• Q : Compute present value of the lease payments....
    Finance Basics :

    If Air Atlantic enters a 12-year lease with annual (end of year) payments of $500,000, what is the present value of the lease payments if the interest rate is 14%.

  • Q : Foreign exchange market....
    Finance Basics :

    The market for foreign exchange can be viewed as a two-tier market. One tier is the wholesale or interbank market and the other tier is the retail or client market. International banks provide the cor

  • Q : Compute return on equity....
    Finance Basics :

    At the beginning of the year, the net assets of Platinum & Steel Products were $334,500. The only transactions affecting stockholders' equity during the year were net income of $48,000 and dividen

  • Q : Determine the effects on the after-tax profits....
    Finance Basics :

    A project currently generates sales of $10.5 million, variable costs equal to 60% of sales, and fixed costs of $2 million. The firm's tax rate is 40%.

  • Q : Calculating projects irr....
    Finance Basics :

    Good old XYZorp is considering two mutually exclusive projects, A & B in order to expand their product line. After letting the cost accountants out of their cages,

  • Q : Finding fair values of stock....
    Finance Basics :

    We are looking at models in finding fair values of stock which may leave the impression that stock prices should not change much. As of late there have been large shifts in the prices of stock in the

  • Q : Determine level of accounts receivable....
    Finance Basics :

    The inventory turnover for this industry averages six times. If all of Vanity's sales are on credit, what average level of inventory should the firm maintain to achieve the same inventory tu

  • Q : Define self supporting growth rate....
    Finance Basics :

    What is meant by the term "self-supporting growth rate?" How is this rate related to the AFN equation, and how can that equation be used to calculate the self-supporting growth rate?

  • Q : Problems on debt, bonds, spe....
    Finance Basics :

    You are planning to invest $10,000 in ABC's bonds. Right now the stated rate of the bonds is seven percent, and the market rate is eight percent.

  • Q : Calculate the total dollar amount of discount....
    Finance Basics :

    Grider Industries, Inc. issued $8,000,000 of 8% debentures on May 1, 2012 and received cash totaling $7,098,102. The bonds pay interest semiannually on May 1 and November 1. The maturity date on these

  • Q : Prepare journal entries for the original issue....
    Finance Basics :

    ABC received $1,075,736 including accrued interest when they issued bonds on April 1, 2011. The bonds had a face value of $1,000,000 and 9% interest payable annually on Jan 2, and maturing Jan 2, 2021

  • Q : Compute the total asset turnover....
    Finance Basics :

    Using the data in the following table for a number of firms in the same industry, do the following: Compute the total asset turnover, the net profit margin, the equity multiplier, and t

  • Q : Compute the return on stockholders equity....
    Finance Basics :

    Pacific Fixtures lists the following accounts as part of its balance sheet. Compute the return on stockholders' equity if the company has sales of $20 million and the following net profit margin:

  • Q : Calculate one year expected interest rate....
    Finance Basics :

    Suppose we look in the newspaper and find the following rates: the rate on 1-year securities is 4.65%, on a similar 2-year security 6.24%, and a 3-year security 6.67%.

  • Q : Calculate the duration on bond....
    Finance Basics :

    You expect a sudden, but widely unanticipated, increase in the market rates of interest due to a change in position by the Federal Reserve. Would you rather be holding in your asset portfolio the bond

  • Q : Computing exchange rates and interest rates....
    Finance Basics :

    A Swiss bank converted 1.2 million Swiss francs to euros to make a euro loan to a customer when the exchange rate was 1.75 francs per euro.

  • Q : Calculating interest rate....
    Finance Basics :

    You can buy or sell the £ spot at $1.60 to the pound. You can buy or sell the pound 1 year forward at $1.62 to the pound. If U.S. annual interest rates are 4%, what must be the one year British

  • Q : Calculating prices of call....
    Finance Basics :

    A stock has a spot price of $35. Its May options are about to expire. One of its puts is worth $5 and one of its calls is worth $5. The exercise price of the put must be

  • Q : Compute present weighted average cost of capital....
    Finance Basics :

    The Krona Corporation is financed by 50% debt, and 50% equity. Their debt has an 8.5% annual interest rate. Their published Beta Coefficient is 1.57. The Risk Free Rate on U.S. Treasury Securities is

  • Q : Dicuss scarcity concepts....
    Finance Basics :

    Scarcity implies that people cannot have everything that they want. Their resources are limited, so they must choose which of the many possible goods and services they will have.

  • Q : Calculating maximum amount on investment....
    Finance Basics :

    An investment promises to pay $6,000 at the end of each year for the next five years and $4,000 at the end of each year for years 6 through 10.

  • Q : Compute financial statement ratios....
    Finance Basics :

    What are the primary groups that compute or use financial statement ratios? Identify the primary concerns of each group.

  • Q : Calculate principal and interest balance....
    Finance Basics :

    Your family members know you are taking this class and you learned about time value of money. Four of them came separately to ask questions relating to time value of money.

  • Q : Determine annual retirement benefit....
    Finance Basics :

    A small business owner (Craig Osborn) has a defined-benefit retirement plan for him and three employees. At retirement, Craig will get 50% of his last-year before retirement's annual salary while each

  • Q : Revenues in governmental fund accounting....
    Finance Basics :

    The term deferred revenues seems out of place in governmental fund accounting. It would seem that a government either has or does not have expendable financial resources as a result of property tax, g

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