Please answer the following: 1. Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit. a. Compute the break-even point. b. Ms. Watts comes up with a new plan to cut fixed costs to $75,000. However, more labor will now be required, which will increase varia
1. The Rivoli Company has no debt outstanding, and its financial position is given by the following data: Assets (book= market) $3,000,000 EBIT $500,000 Cost of equity, rs 10%
Please discuss the economic and legal differences between holders of common stock, preferred stock and general creditors. Where do they each stand with regard to the payment of dividends and distributions in liquidation?
Airline Company Balance Sheet As of December 31, 2003 Assets Cash........................................................... $ 30,000 Account receivable....................................... 50,000 Inventory..................................................... 80,000 Net plant and equipment...........
L. What is the primary goal of financial management? a. Increased earnings b. Maximizing cash flow c. Maximizing shareholder wealth d. Minimizing risk of the firm 2. Gross profit is equal to A. sales minus cost of goods sold. b. Sales mi
Which is the best approach to common stock valuation and why?
1. The concept of compound interest refers to: A) earning interest on the original investment. B) payment of interest on previously earned interest. C) investing for a multi-year period of time. D) determining the APR of the investment.
(See attached file for full problem description) --- 22. On January 1, Beckman, Inc., purchases 60 percent of the outstanding stock of Calvin for $36,000. Calvin Co. has one recorded asset, a specialized production machine with a book value of $10,000.The fair market value of the machine is $50,000, and the remaining useful
Kim and Dan Bergholt are both government workers. They are considering purchasing a home in the Washington D.C. area for about $280,000. They estimate monthly expenses for utilities at $220, maintenance at $100, property taxes at $380, and home insurance payments at $50. Their only debt consists of car loans requiring a monthly
Scenario: The Hammons, Tim (35), Anna (32), children Mary (13) and Mark (11), consider themselves among the typical up and rising middle class. Overall, by today's standards, they have achieved a fair level of success: they are buying a home, have a modest savings account, and hold some investments. After serving 4 years i
Based on the strategic plan analysis posted earlier of Pfizer, Inc, please provide financial projections for at least the next 3-5 years. These financial projections must be based upon YOUR recommendations for the company NOT a rehash of the company's projections. You must select the financial ratios, projections, information,
Baker brothers have a DSO of 40 days. The company's average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. Data for Barry Computer Company and its industry averages follow. a) Calculate the indicated ratios for Barry. b) Construct the extended Du Pont equation
Financial Ratios Question What are some examples of Valuation Concepts?
Draw two break-even graphs-one for a conservative firm using labor-intensive production and another for a capital-intensive firm. Assuming these companies compete within the same industry and have identical sales, explain the impact of changes in sales volume on both firms' profits. Although no exa
Select a publicly held company. Look at the most recent Income Statement, Balance Sheet, and Statement of Cash Flows and decide if you will give this company a loan equal to 10% of their retained earnings. Justify your decision in 300 to 500 words. I picked Target and I would give them the loan but can you tell me how to
Explain how a given investor chooses an optimal portfolio. Will this choice always be a diversified portfolio, or could it be a single asset?
Earnings with a company increased by 20 percent, investors anticipated an increase of 25 percent. Will the company stock price increase or decrease when the announcement is made?
Expectations and Efficient Markets - Geothermal Corp. just announced good news: Its earnings have increased by 20 percent. Most investors had anticipated an increase of 25 percent. Will Geothermal's stock price increase or decrease when the announcement is made?
Cole Company entered into the transactions listed below during 2003. Prepare the appropriate journal entries for Cole Company. You may omit journal entry explanations but you should show computations. Jan. 10 Purchased 500 shares of Adams Company common stock for $35,000 as a short-term investment in stock securities. Apr.
I need help analyzing the use of databases in a large bank/collection call center. I need examples and descriptions of known database applications that are used (Microsoft Access, DB2, Oracle, etc.) or some that could be considered to help the organization run smoother. For the known applications, I need to propose improvement
Examine your public company of choice, Hewlett-Packard (HP), for investment . Then present a brief and powerful financial case for investment. Use all of your powers of persuasion, marketing, or advertising in your pitch.
Examine your public company of choice for investment from the previous exercise. Then present a brief and powerful financial case for investment in your company to the others in the class. Use all of your powers of persuasion, marketing, or advertising in your pitch.
Pigeon Express currently plows back 40 percent of its earnings and earns a return of 20 percent on this investment. The dividend yield on the stock is 4 percent. 1. Assuming that Pigeon can continue to plow back this proportion of earnings and earn a 20 percent return on the investment, how rapidly will earnings and dividends
You believe Dr. Washington is now ready to begin risk analysis and is ready to understand the risk differences among various investments. The most basic fact you want to convey to him is risk and return?the greater the risk, the greater the expected return. From there, you want to explain how expected returns can be calculated g
When Maria was considering buying the peanut butter cookie plant, one of her options was to convert it to make more lemon crème cookies, since near-term demand for the lemon crème cookies exceeded current capacity by 600,000 packs. What should Maria have done if the breakeven volume of lemon crème cookies in this new plant we
Case study #1: The NY Fashion Company: What is the financial/economic explanation for the difference between the unit profits found in parts (d) and (e).
Case Study#1 The NY Fashion Company From the tenth floor of her office building, Diana Ricks watches her swarms of New Yorkers watching stores along streets. On this hot July day, she pays particular attention to the fashions worn by the various women and wonders what they will choose to wear in the fall. Her thoughts are
Which of the following statements is most correct? a. In a private placement, securities are sold to private (individual) investors rather than to institutions. b. Private placements occur most frequently in stock issues, but bonds can also be sold by private placement. c. Private placements are convenient for issuer
(See attached files for full problem description) --- Xtreme Toys is a small manufacturing company in Southern California. Management is concerned because as their sales have grown, their cash flow has shrunk. Management doesn't understand how this could happen and has approached your team to find a solution for th
Discussing changes in the financial services sector. Put particular focus on major changes in banking laws, how the Internet is impacting the industry, industry consolidation, and international banking.
I specialize in solving business problems based on research and evaluation. I have just been hired by the new president of Playword Greeting Cards, an established company that sells greeting cards and collectibles to its own line of company-owned and franchise stores. The president wants my firm to research the causes of a downt
Please help with the following problem. The dividend per share in one year is $2. In year two it is $4 a share. Then the dividend will grow at 5% per year after that. The expected rate of return is 12%. a What is the current stock price? b. What is the expected price of the stock in one year? c. The expected r
Company A is equity financed with 10000 shares of equity outstanding selling for $100 a share. It is restructuring. Low debt plan is to issue debt of $200,000 with proceeds to buy the stock. The high debt lan would exchange $400,000 of debt for equity. The debt will pay an interest rate of 10%. Company A pays no taxes. a