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What political realities might explain the Federal Reserve Act of 1913 placed two Federal Reserve banks in Missouri? Explain in one paragraph.
Investors believe that the firm (anddividends) will grow at 15% next year, 10% annually for the two years after that, and 5% annually there after. Assume the required return is 10%. What is the curr
Explain the following statement: "While the balance sheet can be thought of as a snapshot of the firm"s financial position at a point in time.
Consider the market for a specific bond, a one-year pure discount bond with a face value of $100. Suppose that expected inflation is 2% and that, in equilibrium, firms issue bonds at a market price
Tangshan Mining has common stock at par of $200,000, paid in capital in excess of par of $400,000, and retained earnings of $280,000. In states where the firm's legal capital is defined as the par
Shao Industries is considering a proposed project for its capital budget. What is the project"s expected NPV, its standard deviation, and its coefficient of variation?
If total costs consisted of a fixed cost of $10,000 per year and variable costs of $95 per unit, and if only the variable costs were expected to increase with inflation, would this make the project
Strategic decision makers are required to be able to evaluate projects based on the long-term objectives of the firm as well as the project's ability to earn the company additional compensation. The
What is the net cost of the spectrometer? (That is, what is the Year 0 net cash flow?) What are the net operating cash flows in Years 1, 2, and 3?
A private energy trading company is considering the acquisition of a heavy crude container. This is to handle a variety of stocks that are expected to last for the next 5 years.
Differentiate between direct and indirect costs of bankruptcy. Which of the two is generally more significant?
The Niendorf Corporation produces teakettles, which it sells for $15 dollars each. Fixed costs are $700,000 for up to $400,000 units of output. Variable costs are $10 per kettle
What is the net cost of the machine for capital budgeting purposes? (That is, what is the Year 0 net cash flow?) What are the net operating cash flows in Years 1, 2, and 3?
Nixon Communications is trying to estimate the first-year operating cash flow (at t = 1) for a proposed project. The company faces a 40 percent tax rate. What is the project"s operating cash flow for
Define each of the following terms: Sensitivity analysis; scenario analysis; Monte Carlo simulation analysis. Risk-adjusted discount rate; project cost of capital.
A debt of $4000 with interest at 12% compounded semi annually, is to be repaid by semi-annual payments of $400 each. Find the number of full payments needed and the final payment.
Assume that machine prices are not expected to rise because inflation will be offset by cheaper components used in the machines. If the cost of capital is 10 percent, which machine should the comp
Suppose Laura Luckett believes the Korean won will rise in value against the U.S. dollar by March, and took an appropriate position in March futures contract in the amount of 1,000,000,000 won. Assu
Inflation in operating costs, airplane costs, and fares is expected to be zero, and the company"s cost of capital is 12 percent. By how much would the value of the company increase if it accepted
How should environmental effects be considered when evaluating this, or any other, project? How might these effects change your decision in part b?
Budgeting in uncertainty is challenging. The decisions made by budget managers affect the direction and future of every company. Having a thorough understanding of the components of capital budgetin
Why do the different types of bonds get different rates? Explain your answer. What makes each of the different structures different? Explain your answer.
What is the operating income (EBIT) for both firms?b. What are the earnings after interest?c. If sales increase by 10 percent to 11,000 units, by what percentage will each firm's earnings after inte
In 400 words respond to the following questions with your thoughts, ideas, and comments: Understanding the differences between the stock market and the bond market is essential to managing corporati
What are three methods for estimating the cost of common stock from retained earnings? Which of these methods provides the most accurate and reliable estimate?