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    Difference between Cost of Capital and WACC

    Part A: What is the difference between "Cost of Capital" and "Weighted Average Cost of Capital (WACC)"? Why is this difference important? Why do firms calculate WACC? Why is this number important? Part B: Describe the following terms and their relative importance to stock issues: IPO, underwriter, spread, prospectus, un

    Price and terms of swap

    A U.S. Company has a foreign subsidiary in London. Concerned about translation risk for the upcoming fiscal year (beginning in 60 days), the treasurer of the U.S. company is contemplating entering into a currency swaption expiring in 60 days with an exercise rate of 5.24%(pounds)/3.84%(dollars). The underlying swap is a convent

    Explain an Inequality with Negative Numbers

    Is it possible to relate negative numbers to practical life? Example: We may think of things which may be categorized as negative - such as debt, going below sea level (maybe in a Submarine), below freezing temperature, driving a car in a reverse gear, giving away things (oh well! on this one, one could argue that giving

    Continuous Probability Distributions - Probability Concepts

    1. How may a company use probability to determine whether or not it is feasible to use primary data in a research study? Explain your answer. 2. Should a company make a decision based solely on probability instead of doing a research study? Justify your answer. 3. Does the number of students in this class affect your ch

    Exchange Rate Risk Hedging Tools

    One of the risks of conducting international business is the exchange rate risk caused by varying exchange rates between two currencies (see attachment). What is one method/ tool or exchange rate risk hedging tools to aid in reducing this risk?

    Stock Split Effects

    For a company, what is the impact (net change) on Total Shareholders' Equity when a company announces a 2 for 1 stock split on 200,000 shares that have a $2 par value?

    Sampling

    Describe the process of selecting and evaluating a sample. Why is sampling important to business? Are there situations in business where sampling would not be effective?

    Business Analysis

    BUSINESS ANALYSIS An urn contains 4 green and 6 blue chips. If the drawing of 2 chips in succession is done with replacement determine the probability of: A. drawing 2 green chips B. Drawing a blue chip on the first draw and a green chip on the second draw. C. Drawing a blue chip on the first draw and a blue chip

    Probability and Using Whats Best

    Finely Company is a manufacturer of picture frames. The biggest sellers they have are the Concave and the Round. The Concave sells for $50 and requires 80 ounces of material and 30 minutes of labor. The Round sells for $75 and requires 90 ounces of material 45 minutes of labor. The company pays $0.50 an ounce for material and $0

    Decision Analysis: probability of predictions-value of information

    Jeffrey Mogul is a Hollywood film producer and he is currently evaluating a script by new screenwriter and director, Betty Jo Thurston. Jeffrey knows that the probability of a film by a new director being a success is about .10 and the probability it will flop is .90. The studio accounting department estimates that if this fil

    Accounting : Gross Profit

    A. Hillary Swank Clothiers had sales of $360,000 and cost of goods sold of $244,800. What is the gross profit margin (ratio of gross profit to sales)? b. If the average firm in the clothing industry had a gross profit of 35 percent how is the firm doing?

    Operations Problem

    See attached file for full problem description. 4. Mad Hatter's You are hired as a consultant to a growing national fast food chain, which serves a mix of basic sandwiches, salads and gourmet pizzas, and has both eat-in and take-out customers. You are visiting the Durham restaurant and given the below information about

    Importance of Manufacturing Overhead Allocation

    The percentages of product costs comprised by direct materials, direct labor, and manufacturing overhead for three companies are as follows: Company A Company B Company C Direct materials 7% 21% 42% Direct labor 13 42 49 Manufacturing 80 37 9 overhead 100% 100% 100

    Unifying Concepts : High-Low Method, Scatterplot, and Least Squares Methods

    You have been hired as a consultant for Jones Inc. The company manufactures high-density compact disks and sells them to a wide variety of business clients. Management is eager to learn more about the company's cost behavior. You have been provided the following data. Assume all production falls within the relevant range. S

    Break-Even Point Manufacturers

    A manufacturer produces items at a daily cost of $1.25 per item and sells them for $2 per item. The daily operational overhead is $450. What is the breakeven point? keywords: break even point, breaking even

    Cost Management and Coping with a Reduced Budget - Uptown Clinic

    Dr. Stephanie White, the Chief Administrator of Uptown Clinic, a community mental health agency, is concerned about the dilemma of coping with reduced budgets next year and into the foreseeable future, but increasing demand for services. In order to plan for reduced budgets, she must first identify where costs can be cut or redu

    Rate of Return: Example

    Suppose that in August 1997 you purchased shares in Staples, Inc. (NASDAQ: SPLS). It is now five years later and you decide to evaluate your holdings to see if you have done well with this investment. The table below shows the market prices of SPLS: Year 1997 1998 1999 2000 2001 2002 Price $12.3125

    Calculations of the Predetermined Overhead Rate

    Showers Company estimates the following overhead costs for the coming year: Equipment depreciation $150,000 Equipment maintenance 50,000 Supervisory salaries 20,000 Factory rent 200,000 Total $420,000 Showers is also budgeting $600,000 in direct labor costs and 14,000 machine hours for the coming year. a. Calculate the

    Accounting

    Network Company requires four units of R2 for every unit of D2 that it produces. Currently, R2 is made by Network, with the following per unit costs in a period when 20,000 units were produced: Direct materials $ 6.00 Direct labor 2.50 Manufacturing overhead 5.60 Total $14.10 Variable manufacturing ov

    Accounting

    Griffith Company started its production operations on July 1. During July, the silk-screening department completed 15,600 units. There were 2,400 units in ending inventory which were 75% complete with respect to materials and 20% complete with respect to conversion costs. During July, the department accumulated materials cost

    classified balance sheet

    From the following data, prepare a classified balance sheet for Simon Company at December 31, 2006. Spreadsheet Accounts payable $ 62,500 Accounts receivable 123,000 Buildings 418,500 Owners' equity, 1/1/06 210,000 Cash 179,750 Distributions to owners during 2006 21,750 Supplies 3,75

    Expanded Accounting Equation

    For the following four cases, use the expanded accounting equation to compute the missing quantity. Assets Liabilities Capital Stock Retained Earnings Case A $20,000 $ 8,000 A $ 3,500 Case B 16,000

    Risk Premiums on Common Stocks

    Here are stock market and Treasury bill returns between 1997 and 2001: Year Stock Market Return T-Bill Return 1997 31.29 5.26 1998 23.43 4.86 1999 23.56 4.68 2000 -10.89 5.89 2001 -10.97 3.83 a. What was the risk premium on common stock in each year? b. What was the average risk premium? c

    States of Nature Probability

    John is considering buying a new pick up truck for his house-cleaning service for middle class customers. The middle class clients seem to be growing even though the economy seems to be not that hot. He is wondering whether he should opt for a sub-compact, or compact or full size pick up. The smaller truck would have better fuel

    Accounting

    Monique is planning to increase the size of the manufacturing business that she operates as a sole proprietorship. She has a number of older assets that she will replace as part of the expansion. In addition, to finance this expansion she will have to sell some of her personal assets. Because it is close to the end of the tax ye

    Cinergy Corporation

    Cinergy Corporation manufactures and distributes electricity for customers located in Indiana, Kentucky, and Ohio. The company spends $725 to $750 million each year for the fuel needed to operate its coal-fired and gas-fired power plants; 92% to 95% of the fuel used is coal. Cinergy uses 10 coal-burning generating plants: five l