• Q : Percentage of total inventory costs....
    Finance Basics :

    Using the percentage of total inventory costs, if these were her total inventory costs, what items should be classified as A items? What items are C items?

  • Q : Computing the current price of bond....
    Finance Basics :

    Madison Corporation has a $1,000 par value bond outstanding which pays an annual interest of $70 dollars. The bond matures in 20 years. If the present yield to maturity for this bond is 9%, calculat

  • Q : Explain what is an opportunity cost....
    Finance Basics :

    Explain what is an opportunity cost? How is this concept used in TVM analysis? Clearly state whether or not you think the opportunity rate a single number that is used in all situations.

  • Q : Explain what is an opportunity cost....
    Finance Basics :

    Explain what is an opportunity cost? How is this concept used in TVM analysis? Clearly state whether or not you think the opportunity rate a single number that is used in all situations.

  • Q : Determining the time value of the option....
    Finance Basics :

    A Call Option on the stock of XYZ Company has a market price of $9.00. The price of the underlying stock is $36.00, and the strike price of the option is $30.00 per share. What is the Exercise Value

  • Q : Resulting net payments....
    Finance Basics :

    Suppose A issues floating-rate debt and B issues fixed-rate debt, after which they engage in the following swap: A will make a fixed 7.95% payment to B, and B will make a floating-rate payment equal

  • Q : Price of the underlying stock....
    Finance Basics :

    The Exercise (Strike) Price on ABC Company's Option is $21.00, its Exercise Value is $23.00, and its Time Value is $7.00. What is the Market Value of the Option? What is the price of the underlying

  • Q : Time value of the option....
    Finance Basics :

    A Call Option on the stock of XYZ Company has a market price of $9.00. The price of the underlying stock is $36.00, and the strike price of the option is $30.00 per share. What is the Exercise Value

  • Q : Current price of the bond-ytm....
    Finance Basics :

    ABC Company has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond if the YTM is 16 percent? Assume annual payments.

  • Q : Unsecured short-term funds....
    Finance Basics :

    Commercial banks lend unsecured short-term funds in the following three basic ways:

  • Q : Estimate the value of wallace industries stock....
    Finance Basics :

    Wallace Industries paid a dividend of $1.85 on its common stock yesterday. The dividends of Wallace Industries are expected to grow at 8% per year indefinitely. If the risk free rate is 4% and inves

  • Q : Determining the firm pre-tax income....
    Finance Basics :

    Soenen finances its net working capital with a bank loan at an 8% annual interest rate, and it uses a 365-day year. If these changes had been made, by how much would the firm's pre-tax income have i

  • Q : Implied interest rate yield on treasury bond....
    Finance Basics :

    What is the implied interest rate yield on a Treasury Bond ($100,000) futures contract that settled at 100'24 (or 100 24/32)? If interest rates increased by 0.75%, what would be the contract's new v

  • Q : How much free cash flow did the firm generate....
    Finance Basics :

    Hartzell Inc. had the following data for 2011, in millions: Net income = $600; after-tax operating income [EBIT(1 - T)] = $700; and Total assets = $2,000. Information for 2012 is as follows: Net inc

  • Q : Annual coupon rate on bond....
    Finance Basics :

    "The current price of a 10-year, $1,000 par value bond is $1,158.91. Interest on this bond is paid every six months, and the simple annual yield is 14 percent. Given these facts, what is the annual

  • Q : Computing covered interest arbitrage....
    Finance Basics :

    Today, the one-year U.S. interest rate is 3%, while the one-year interest rate in Mexico is 8%. The spot rate of the Mexico peso (MXP) is $.08 The one-year forward rate of the MXP exhibits a 11% dis

  • Q : Covered interest arbitrage....
    Finance Basics :

    Assume the following information: Current spot rate of Australian dollar = $.90 Forecasted spot rate of Australian dollar 1 year from now = $.88 1-year forward rate of Australian dollar = $.91 Annua

  • Q : Estimating current ratio....
    Finance Basics :

    During 2005, kewell's days sales oustanding was 40 days. The industry average DSO was 30 days. Assume instead that in 2005, Jewell had been able to achieve the industry average DSO without reducing

  • Q : Estimating current ratio....
    Finance Basics :

    During 2005, kewell's days sales oustanding was 40 days. The industry average DSO was 30 days. Assume instead that in 2005, Jewell had been able to achieve the industry average DSO without reducing

  • Q : Probability distribution of one-year hpr....
    Finance Basics :

    Derive the probability distribution of the one-year HPR on a 3-year U.S. Treasury bond with an 8% coupon (paid semiannually) if it is currently selling at par and the probability distribution of its

  • Q : Expected npv-variance and standard deviation....
    Finance Basics :

    Calculate the expected NPV for both projects. Can the question be resolved with this information alone? Calculate the variance and standard deviation of the NPVs for both projects. Which project appea

  • Q : Cost of the preferred stock for womileg....
    Finance Basics :

    Womileg Industries plans to issue $70 par preferred stock with an 8 percent dividend to raise funds. The stock is selling on the market for $56, and Maness must pay flotation costs of 6 percent of t

  • Q : Computing cost of issuing preferred stock....
    Finance Basics :

    Hybrid Hydro Plants, Inc., which has a marginal tax rate equal to 34 percent, has a preferred stock that pays a constant dividend equal to $15 per share. The stock currently sells for $125. If the c

  • Q : Cash flow to stockholders....
    Finance Basics :

    The 2009 balance sheet of Maria's Tennis Shop, Inc., showed $730,000 in the common stock account and $6.2 million in the additional paid-in surplus account. The 2010 balance sheet showed $775,000 an

  • Q : Cash flow to creditors....
    Finance Basics :

    The 2009 balance sheet of Maria's Tennis Shop, Inc., showed longterm debt of $2.4 million, and the 2010 balance sheet showed long-term debt of $2.5 million. The 2010 income statement showed an inte

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