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Assume that no costs other than the call premium would be incurred to call and refund the bonds, and also assume that the yield curve is horizontal, with rates expected to remain at current levels o
Bonds with an A rating are selling for 50 basis points above the 20-year Treasury bond rate. What is the borrowing cost to do this transaction?
Windy Burgers is trying to determine when to harvest a herd of cows that it currently owns. If it harvests the herd in year 1, the NPV of the project would increase over an immediate harvest by 25 p
Cash expenses will be $5 million, and depreciation expenses will be $1 million per year. If the firm takes that project, then it will reduce the cash revenues of an existing project by $2 million. W
The current ratio in the company, for which you are a financial analyst, is 3 to 1. The average for other firms in the industry is 1.6 to 1. Management has asked you to evaluate the company's ratio,
In looking at an analysis of financial statements that you have prepared for your employer, a management team member points out that the gross profit margin rate has declined in each of the past thr
Explain how the Capital Asset Pricing Model (CAPM) works. What are the strengths and weaknesses of the CAPM? Using each of these four stocks Hess Corporation, Conoco Phil, Exxon mobile and Murphy oi
The new clubs will also require increase in new working capital of $1,400,000 that will be returned at the end of the project. The capital rate is 40 percent, and the cost of capital is 10 percent.
Calculate the expected rate of return on investments X and Y using the most recent year's data. Assuming that the two investments are equally risky, which one should Douglas recommend? Why?
Long-term bonds face interest-rate risk; short-term bonds face reinvestment-rate risk. How is the value of a typical corporate bond determined?
Calculate the inventory turnover for each year. Comment on your findings. What would have been the amount of inventories in 2011 if the 2010 turnover ratio had been maintained?
Determine the receivables turnover in each year. Calculate the average collection period for each year. Based on the receivables turnover for 2010, estimate the investment in receivables if net sales
A firm has an ROE of 3%, a debt/equity ratio of .5, a tax rate of 35%, and pays an interest rate of 6% on its debt. What is its operating ROA?
The expected value of Hong Kong dollar is HK$7.8088. What are the expected dollar cash flows of Muchi Muchi's Co.?
Stright-line depreciation to zero over the four-year life; zero salvage value; price= $54; variable costs= $42; fixed costs= $185,000; quanity sold = $90,000 units; tax rate= 34 percent. How sensiti
Given an interest rate of zero percent, the future value of a lump sum invested today will always: (Points : 3) remain constant, regardless of the investment time period.
Define and discuss empowerment in relationship to being a good leader. Provide an example of a manager or someone you know who has empowerment skills.
Determine the before-tax benefit or loss of accepting the quantity discount. (Assume the carrying cost remains at $0.40 per box whether or not the discount is taken.)
Ordering costs are $100 per order, and the carrying cost, as a percentage of inventory value, is 80 percent. The purchase price to CCC is $0.50 per gallon.
Fullerton Wine Company is a retailer which sells vintage wines. The company has established a policy of reordering inventory every 30 days. A recently employed MBA has considered Fullerton's invento
IT Best Practices for Financial Managers references the pervasiveness of enterprise systems in financial functions. Describe experiences working with such systems. What "key end-to-end finance process
The company depreciates its assets on a straight-line basis and has a marginal tax rate of 40 percent. What is the internal rate of return on this investment?
Would you recommend borrowing from a bank at an 18 percent annual interest rate to take advantage of the cash discount offer? Explain your answer.
Currently, the firm is operating at full capacity. All costs and assets vary directly with sales. The firm does not want to obtain any additional external equity. At the sustainable rate of growth,
A company is planning to invest $100,000 (before tax) in a personnel training program. The $100,000 outlay will be charged off as an expense by the firm this year (year 0).