Paul Stone can get 3/15, net 65 from his suppliers. Paul would like to delay paying the suppliers as long as possible because his cash account balance is very low, but his Dad, a famous financial expert, recommends that he borrow from his local bank at 10% and pay early to take advantage of the discount. Which of the following s
1. During the last year Bruce had Net Income of $150, paid $20 in dividends, and sold new stock for $40. Beginning equity for the year was $700. Ending Equity was? 2. The Beverly's had an operating income (EBIT) of $260,000 last year. The firm had $18,000 in depreciation expenses, $15,000 in interest expenses, and $60,000 i
Initial project cash flow related to net working capital, Initial Cash flow, Addition of a new product line
3 questions 1) All of the following are anticipated effects of a proposed project. Which of these should be included in the initial project cash flow related to net working capital? a) an inventory decrease of $5000 b) an increase in accounts receivable of $1500 C)an increase in fixed assets of $7600 d) a decrease in ac
Nabors, Inc. 2005 and 2006 Balance Sheets ($ in millions) 2005 2006 2005 2006 Cash $
1. The balance sheet of the Hico Company contained the following accounts and balances: Based on the above information only, the amount or balance for Land must be A. $500 B. $950 C. $450 D. $550 2. Which of the following could represent the effects of an asset source transaction on a company's financial statements?
Match the definitions on the left with the answers on the right. 1. ___ Aging of Accounts Receivable A. Evaluate liquidity by dividing current assets by current liabilities 2. ___ Balance Sheet B. A report of the sales, costs, and net income of the company for a period of time (usually annually) 3. ___ Cash Discount C. Abil
I have read through my textbook and searched the web. I feel like this is a trick question. Which one is a true statement and why? Why the others are false. Which of the following statements is correct? a. Screening is the process of finding the best among available acceptable alternatives. b. Ranking is the process of de
This question deals with review of the financial management policies and practices of Johnson and Johnson over the past two years. Also it calculates the important financial ratios.
Calculate the FINANCIAL & MARKET RATIOS for the year ended 31/12/07 & 31/12/06 Critically evaluate and comment on the results - Spotlight the areas the management should focus more - Calculate k (cost of equity) by applying both the Gordon's Growth Model and the CAPM. - Calculate the cost of each component of Capital for
Q1-3, What is a firm's fundamental, or intrinsic, value? What might cause a firm's intrinsic value to be different than its actual market value? Q2-2, What is an opportunity cost rate? How is this rate used in discounted cash flow analysis, and where is it shown on a time line? Is the opportunity rate a single numbe
1. Evaluate Machine A and Machine B. Assume: A. The life of each machine is 3 years B. The company thinks it knows how to make 14% on investments no more risky than this one. 2. Determine, via Present Value Method, which machine should be recommended. Explain your decision. What assumptions are you making about the machines? What assumptions are you making in your methodology? 3. Please explain in details how/what/why you did what you did in this exercise and list the solutions which you have came up with. In other words, provide a written summary of this exercise so that I understand exactly how you did it.
1. Evaluate Machine A and Machine B. Assume: A. The life of each machine is 3 years B. The company thinks it knows how to make 14% on investments no more risky than this one. 2. Determine, via Present Value Method, which machine should be recommended. Explain your decision. What assumptio
For a company which earns 10 Percent on its call account deposits,borrows longterm at 12 percent and its main investments are in the form of call account deposits,what will be the best DISCOUNT RATE to use in project evaluation NPV,as an alternative to using WACC? How can such a rate be justified?
Bison Mfg. is considering two options for purchasing comparable machinery. Machine 1 will cost $27,500 plus an annual maintenance fee of $1,500 per year for four years. Machine 2 will cost $25,000 with a varying maintenance charge. The estimated cost of maintenance is $1,000 in the first year, $3,000 in the second year, a
Problem 25-1 Valuation: Vandell's free cash flow (FCF) is million per year and is expected to grow at a constant rate of 5% a year, its beta is 1.4. What is the value of Vandell's operations? If Vandell has $10.82 millions in debt, What is the current value of Vandell's stock? (Hi nt Use the corporate valuation model o
Lloyd Enterprises has a project which has the following cash flows: Year Cash Flow 0 -$200,000 1 50,000 2 100,000 3 150,000 4 40,000 5 25,000 The cost of capital is 10 percent. What is the project's discounted payback?
Please see the attachment for this question on choosing from two projects.
1. In game theory analysis, what is a "dominant strategy"? 2. A firm's most recent annual dividend was $2 per share; its shares sell for $40 in the stock market, and the company expects its dividend to grow at a constant rate of 5% in the foreseeable future. Using the dividend growth (Gordon) model, what would you estima
Regis Clothiers can borrow from its bank at 11 percent to take a cash discount. The terms of the cash discount are 2/15, net 60. Should the firm borrow the funds?
1. Regis Clothiers can borrow from its bank at 11 percent to take a cash discount. The terms of the cash discount are 2/15, net 60. Should the firm borrow the funds? 2. A pawn shop will lend you $2000 for 45 days at a cost of $5 interest. What is your effective rate of interest? 3. Randall Corporation plans to borrow $200,
1. What impact does the number of years until maturity have on the value of a bond? 2.List three capital budgeting methods (decision rules) and rank them from least to most useful. Defend your ranking. 3. Should capital budgeting projects be evaluated on their pre-tax or after tax cash flows? Why? 4. What is a stockhold
This is a problem in managerial accounting. Can you give me some direction? Problem: Office King Corp. makes three different models of paper shredders including the waste container that serves as the base. While the shredder heads are different for three models, the waste container is the same. The number of waste containers
Trying to find the present value of the cash flows with a discount rate of 11% componded quarterly. Year Cash Flow 1 $ 900 2 850 3 0 4 1,140
XYZ, Inc. has an offer to buy ABC & Sons. XYZ thinks ABC can produce cash flows of $5k, $9k, & $15k over the next three years (respectively). After that, XYZ thinks ABC will be worthless. Using a 14% rate of return, XYZ must make it's purchase decision now. What should XYZ pay today to buy ABC? Please use Excel (prefera
Multiple Choice Questions in Investment: current yield, value of any asset, free cash flow approach to valuation, bank discount yield
Question 6: In looking at the current yield curve you see the following spot rates: one year 6.19%, two years 5.90%, and three years 5.71%. If you assume that the yield curve is best explained by the "pure expectations theory", what is the expected one-year rate two years from now? a. 5.9% b. 5.71% c. 5.04% d. 5.33%
Please help me complete and submit a 3,500-4,200-word Capital Structure Analysis Report. For this report, use Target. This report will consist of three sections: a. Working Capital Management Section 1) Identify which of the liquidity or efficiency ratios were under-performing relative to industry standard or were deterioratin
Question: Dozier Corporation is a fast-growing supplier of office products. Analysis project the following free cash flows (FCS) during the next 3 years after which FCF is expected to grow at a constant 7 percent rate. Dozier's cost of capital is WACC = 13% Time 1 2 3 Free Cash Flow -$20
The ________ is utilized to value preferred stock. a. Capital Asset Pricing Model (CAPM) b. Constant Growth Model c. Variable Growth Model d. Zero Growth Model e. Gordon Model The factors involved in setting a dividend policy include all of the following except: a. Operating Constraints b. Legal Constraints c. Con
A leading retailer finds itself in a financial bind. It doesn't have sufficient cash flow from operations to finance its growth, and it is close to violating the maximum debt-to-assets ratio allowed by its covenants. The Vice-President for Marketing suggests: "We can raise cash for our growth by selling the existing stores and l
Among the cash managment techniques used by most business are those that slow down their bill payments. A good example for this is "Cash Rebates" offered on household items like computers and other electronics 1) Are these practices sound business decisions? Are they ethical? Explain 2) What percentage of the rebaates offe
Kellogg Co. agreed to acquire Keebler Foods Co. for $3.86 billion, or $42 per share. How would discounted cash flow analysis be used in analyzing such a major acquisition decision? What were Kellogg's objectives in the acquisition? What kinds of qualitative issues could enter into the decision?
I need to create a forecast model for sales through operating income for Microsoft. The information needs to come from (http://www.sec.gov/)
Describe how the Weighted Average Cost of Capital (WACC) is calculated in amazon.com. Evaluate the effectiveness of this approach.