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Describe how present values of uneven cash flow streams are calculated using a regular calculator, using a financial calculator, and using a spreadsheet.
Why does an investment have an opportunity cost rate even when the funds employed have no explicit cost?
Assume that the stock price falls and the net is only $9,500 when the stock is sold. What is the dollar return and rate of return?
Epitome Healthcare has just borrowed $1,000,000 on a five-year annual payment term loan at a 15 percent rate. Construct the amortization schedule for this loan.
You have determined that the appropriate opportunity cost (discount) rate is 8 percent, compounded quarterly. What is the value of this investment?
Assume that you just won $35 million in the Florida lottery, and hence the state will pay you 20 annual payments. What is the present value of your winnings?
What is the present value of a perpetuity of $100 per year if the appropriate discount rate. What would happen to the present value of the perpetuity?
What is the effective annual rate (EAR) if the stated rate is 8 percent and compounding occurs semiannually? Quarterly?
When a loan is amortized, what happens over time to the size of the total payment, interest payment, and principal payment?
The present value of a perpetuity is equal to the payment divided by the opportunity cost (interest) rate: PV = PMT/I. What is the future value of a perpetuity?
Why does this relationship hold? Which growth rate has more meaning-the total rate over ten years or the annualized rate?
What is an opportunity cost rate? How is this rate used in time value analysis? Is this rate a single number that is used in all situations?
When constructing an amortization schedule, how is the periodic payment amount calculated?
How does the present value of a lump sum to be received in the future change as the time is extended and as the interest rate increases?
How does the future value of a lump sum change as the time is extended and as the interest rate increases?
What is a cash budget and how is it used? Should depreciation expense appear on a cash budget? Explain your answer.
Explain the relationships among the static budget, flexible budget, and actual results.
What organizational characteristics create likely candidates for zero-based budgeting?
Considering all the information in the operating budget, why do organizations need a cash budget?
Marginal cost of production is constant and equal to $20, and there are not fixed cost. What is the monopolist's profit maximizing level of output?
Assume that a primary care physician practice performs only physical examinations. Using RVU methodology, what is the estimated cost per type of examination?
Briefly explain why the base case analysis required the calculation to move up the profit and loss statement rather than down.
Describe two common pricing strategies used by price setters and their implications for financial survivability.
The Housekeeping Services department of Ruger Clinic, a multispecialty practice in Toledo, Ohio had $100000 in direct costs. What is the value of the cost pool?
Which is the better cost driver for the costs of a hospital's Financial Services department: patient services department revenues or number of bills generated?