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What would be the derpciation expense be each year under each method? Which depreciation method would producte the higher NPV, and how much higher would it be?
Williams Oil Company has a return on stockholders' equity of 18 percent during 2006. Its total asset turnover was 1.0 times, and its equity multiplier was 2.0 times. Calculate the company's net prof
In 2008 the MKA Corporation reports EPS of $5.75, ROE equals 15% and the company has a dividend payout ratio of 60%. Calculate the dividend growth rate.
A U.S. firm purchase raw material on credit and has to pay ¥10 million three months from now. The spot exchange rate is ¥95/$ and the forward rate is ¥96/$. Is the yen selling at a forwa
Fairchild Garden Supply expects $600 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses this equation to forecast inventory requirements at different levels of s
China American Manufacturing has a beta of 1.50, the risk-free rate of interest is currently 12 percent, and the required return on the market portfolio is 18 percent.
Assume that the risk -free rate is 55 and the market risk premium is 6%. What is the expected return for the overall stock market? What is the required rate of return on a stock with a beta of 1.2?
In March 2005, General Electric (GE) had a book value of equity of $113 billion, 10.6 billion shares outstanding, and a market price of $36 per share. GE also had cash of $13 billion, and total debt
What is the function of the international money market? Briefly describe the reasons for the development and growth of the European money market. Explain how the international money, credit, and bon
Air Purifier, Inc., computes its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $2,400,000, but 15 percent of this value is represented
Hewitt Packing Company has an issue of $1,000 par value bonds with a 14 percent coupon interest rate outstanding. The issue pays interest semiannually and has 10 years remaining to its maturity date
Rex Corp's EBITDA last year was $415,000 (= EBIT + depreciation + amortization), its interest charges were $10,000, it had to repay $25,000 of long term debt, and it had to make a payment of $20,000
The firm has the option to renew the loan at market rates. Alternatively, Wicker can sell 8.5 percent coupon bonds with a 2-year maturity and $1,000 par value at a price of $973.97. How many percent
What are the rates with continuous compounding? What is the forward rate for the six-month period beginning in 12 months (i.e., F12,18)? What is the value of an FRA that promises to pay you 5.0% (comp
Griswold allows its customers 40 days in which to pay for the batteries, and the firm pays its suppliers in 30 days. Under these conditions, what is the dollar amount of working capital Griswold mus
If the bonds sell in the market for $84, what is an estimate of the bankruptcy costs for the corporation? Assume a cost of debt of 10%.
One year ago, you purchased a stock at a price of $32.16. The stock pays quarterly dividends of $0.20 per share. Today, the stock is selling for $28.20 per share. What is your capital gain on this i
Slipshod Machine Tool Co. owes $40,000 to one of its suppliers. The supplier has offered a trade discount of 2/10 net 30. Slipshod can borrow the funds from either of two banks: First City Bank wil
The risk-free rate is 6 percent, the market risk premium is 5 percent, and the company's beta equals 1.2. What is the expected price of the stock five years from now?
Prepare in general journal form the budgetarty entry the debt service fund would make to account for this serial bond issue. what adjustmens,if any, would need to be made to the General Fund budget
Velcro Saddles is willing to pay $14 million cash for Pogo. The opportunity cost of capital is 8 percent. What is the gain from merger?
Duval Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Duval would have 600,000 shares of stock outstanding
Discuss the distributions of principal, interest, and the balance over the life of the loan. You must submit your backup in Excel or other supporting documentation showing how answers were reached.
Lorraine Jackson won a lottery. She will have a choice of receiving $25,000 at the end of each year for the next 30 years, or a lump sum today. If she can earn a return of 10 percent on any investme
Find the last 4 years' sales and profit or net income data for a major retail corporation. Calculate profit as a percentage of sales; be careful to place the decimal point correctly. Prepare a paragr