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    Alternative Capital Structures: EBIT-EPS Analysis

    A start-up firm considering two alternative capital structures: one is conservative and the other aggressive. The conservative capital structure calls for a debt to asset D/A ratio = 0.25 while the aggressive calls for a D/A = 0.75. Once the firm selects its target capital structure, it envisions two possible scenarios for its o

    Expected Return on Portfolio

    What is the expected return on a portfolio comprised of $3,000 in stock K and $5,000 in stock L if the economy is normal? State of Probability of Returns if State Occurs Economy State of Economy Stock K Stock L Boom 20%

    What is the default risk premium on the corporate bond?

    The [real] risk-free rate is 3%. Inflation is expected to average 2% a year for the next three years and then 4% a year for the following three years. A six year corporate bond has a yield of 8%. What is the default risk premium on the corporate bond?

    Determining units to sell to limit potential loss

    The Wiltmore Co. would like to add a new product to complete their lineup. They want to know how many units they must sell to limit their potential loss to their initial investment. What is the quantity if their fixed costs are $12,000, the depreciation expense is $2,500, and the contribution margin is $1.30? (Round to whole uni

    Supplies used during the year

    Presented below is a balance sheet for the Don Lane Lawn Service at December 31, 2003. DON LANE LAWN SERVICE Balance Sheet December 31, 2003 Assets Liabilities and Stockholders' Equity Cash $12,000 Liabilities Accounts receivable 7,000 Accounts payable $ 8,000 Supplies 9,000 Notes payable 15,000 Equipment 11,00

    Price for Stock

    Buttercup's N More wants to offer some preferred stock that pays an annual dividend of $2.00 per share. The company has determined that stocks with familiar characteristics provide a 9 percent rate of return. What price should Buttercup's expect to receive per share for this stock offering?

    Ellis Company accumulates the following adjustment data at December 31.

    Ellis Company accumulates the following adjustment data at December 31. 1. Revenue of $800 collected in advance has been earned. 2. Salaries of $400 are unpaid. 3. Prepaid rent totaling $450 has expired. 4. Supplies of $350 have been used. 5. Revenue earned but unbilled totals $750. 6. Utility expenses of $300 are unpaid.

    XYZ Pharmacy: Effect of Errors

    XYZ Pharmacy reported cost of goods sold as follows: 2003 2004 Beginning inventory $ 54,000 $ 64,000 Cost of goods purchased 847,000 891,000 Cost of goods available for sale 901,000 955,000 Ending inventory 64,000 55,000 Cost of goods sold $837,000 $900,000 Perkins made two errors: (1) 20

    What needs to be included in gross income?

    A man received $7500 for being an executor of an estate. He also received a home worth 100,000 but was only purchased for 30,000. Finally, he receives the life insurance benefits of 100,000. He elected to receive payment in installments and for this year he collected 30,000 of it. With these three scenarios, how much would h

    Queuing analysis

    Using Excel, solve the following: The Peachtree Airport in Atlanta serves light aircraft. It has a single runway and one air traffic controller to land planes. It takes an airplane 12 minutes to land and clear the runway. Planes arrive at the airport at the rate of 4 per hour. A) Determine the average number of plan

    Queuing Analysis

    Using Excel, solve the following: The Dynaco Manufacturing Company produces a particular product in an assembly line operation. One of the machines on the line is a drill press that has single assembly line feeding onto it. A partially completed unit arrives at the press to be worked on every 7.5 minutes, on the average.

    Retiring Debt Early and Repurchases

    On January 1, 2004 Roland Inc. issued $124 million of 8% coupon bonds at par. The bonds pay interest semiannually on June 30 and December 31 of each year, and they mature in 15 years. On December 31, 2005 (one day before the next interest payment is made), the bonds are trading at a market yield of 12% plus accrued interest.

    Equity Method and Consolidation

    (See attached file for full problem description) I would like to use these responses to aid me in solving additional problems

    Calculate the bond discount at issuance- Luba Corporation

    On January 1, 2005, when the market interest rate was 14%, Luba Corporation issued bonds in the face amount of $500,000, with interest at 12% payable semiannually. The bonds mature on December 31, 2014. Required Calculate the bond discount at issuance. How much of the discount should be amortized by the effective interes

    Accounting: Edsel Inc.

    Edsel Inc., has the following information available for 2005 from the unadjusted trial balance at year end. Cash sales $400,000 Credit sales 600,000 Ending accounts receivable balance 180,000 Ending allowance for uncollectibles 1,500 Estimated uncollectibles 2% If Edsel uses the sales reven

    Full and Variable Costing

    2. MedCo, Inc. manufactures a specialized breathing instrument called the MCB1000. The firm has grown rapidly in recent years because of the product's low price and high quality. However, sales have declined this year due to increased competition and a decrease in the surgical procedures for which the MCB1000 is used. The firm i

    Should they make or buy bindings

    The Minnetonka Corporation, which produces and sells to wholesalers a highly successful line of water skis, has decided to diversify to stabilize sales throughout the year. The company is considering the production of cross-country skis. After considerable research, a cross-country ski line has been developed. Because of the c

    Blue, inc.

    Blue, inc. sells playground equipment to schools and municipalities. Invoices are mailed at the end of each month for all goods shipped during that month; credit terms are net 30 days. Sales and account receivable data for 2005, 2006, and 2007 were as follows. Year ending December 31 2005 2006 2007 sales $1,785,980 $1,83

    Extraordinary item problem

    Garber Corp.'s trial balance of income statement accounts for the year ended December 31, 2001 included the following: Debit Credit ???????? ???????? Sales

    Personal Tax calculations -TASK 1-3

    PLEASE FIND ATTACHED TASKS RELATING TO PERSONAL TAX COMPUTATIONS. COULD YOU PLEASE PROVIDE DETAILED SOLUTIONS. In total there are 6 tasks. I have posted the 6 questions in total. Could you please attempt tasks 1-3 to this posting. Tasks 3-6 POSTING FOLLOWS....

    Business Accounting: The Equity Method

    When an investor uses the equity method to account for investments in common stock, cash dividends received by the investor from the investee should be recorded as: a. A deduction from the investor's share of the investee's profits. b. Dividend income. c. A deduction from the stockholders' equity account, dividends to st

    Significant Influence

    1. Which of the following is not an indication that an investor company has the ability to significantly influence an investee? A. Material intercompany transactions. B. The company owns 30 percent of the company but another owner holds the remaining 70 percent. C. Interchange of personnel. D. Technological depend

    Healthcare related economics and accounting

    Hello BrainMass OTAs We need your expertise with these questions Our study group is working on these pre exam questions and are comparing results. Please carefully review and answer these multiple questions. We will provide a rating after checking responses. 11. Assume that you purchase a 6-year, 8 percent savings c

    International accounting questions

    1 - What role do tax credits play in international taxation? What considerations might cause tax credits to not achieve their intended results? 2. Sweden has a classical system of taxation. Calculate the total taxes that would be paid by a company headquartered in Stockholm that earns 750,000 swedish krona (SEK) and distribu

    Accounting errors and corrections

    ABC Corporation is a wholesale distributor of electronic components. Financial statements for the year ended December 31,2002, reported the following amounts and subtotals (in millions): 2001: Assets $740; Liabilities $330; Stockholders' Equity $410; Net Income $210; Expenses $150 2002: Assets $820; Liabilities $400; Stockhol

    Calculating Net Loss with a 40% Tax Rate

    Clean Corp. reported the following pretax accounting income and taxable income for its first three years of operations: 2002 $ 400,000 2003 (700,000) 2004 800,000 Clean's tax rate is 40% for all years. Assuming that Clean elected a loss carryback/carryforward, what would be the net loss in 2003 reported on its income state