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Economic Value Added to TKK

TKK has $1 billion of capital invested in several projects that are expected to generate a pretax operating profit of $170 million next year. TKK has an estimated tax cost of capital of 15% 1: What is the pretax economic value added expected to generate next year? Calculate economic value added based on pretax operating profi

Performance Factors

Scenario 1: If you were general manager of a division, on which three key ratios would you choose to have your unit's financial performance evaluated? Please explain your choices, and the yardsticks that you would use to measure your company's performance. Scenario 2: In looking at an analysis of financial statements that yo

American Superconductor Decision for Debt Financing vs Equity Financing

Read the article below, available in Proquest: American Superconductor switch; Westboro company plans to raise money through a stock offering Andi Esposito. Telegram & Gazette. Worcester, Mass.: Aug 26, 2003. pg. E.1 Abstract (Article Summary) 'AMSC's management and board of directors believe the decision to forgo a s

Financial Statement Analysis: Horizontal Analysis

Financial information is presented below: December 31, 2009 December 31,2008 Current Assets $125,000 $100,000 Plant Assets (net) $396,000 $330,000 Current liabilities $91,000 $70,000 Long term lia

Calculating buyout prices

Gamma Corporation is considering a two-step buout of Delta Corporation. Delta Corporation has 2,000,000 shares outstanding and its stock price is currently $40 per share. In a two-step buyout, Gamma Corporation will offer to buy 51% of Delta Corporation's shares outstanding for $68 per share in cash, and the balance in a second

Calculating Amortization Expense

Kerr Company purchased a patent on January 1, 2006 for $180,000. The patent had a remaining useful life of 10 years at that date. In January of 2007, Kerr successfully defends the patent at a cost of $81,000, extending the patent's life to 12/31/18. What amount of amortization expense would Kerr record in 2007?

Effective Interest Amortization in a Company

A company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2007. Interest is paid on June 30 and December 31. The proceeds from the bonds are $19,604,145. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2007 balance sheet be?

Expense Report Claims

1-Retrieve the Expense Report and save it on your computer as Expense Report 1. This partially completed workbook contains the column headings and several expense items. 2-Enter a SUM function in cells C12:N12 which totals the figures in rows 8 through 11. The formula for doing that is "=SUM(C8:C11)" and enter that in C12

Regular cash dividend, periodic share repurchase...

Compare a regular cash dividend with a periodic share repurchase. Which has greater appeal to you? Explain. Explain a stock dividend and further explain if you would prefer it to a cash dividend. What are stock splits and how desirable are they?

Predictions for Opportunites or Issues That Disney May Face

Explain any issues or opportunities that Disney would face based on Disney ratios over the past five years. Please be clear and concise and have the main points up front. Always back up arguments with data/evidence and source information when possible.

Finance Review Questions

Attached you will find two finance questions that I need step by step guidance for with formulas included. Please show all of the work so that I may understand the material fully. 1. You have invested in a project that has the following payoff schedule: Payoff Probability of Occurrence $40 .15 $50 .20 $60 .30 $70 .30

Finance Problems: Credit, Zero-Balance Account, and Annual Rate

1. Relaxation of credit standards Lewis Enterprises is considering relaxing its credit standards to increase its currently sagging sales. As a result of the proposed relaxation, sales are expected to increase by 10% from 10,000 to 11,000 units during the coming year; the average collection period is expected to increase from 45

Balance Sheet for JCP

****Please answer this question: **Take the company's most recent financial statements and project a 10% increase in sales. Determine whether, and how much, external financing would be needed to support the projected increase in sales Please use for current stock information for JCP which is the company to

Domestic Financial Management, Arbitrage, Risk, and Contracts

1. What new problems and factors are encountered in international as opposed to domestic financial management? 2. What does the term arbitrage profits mean? 3. What can a firm do to reduce exchange risk? 4. What are the differences between a forward contract, a futures contract, and options?

Hedging and Expected Tax Saving

Suppose that Ashanti Gold Co. expects to produce a total of 1 million ounces of gold by the end of this year. Total manufacturing and operating cost will be $250 million and interest expenses will be $20 million. Ashanti forecasts the future gold price will be equally $250, $300, or $350. The firm's tax rate is 20 % when taxable

Cash Flow and Net Present Value

1.What are the free cash flows in years 2 and 10 that should be used to evaluate the proposed project? Ans. ______________ Free cash flow for the following years: Year 2 = Year 10 = 2. If the cost of capital for this project is 14%, what is your estimate of the value of the new project? Ans. ___________

Calculating Payback Period and NPV: Example Problem

You are considering making a movie. The movie is expected to cost $10 million upfront and take a year to make. After that, it is expected to make $5 million in the year it is released and $2 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you

Change in Stock Price

Company Z stock is trading at $30 per share (its equilibrium price) given that the risk free interest rate is 9% and the equilibrium risk premium on the market portfolio is 8%. The company's long run growth is expected to remain 5% per year forever. Last year's EPS were $3 and the dividend payout ratio is 50%. If beta increases

Unit price and EBIT.

The Clearwater Aquarium Company will produce 66,000 10-gallon aquariums next year. Variable costs are 40% of sales while fixed costs total $133,200. At what price must each aquarium be sold for Clearwater to obtain an EBIT of $114,000?

Automotive Bailout and Managerial Finance

Review the current status of the automotive bailout plans involving GM, Chrysler, and the federal government. Prepare a 300 words on your selected organization in which you address the following: a. background/description of what the proposed government bailout plan requires from the car companies, unions, creditors, supplie

Financial Ratios

You are an upper-level manager in a company. Which financial ratios would you consider most useful? Would these ratios be different than the ones you would consider useful as an investor? Why or Why not? ***For an investor I chose the following ratio's: profitability, asset utilization, liquidity and debt utilization ratio's.

Assessing the goal of Sports Products, Inc. and Managerial Finance

Text Case Study Read the case study from the e-text, Principles of Managerial Finance, (11th ed. )by Gitman, Assessing the Goal of Sports Products, Inc. located at the end of Chapter One. Prepare a 700 words in which you respond to the questions at the end of the case. See attachment. APA format/at least 2 references

Efficient Market Theory and Insider Trading

Please explain the meaning of efficient markets. Why might we expect markets to be efficient most of the time? In recent years, several securities firms have been guilty of using inside information when purchasing securities, thereby achieving returns well above the norm (even when accounting for risk) does this suggest that the

Dividend Growth Rate: Example Problem

What is the expected constant growth rate of dividends for a stock currently priced at $50, that just paid a dividend of $4, and has a required return of 18%? A) 3.41% B) 5.50% C) 9.26% D) 12.5%

Credit Standing and Target Ranges

Bixton Company's new chief financial officer is evaluating Bixton's capital structure. She is concerned that the firm might be underleveraged, even though the firm has larger-than-average research and development and foreign tax credits when compared to other firms in its industry. Her staff prepared the industry comparison show