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    Cash Discounts: Cost of Not Taking the Discount

    You place an order for 400 units of inventory at a unit price of $50. The supplier offers terms of 2/10, net 40. a. How long do you have to pay before the account is overdue? If you take the full period, how much should you remit? b. What is the discount being offered? How quickly must you pay to get the discount? If you

    Determining the type of float for a deposited check.

    You have $125,000.00 on deposit with no outstanding checks or uncleared deposits. If you deposit a check for $110,000.00 does this create a disbursement float or a collection float? What is your available balance? Book balance?

    Expected Return & Standard Deviation of return

    A portfolio is invested 40% in stock R, 35% in Stock S, and 25% in Stock T. State of Probability of Rate of Return if state occurs Economy State of Economy Stock R Stock S Stock T Boom 0.25 0.3 0.4 0.25 Good 0.4 0.1 0.15 0.1 Poor 0.25 0 -0.05 -0.1 Bust 0.1 -0.25 -0.15 -0.2 What is the expected return of the por

    Acme Corporation: EPS and Percent Change in economy expansion and recession

    Acme Corporation has no debt outstanding and a total market value of $12,000,000. Earnings before interest and taxes (EBIT) are projected to be $1,100,000 if economic conditions are normal. If there is a strong expansion in the economy then EBIT will be 25 percent higher. If there is a recession, then EBIT will be 75 percent

    Learning how to Complete a US Tax Return

    You are required to complete a comprehensive tax return. You are required to fill out the forms 1040 4562 4684 2106 and schedules A B C D E. You are required to show a small loss on schedule C and you are required to show a loss between 5000 and 7000 on schedule E. The property is classified as 100% rental. On schedule E a de

    Determining which business organization would best suit each situation.

    Which form of business organization might best suit the following? a. A consulting firm with several senior consultants and support staff. b. A house painting company owned and operated by a college student who hires some friends for occasional help. c. A paper goods company with sales of $100 million and 2000 employees

    Break-Even EBIT

    Duval Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Duval would have 400,000 shares of stock outstanding. Under Plan II, there would be 200,000 shares of stock outstanding and $5 million in debt outstanding. The interest rate on the debt is 1

    Roulette Enterprises: highest price an investor would pay

    Roulette Enterprises expects to pay a perpetual annual dividend of 65c. The beta of their stock has been calculated ex-post to be 0.8. If the market-risk premium and risk free rate were 8% p.a. and 7% p.a. respectively, what is the highest price an investor would pay for their shares?

    Lancelot Fund: Expected Market Return and standard deviation

    Lancelot Fund Management has found the Holy Grail; a mean-variant efficient portfolio of stocks with an expected return of 25% p.a., a beta of 1.5 and a standard deviation of expected returns of 20% p.a. If the risk free rate is 7% p.a., deduce the expected market return and standard deviation.

    Maximizing profit on the sale of widgets

    You can sell widgets for $50/Y, where Y is the number of widgets you sell. In other words, the more widgets you sell, the lower the price. It costs $1.5Y to make Y widgets. Using Excel, how many widgets do you make to maximize your profits?

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