Finance question and answers for July 03, 2023
- Q Below are returns on the stock A and S&P500 index. Allnumbers are in decimals (-0.0222 is equivalent to -2.22%).AS_P500-0.02220.0032-0.0048-0.00580.13330.04340.07650.1081-0.0161-0.01210.12500.14000.01450.0368-0.0475-0.04540.04300.0577-0.0260-0.13740.00710.00640.02490.01860.08500.0215-0.0624-0.07520.09330.03650.04560.0528-0.0632-0.01310.04500.00090.02000.00170.02800.0985Assuming normal distribution, what is the probability that thenext stock A return...
- Q If you were the financial manager of this tourism company, wouldyou authorize for new investment? What calculations might you useto value the potential of the new investment?What pitfalls are associated...
- Q Water Works, Inc. has a current ratio of 1.33, currentliabilities of $540,000, and inventory of $400,000. What is WaterWorks, Inc.'s quick ratio?a1.11b0.86c1.90d0.59
- Q A company. has a project available with the following cashflows: Year Cash Flow 0 ?$34,310 1 12,780 2 14,740 3 20,150 411,420 If the required return for the project is...
- Q Samsung Inc. estimate unit sales for a new music amplifier asfollows: 75,000; 86,000; 95,000; 92,000; and 73,000 for year 1through year 5, respectively.Production of the implants will require $1,600,000 in...
- Q Ghost, Inc., has no debt outstanding and a total market value of$250,000. Earnings before interest and taxes, EBIT, are projectedto be $40,000 if economic conditions are normal. If there is...
- Q You are given the following information: State of EconomyProbability ofState of EconomyReturn onStock JReturn onStock K Bear.20?.030.024 Normal.55.128.052 Bull.25.208.082 Calculate the expected return for each of the stocks.(Do not round intermediate calculations. Enter your answersas a...
- Q You are considering a new product launch. The project will cost$800,000, have a four-year life, and have no salvage value;depreciation is straight-line to zero. Sales are projected at 200units per...
- Q After an extensive feasibility study on savings strategies thatcost $25,000, Bright Ltd is considering the purchase of newequipment costing $500,000, which it will fully finance with afixed interest loan of...
- Q Discuss the significance of the different types of smoothingtechniques.
- Q You will be evaluating three projects for Hasbro Toys. Hasbro'scost of capital or discount rate is 10%. The first project (A) willcost $25,000 initially. The project will then return cash...
- Q Table below presents the state-based returns of securities Aand B, the risk-free security and the market portfolio, wherepis the probability of each state. Use the informationtherein to answer parts aand...
- Q You have accepted a job with RBC Wealth Management as aFinancial Advisor. A 40 year old client has asked you to build hera mutual fund portfolio for her RRSP. You...
- Q A company is considering an 8-year project to expand into a newgeographical area. The project requires a new machine, which wouldcost $230,000 FOB San Francisco, with a shipping cost of...
- Q A company is considering a 3-year project that requires aninitial installed equipment cost of $10,000. The project engineerhas estimated that the operating cash flows will be $5,000 in year1, $6,000...
- Q You will be evaluating three projects for Hasbro Toys. Hasbro'scost of capital or discount rate is 10%. The first project (A) willcost $25,000 initially. The project will then return cash...
- Q Project cash flow and NPV.The managers of Classic AutosIncorporated plan to manufacture classic Thunderbirds? (1957replicas). The necessary foundry equipment will cost a total of?$4,200,000 and will be depreciated using a?...
- Q The beta of four stocks-----?G, ?H, I, and J----are 0.47?,0.71?, 1.19?, and 1.55?, respectively and the beta of portfolio 1is 0.98?, the beta of portfolio 2 is 0.82?, and the...
- Q Information text Use the following information for questions 29– 34, each question is worth_________. Before attempting to answerthe questions, set up an analysis based on the given information.Chilly Cloud Corporation...
- Q You are deciding between two mutually exclusive investmentopportunities. Both require the same initial investment of $9.8million. Investment A will generate $2.11million per year?(starting at the end of the first? year)...
- Q Create a Journal entry11/1/18Dixie Iron Works, Inc. (the latest and greatestplace to pump iron from Exam 1) is opening a new location andcreating a new entity.The new location/entity will be...
- Q 1. What are the common goals and objectives of estateplanning?2. What is the gift tax annual exclusion for a non-citizenspouse?3. List all of the transfers we have learned about which...
- Q Replacement AnalysisThe Gilbert Instrument Corporation is considering replacing thewood steamer it currently uses to shape guitar sides. The steamerhas 6 years of remaining life. If kept, the steamer will havedepreciation...
- Q Fred and Barney Need some investment advice and you have beenasked to evaluate their offers. Fred is looking at a investmentthat would pay him nothing until five years from today...
- Q You are skeptical of the prospects of a particular technologystock. Therefore, you buy four put option contracts on the stock.You pay a premium of $3 per share, and each contract...
- Q Suppose you take a 27-year mortgage of $280000. The annualinterest rate is 4%, and the annual APR is 4.6%. Compounding doneon yearly basis. Loan payments are made annually. Calculate theamortized...
- Q The Spartan Technology Company has a proposed contract with theDigital Systems Company of Michigan. The initial investment in landand equipment will be $225,000. Of this amount, $180,000 is subjectto five-year...
- Q ?OpenSeas, Inc. is evaluating the purchase of a new cruise ship.The ship will cost $495 million, and will operate for 20years.OpenSeas expects annual cash flows from operating the ship to...
- Q Assume that you have decided to hedge future payables that arecoming from your Myanmar to a US MNC. How wouldthe US MNC hedge these payables? Please go through the specificsteps...
- Q Yield to maturity and future priceA bond has a $1,000 par value, 12 years to maturity, and a 8%annual coupon and sells for $980.What is its yield to maturity (YTM)?...
- Q New-Project Analysis The Campbell Company is considering addinga robotic paint sprayer to its production line. The sprayer's baseprice is $920,000, and it would cost another $21,000 to install it.The machine...
- Q Problem 19-20 Dividends versus ReinvestmentAfter completing its capital spending for the year, CarlsonManufacturing has $2,200 extra cash. The company’s managers mustchoose between investing the cash in Treasury bonds that yield...
- Q You are thinking of buying a used car for $4,000 for driving toschool. Your parents are willing to lend you the $4,000 and chargeonly 2.4% APR. They want the loan...
- Q The 2014 balance sheet of Jordan’s Golf Shop, Inc., showedlong-term debt of $6.4 million, and the 2015 balance sheet showedlong-term debt of $6.65 million. The 2015 income statement showedan interest...
- Q As you've read in your text, the overall percentage of U.S.citizens participating in a stock market either through individualholdings or through financial intermediaries such as mutual fundshas declined since the...
- Q New-Project AnalysisThe Campbell Company is considering adding a robotic paintsprayer to its production line. The sprayer's base price is$1,040,000, and it would cost another $21,000 to install it. Themachine falls...
- Q The Everly Equipment Company's flange-lipping machine waspurchased 5 years ago for $100,000. It had an expected life of 10years when it was bought and its remaining depreciation is $10,000per year...
- Q Why we cannot use different compounding periods when comparingalternatives in the present or future worth methods? Give anexample of how different compounding periods will affect theselection of an alternative.
- Q Tomkat Corp. has only a single asset. This assetgenerates operating cash flow of $200,000 per year, inperpetuity. Tomkat also has a single liability,which is a perpetual bond (the maturity date is infinitely...
- Q The president of the company you work for has asked you toevaluate the proposed acquisition of a new chromatograph for thefirm’s R&D department. The equipment's basic price is $180,000,and it...
- Q New-Project AnalysisThe president of the company you work for has asked you toevaluate the proposed acquisition of a new chromatograph for thefirm’s R&D department. The equipment's basic price is $120,000,and...
- Q Describe the importance of working capital management. What are thepros and cons of maintaining high working capital?
- Q As of March 23, 2017, the yield to maturity on one year U.S.Treasury Bills is just 0.96%. You mention to your broker yourfrustration at only earning such a low interest...
- Q Keller Cosmetics maintains an operating profit margin of 8% andasset turnover ratio of 3.a. What is its ROA? (Enter your answer as a whole percent.)ROA 24 % (was able to...
- Q Dinklage Corp. has 9 million shares of common stock outstanding.The current share price is $75, and the book value per share is $6.The company also has two bond issues outstanding....
- Q Nigeria faces the price elasticities of demand for itsimports and exports of -.4 and -.3, respectively. Analyze how itscurrent account will be influenced by a devaluation of the naira by10%....
- Q Kohler Corporation reports the following components ofstockholders’ equity on December 31, 2016: Common stock—$20 parvalue, 100,000 shares authorized, 40,000 shares issued andoutstanding $ 800,000 Paid-in capital in excess of par...
- Q Del Gato Clinic deposits all cash receipts on the day when theyare received and it makes all cash payments by check. At the closeof business on June 30, 2017, its...
- Q Warnerwoods Company uses a perpetual inventory system. Itentered into the following purchases and sales transactions forMarch. Date Activities Units Acquired at Cost Units Sold at RetailMar. 1 Beginning inventory 60...
- Q ???(Bond valuation) A bond that matures in 8years has a ?$1,000 par value. The annual coupon interest rate is 9percent and the? market's required yield to maturity on a?comparable-risk bond...
- Q The Regal CycleCompany manufactures three types of bicycles—a dirt bike, amountain bike, and a racing bike. Data on sales and expenses forthe past quarter follow:TotalDirtBikesMountain BikesRacingBikesSales$917,000$264,000$401,000$252,000Variablemanufacturing and selling expenses466,000110,000202,000154,000Contributionmargin451,000154,000199,00098,000Fixedexpenses:Advertising,traceable69,6008,40041,00020,200Depreciation ofspecial...
- Q An investor must choose between two bonds:Bond A pays $90 annual interest and has a market value of $820.It has 10 years to maturity.Bond B pays $95 annual interest and...
- Q Here is the condensed 2015 balance sheet for Skye ComputerCompany (in thousands of dollars):2015Current assets $2,000Net fixed assets 3,000Total assets $5,000Accounts payable and accruals $900Short-term debt 100Long-term debt 1,100Total debt...
- Q The Jackson-Timberlake Wardrobe Co. just paid a dividend of$1.30 per share on its stock. The dividends are expected to grow ata constant rate of 5 percent per year indefinitely.a. If...
- Q Laker Company reported the following January purchases and salesdata for its only product. Date Activities Units Acquired at CostUnits sold at Retail Jan. 1 Beginning inventory 240 units @ $...
- Q Take four different assets -- a beautiful Rembrandt pen and inksketch; a 45 foot sailboat; a succesful pizza parlor; and a uniquepiece of land situated on 400 feet of beachfront...
- Q Summit Record Company is negotiating with two banks for a$147,000 loan. Fidelity Bank requires a compensating balance of 30percent, discounts the loan, and wants to be paid back in fourquarterly...
- Q A machine costs $19650 and is expected to have a scrap value of$2387 whenever it is retired. Operating and Maintenance costs are$1398 for the first year and expected to increase...
- Q ssume that 3-monthTreasury bills totaling $13 billion were sold in $10,000denominations at a discount rate of 3.650%. In addition, theTreasury Department sold 6-month bills totaling $11 billion at adiscount rate...
- Q After reading this? chapter, it? isn't surprising that? you'rebecoming an investment wizard. With your newfound expertise youpurchase 100 shares of KSU Corporation for $43.53 per share. Overthe next 12 months...
- Q Suppose you purchase a 10-year AAA-rated British bond for parthat is paying an annual coupon of 9 percent and has a face valueof 1,000 British Pounds (£). The spot rate...
- Q Dickinson Brothers, Inc., is considering investing in a machineto produce computer keyboards. The price of the machine will be$1,700,000, and its economic life is five years. The machine willbe fully...
- Q Chamberlain Co. wants to issue new 14-year bonds for somemuch-needed expansion projects. The company currently has 7.8percent coupon bonds on the market that sell for $762.45, makesemiannual payments, and mature...
- Q Solve using excel2. You give a loan to your friend to buy equipment for hisbusiness. The friend puts $4000 of their own money as a downpayment, you lend them $12,000....
- Q You own a stock with an average return of 18.7 percent and astandard deviation of 19.6 percent. In any one given year, you havea 95 percent chance that you will...
- Q What should Johnson & Johnson do in China about the claimsof the Campaign for Safe Cosmetics?
- Q For the third discussion question of the quarter, we are goingto examine a few Exchange-Traded Funds (ETFs) and determine whichseems like the best investment for us. Information about ETFperformance, industry,...
- Q What is the percentage price change for a zero coupon bond ifits YTM changes from 3.9% to 4.6%? The bond's face value is $1,000and it matures in 8 years. Use...
- Q 2018 Fiscal Year for XYZ HospitalDepreciation: 448,350Insurance expense: 373,030Interest expense: 280,450Investment income: 270,900Repairs/maintenance: 222,740Patient Services revenue: 10,725,260Rent expense: 299,250Salaries and benefits: 6,735,610Supplies: 1,025,625Utilities: 227,500Based upon your income statement, answer the...
- Q Accounts receivable changes without bad debts Tara’s Textilescurrently has credit sales of $360 million per year and an averagecollection period of 60 days. Assume that the price of Tara’sproducts is...
- Q First calculate the delta of the following option. Then use thisdelta to ESTIMATE the newprice of a European call optionif the stock price increases by $4. Theoption has the following...
- Q Candy is a successful small business owner who has $250,000 toinvest in a new equipment which will enhance her operations. Helpher to calculate the rate of return for this investment...
- Q (1)You have just taken out a $20 000 car loan with a 4% APR,compounded monthly. The loan is for five years. When you make yourfirst payment in one month, how...
- Q 1.The systematic risk principle states that the expected return ona risky asset depends only on which one of the following?Company-specific riskDiversifiable risk.Systematic riskUnsystematic risk2).A company's stock has a beta of...
- Q Assume a majorinvestment service has just given Oasis Electronics its highestinvestment rating, along with a strong buy recommendation. As aresult, you decide to take a look for yourself and to...
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