• Q : Calculate total debt ratio....
    Finance Basics :

    A company has a long term debt equity ratio of 4. Shareholders equity is 1 million dollar. Current assets are $200,000 & the current ratio is 2.

  • Q : Calculate average collection period....
    Finance Basics :

    Chick's Chicken has average accounts receivable of 6,333 dollar. Sales for the year were $9,800. Calculate its average collection period?

  • Q : Current ratio....
    Finance Basics :

    How would the following actions affect a company current ratio?

  • Q : Selection of a project....
    Finance Basics :

    Compare two investment options. The cost to invest in either option is the same today. Both options will provide you with dollar 20,000 of income.

  • Q : Determine sustainable rate of growth....
    Finance Basics :

    The Green Giant has a 5 percent profit margin and a 40 percent dividend payout ratio. The total asset turnover is 1.40 & the equity multiplier is 1.50. 

  • Q : Multiplier ratio and common size income statement....
    Finance Basics :

    A company has sales of $1,200, net income of 200 dollar, net fixed assets of $500, & current assets of $300. The company has dollar 100 in inventory.

  • Q : Determine amount of capital spending....
    Finance Basics :

    Teddy's Pillows has starting net fixed assets of $480 & ending net fixed assets of $530. Assets valued at $300 were sold during the year. Depreciation was 40 dollar.

  • Q : Calculate profit margin and ebitda....
    Finance Basics :

    Burger Corp has 500,000 dollar of assets, and it uses only common equity capital [zero debt]. Its sales for the last year were $600,000, & its net income after taxes was 25,000 dollar.

  • Q : Cost of loan from bank....
    Finance Basics :

    Which do you prefer: a bank account that pays 5 percent per year (EAR) for three years or An account that pays 2.5 percent every six months for three years?

  • Q : Create a vertical analysis....
    Finance Basics :

    Using the information in these abbreviated income statements, create a vertical analysis.

  • Q : Inventory to support new sales....
    Finance Basics :

    Collins Office Supplies is considering a more liberal credit policy to raise sales, suppose Collins also requires raising its level of inventory to support new sales and that inventory turnover is 4 t

  • Q : Determine incremental after tax return....
    Finance Basics :

    Collins Office Supplies is considering a more liberal credit policy to raise sales, but expects that 9% of the new accounts will be uncollectible.

  • Q : Calculate wacc....
    Finance Basics :

    Well Importers balance sheet shows $300 million in debt, 50 million dollar in preferred stock, and $250 million in total common equity. Well faces a 40 percent tax rate.

  • Q : Relationship between debt and dividends....
    Finance Basics :

    Most capital structure models ignore dividends, & most dividend models suppose firms use only equity financing. However, there are causes to believe that capital structure and dividend policy are

  • Q : Calculate the dollar cost of the possible hedges....
    Finance Basics :

    Assume we have 50,000,000 euro payable in one year and the one year forward value is euro 0.74. There is also a call available for a premium of euro 0.15 for a one year expiration at a strike of euro

  • Q : Using the direct distribution method....
    Finance Basics :

    Use the following data to allocate costs to the mission centers using the direct distribution method:

  • Q : Current yield and capital gains yield....
    Finance Basics :

    Meade Corporation bonds mature in six years & have a yield to maturity of 8.5%.  The par value of the bonds is 1,000 dollar. The bonds have a 10% coupon rate and pay interest on a semiannual

  • Q : Effective annual rate....
    Finance Basics :

    Steaks Galore needs to arrange financing for its expansion program. The bank offers to lend the required 1,000,000 dollar on a loan which requires interest to be paid at the end of each quarter.

  • Q : The cost of glob of employing a tester averages....
    Finance Basics :

    The cost of Glob of employing a tester averages out to 220 dollar per day. Make the graph showing total rate expenditures for different numbers of testers employed.

  • Q : Benefit cost ratios for the tree cost of capital....
    Finance Basics :

    Construct benefit cost ratios for the tree cost of capital scenarios posited here. To what extent does a benefit cost ratio analysis hold the conclusions you derive using a Net present value analysis?

  • Q : Feasibility study....
    Finance Basics :

    The information presented in Exhibits X and Y proposes that the feasibility study that was carried out was extremely special and ignored a number of main things.

  • Q : Merits of the proposed project....
    Finance Basics :

    Use the information in Exhibits X and Y, what are some alternative techniques we can take assessing the merits of this proposed project?

  • Q : Compute the after tax rate of return....
    Finance Basics :

    The EBIT increase rate must equal the dividend increase rate for each firm. Compute the after tax rate of return on each company reinvestment of earnings.

  • Q : Find each company expected dividend....
    Finance Basics :

    Company A and B have time zero EBIT of $1,000. The required return on equity for both of these unlevered companies is 10%. The marginal corporate tax rate is 34 percent.

  • Q : Calculate the market value of the resulting levered company....
    Finance Basics :

    Assume Company A is levered with $12 million of 7% bonds. Calculate the market value of the resulting levered Company B?

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