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Suppose you run a money market fund with a true NAV of $0.9971. Suppose you just invested the entire fund in 60-day commercial paper, at a discount rate of 1%.
Jennifer adds 1,000 to her savings account on the first day of each year. Marcus adds 1,000 to his savings account on the last day of each year. They both earn 6.5 percent annual interest.
Wire house purchases its inventory one quarter to the quarter of sale. The purchase price is 55 percent of the sales price. The accounts payable period is 45 days.
You buy a stock for which you expect to receive an annual dividend of 2.10 for the fifteen years that you plan on holding it. After 15 years you expect to sell the stock for 32.25.
Most companies do not have the resident expertise to complete an initial public offering (IPO), so they hire an investment banker to help accomplish the sale. Describe three significant tasks that a
You are a risk manager in a manufacturing company and one of your key responsibilities is securing of property insurance coverage to provide protection against damage caused by "acts of God," such a
What is an incremental cash flow for a project? What concepts do we need to examine to help understand how to estimate the incremental cash flow of a project? What else is needed for deciding on whe
What is an incremental cash flow for a project? What concepts do we need to examine to help understand how to estimate the incremental cash flow of a project?
Ernie's Mufflers has current liabilities of $45 million. Cash makes up 5 percent of the current assets and accounts receivable makes up another 50 percent of current assets.
Scuba, Inc. is concerned about the taxes paid by the company in 2008. In addition to $5 million of taxable income, the firm received $80,000 of interest on state-issued bonds and $500,000 of dividen
You would like to buy shares of Ralph Lauren (RL). The current bid and ask quotes are $85.13 and $85.20, respectively. You place a market buy-order for 500 shares that executes at these quoted price
Triplette, Corp. began the year 2008 with -$5 million in retained earnings. The firm earned net income of $10 million in 2008 and paid $2 million to its preferred stockholders and $1 million to its
Caps Corp. reported sales for 2008 of $45 million. Caps listed $9 million of inventory on its balance sheet. Using a 365-day year, how many days did Caps' inventory stay on the premises?
Will's Wheels, Inc. reported a debt-to-equity ratio of .65 times at the end of 2008. If the firm's total debt at year-end was $5 million, how much equity does Will's Wheels have?
Consider the following three bond quotes: a Treasury note quoted at 102:30, a corporate bond quoted at 99.45, and a municipal bond quoted at 102.45. If the Treasury and corporate bonds have a par va
Discuss reasons why these types of companies have capital structure policies that call for relatively high levels of debt in their capital structures.
The Bear Rug has sales of $822,500. The cost of goods sold is equal to 63 percent of sales. The beginning accounts receivable balance is $41,000 and the ending accounts receivable balance is $38,000
Juno Industrial Supply has a $150,000 line of credit with a 6.5 percent interest rate. The loan agreement requires a 2 percent compensating balance, which is based on the total amount borrowed, and
The Chairman of the Federal Reserve, Ben Bernanke, is faced with a dilemma. Should the Fed increase rates to contain inflation; or, should the Fed keep rates very low to spur the US economy which is
On June 30 of the current year, Rural Gas & Electric Co. issued $50,000,000 face value, 9 percent, 10-year bonds payable, with interest dates of December 31 and June 30.
Is it ethical for this dispute - involving negligent medical care, not a breach of contract - to be forced into arbitration?
The managers at KFS have heard that corporate governance can affect shareholder value. What is corporate governance? List five corporate governance provisions that are internal to a firm and are und
The second acquisition target is a privately held company in a growing industry. The target has recently borrowed $40 million to finance its expansion; it has no other debt or preferred stock.
The first acquisition target is a privately held company in a mature industry owned by two brothers, each with 5 million shares of stock.