for the
You and your brother are planning a large anniversary party 3 years from today for your grandparents' 50th wedding anniversary. You have estimated that you will need $2,500 for this party. You can e
If the firm had made a purchase of $100,000 for which it had been given terms of 2/10 net 30, would it increase the firm's profitability to give up the discount and not borrow as recommended in part
Suppose that the payoff from an investment depends upon market conditions. A great market has payoff of $200,000, a normal market has a payoff of $100,000, and a poor market has a payoff of $20,000.
If the risk free rate is 4% and the market risk premium is 7%, how much is the additional premium that Ethier's shareholders require to be compensated for financial risk?
Avril synchronistics will pay a dividend of $1.30 per share this year. it is expected that this dividend will grow by 5% each year in the future. What will be the current value of a share of avril's
Booher Book Stores has a beta of 1.3. The yield on a 3-month T-bill is 5% and the yield on a 10-year T-bond is 6.5%. The market risk premium is 6%. What is the estimated cost of common equity using
You have 32 years left until retirement and want to retire with $4.3 million. Your salary is paid annually, and you will receive $66,000 at the end of the current year.
A company is growing at a constant rate of 8 percent. Last week it paid a dividend of $3.00. If the required rate of return is 15 percent, what is the price of the stock three years from now?
Discuss why sunk costs should not be included in project cash flows but opportunity costs and externalities should. Give an original example of each of these costs.
Video Toys manufacturers and sells arcade games. Dividends are currently $1.50 per share and are expected to grow at a 15% compound annual rate over the next three years.
How much could you withdraw annually in equal beginning of year amounts starting at the time you make your last deposit and continuing for a total of 20 years, assuming balances continue to earn 6%
Kanwai fans produces 25,000 fans per day at a cost of $7.50 each (material and labor). It takes the firm 12 days to convert raw materials into a fan and sell ir.
Evaluate in-N-Out's performance relative to customer expectations. What is the outcome of this process? Do you think in-N-out should adopt a high-growth strategy? Why or why not?
Storico Co. just paid a dividend of $1.60 per share. The company will increase its dividend by 20 percent next year and will then reduce its dividend growth rate by 5 percentage points per year unti
What is the rational for the Federal Reserve Board keeping the federal rate to a nominal rate in recent years? How does this effect the financial markets?
Chasteen, Inc. is considering an investment with an initial cost of $185,000 that would be depreciated straight-line to a zero book value over the life of the project.
Miller Brothers is considering a project that will produce cash inflows of $61,500, $72,800, $84,600, and $68,000 a year for the next four years, respectively.
The American Flag Corporation (AFC) wants to determine the effect of its inventory turnover and days sales outstanding (DSO) on it's cash flow cycle. Last year, AFC's sales (all on credit) were $468
Convert net paid days worked to a factor for the laboratory and for medical records so these MHS managers can annualize their staffing plans.
You are planning to save for retirement over the next 30 years. To do this, you will invest $800 a month in a stock account and $400 a month in a bond account.
A bond matures in 2020 and has an annual coupon of 3.65 percent, payable on January 1 and July 1. The current price of the $1,000 bind if $978.