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Horizon, Inc. has sales of $250,000, costs of $150,000, depreciation expense of $30,000, and interest paid of $10,000. The tax rate is 40 percent. How much net profit after taxes did Horizon, Inc. e
Candy Corporation had pretax profits of $1.2 million, an average tax rate of 34 percent, and it paid preferred stock dividends of $50,000. There were 100,000 shares outstanding and no interest expen
1. explain how rapidly expanding sales can drain the cash resources of a firm? 2. discuss the relative volatility of short- and long- term interest rates?
Clap Off manufacturing uses 1,300 switch assemblies per week and then records another 1,300. If the relevant carrying costs per switch assembly is $5 and the fixed order cost is $575, is the company
A company issues a ten-year bond at par with a coupon rate of 6% paid semi-annually. The YTM at the beginning of the third year of the bond (8 years left to maturity) is 7.8%. What was the percentag
Gremlin Industries will pay a dividend of $1.80 per share this year. It is expected that this dividend will grow by 4% per year each year in the future. The current price of Gremlin's stock is $22.4
what would the average nominal interest rate on a five-year Treasury bond have to be? (b) what would the average nominal rate have to be for a 10-year Treasury bond with the same characteristics?
What will the account be worth in 20 years if the rate of return remains 8 percent throughout the period? B) If the money is in a taxable account instead, what will the account be worth (same condit
Slick decides to buy an out-of-the-money call option on Apple because it is cheaper. He buys 5 contracts of the April 675 at $40. Ignoring commissions and taxes, if Apple reaches $750 by April, what
He observes that the January 620 call is priced at $46, while the April 600 call is priced at $75. What are two reasons why the April 600 call is more expensive than the January 620 call?
Assume that the stock reaches $75 in one year. Ignoring commissions, taxes, and dividends, what is the return on Slick's margin transaction?
What would the minimum yield on a similarly-rated ten-year corporate bond have to be in order to make the investor choose it over the Maplewood bond? 1. 1.302% 2. 3.577% 3. 4.152% 4. 5.284%
If you can negotiate a nominal annual interest rate of 8 percent and you wish to pay for the car over a 5-year period, what are your monthly car payments? How much is your interest payment in the se
If Valence's earnings are expected to grow by 6% per year, these payout rates do not change, and Valence's equity cost of capital is 8%, what is Valence's share price?
It could be sold for $40 at the end of its life. The new meter costs $14 per year to operate and maintain. If the cost of capital is 12% then.
Suppose prices increase at the inflation rate, but costs increase at half the inflation rate. What is the value of the apple groves?
What are the differences between the types of Book Depreciation.What is the impact of using the ½ year convention in the MARCS method of Tax depreciation?
The price of a bond, par value $1000, at the beginning of a period is $990 and $985 at the end of the period. What is the holding period return if the annual coupon rate is 4.5%?
If Sultan's earnings are expected to grow by 7% per year, these payout rates do not change, and Sultan's equity cost of capital is 9%, what is Sultan's share price?
You have other than an old car and some beatup funiture, and you can invest the money in a bond that pays 4.6 percent interest annually, how long will it be before you are a millionaire?
Dressler Engine Tuning just decided to save money each year for the next 4 years to help fund a new building. If it earns 5.5 percent on its savings, how much will the firm have saved at the end of
Mr. Miser loans money at an annual rate of 16 percent. Interest is compounded daily. What is the actual rate Mr. Miser is charging on his loans?
Suppose investment A and investment B have identical expected cash flows. Why would an investor pay more for investment A than investment B?
After that time, they feel the business will be worthless. Marko has determined that a rate of return of 11 percent is applicable to this potential purchase. What is Marko willing to pay today to bu