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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

Achieved Percentage Return

What percentage return is achieved by an investor who purchases a stock for $30, receives a $1.50 dividend, and sells the share one year later for $28.50?

Minimum cash flow and opportunity cost if capital

What is the minimum cash flow that could be received at the end of year three to make the following project "acceptable?" Initial cost = $100,000; cash flows at end of years one and two = $35,000; opportunity cost of capital = 10%.


Two years ago bonds were issued with 10 years until maturity, selling at par, and a 7% coupon. If interest rates for that grade of bond are currently 8.25%, what will be the market price of these bonds?

Nominal Annual Cost

Durkin Cement buys on terms of 2/15, net 30 days. It does not take discounts and it typically pays 68 days after the invoice date. Net purchases amount to $720,000 per year. What is the nominal annual cost of its non-free trade credit assuming a 365 day year.

General Aviation, Inc Finances

Complete the balance sheet for General Aviation, Inc. based on the following financial data. Balance Sheet General Aviation, Inc. December 31, 2005 Assets Cash $ 8,005 Marketable securities ? Accounts receivable ? Inventories ?  Total current assets ? Gross fixed assets ? Less: Accumulated depreciation $50,000


Salte Corporation is issuing new common stock at a market price of $27. Dividends last year were $1.45 and are expected to grow at an annual rate of 6 percent forever. Flotation costs will be 6 percent of market price. What is Salte's cost of equity? kncs D^1/Np0= + g kncs = 1.45(1+0.06)/27(1-0.06)+ 0.06 = .1206 =

Average Investment in Inventory

Assuming a 360-day year, calculate what the average investment in inventory would be for a firm, given the following information in each case: a. The firm has a cost of goods sold figure of $480,000 and an average age of inventory of 40 days. b. The firm has a cost of goods sold figure of $1,150,000 and an inventory turnove

Price paid for a stock

A common stock is held for two years, during which time it receives an annual dividend of $10. The stock was sold for $100 and generated an average annual return of 16%. What price was paid for the stock?

Expected Return for Market Portfolio

What return should be expected from investing in the market portfolio which is expected to yield 18% if the investment includes all of the investor's funds plus 100% of additional funds borrowed at the risk-free rate of 6%?

Contribution Margin

PH Toy Company is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $30 and PH Toy would sell it for $65. The cost to assemble the product is estimated at $21 per unit and the company believes the market would support a price of $85 on the assembled unit. What decision

Investment portfolio.

I have to answer the questions below in 250 words. I have been reading the chapter and don't fully understand this questions Discuss how you plan to construct an investment portfolio. What steps do you plan to undertake to construct your portfolio? How do you plan to weight the portfolio? How do you plan to account for ris

Reasons for Doing Market Research

What are the primary reasons for doing market research? How are primary and secondary data used in subsequent marketing including the use of questionnaires, observations, experiments, and panels? How can and why can data mining be used in an effective marketing effort?

General Motors Filing for Bankruptcy

General Motors may file for bankruptcy during this class. Find the GM 2008 Annual report and review the total revenue, net income and profits for 2008 compared to previous year. Did GM make a profit from automobile manufacturing? How much cash is available for operations and how much will $14B do to keep the company afloat? What

Landon Corporation Stock Shares

Sample problem having trouble with. can someone help me. Need them done in excel. 1) Landon Corporation has issued 2,000 shares of common stock and 400 shares of preferred stock for a lump sum of $72,000 cash. Instructions (a) Give the entry for the issuance assuming the par value of the common was $5 and the market value

Calculate the unemployment rate for 2007. Compute the CPI.

The Bureau of Labor Statistics reported that in May 2007 the total labor force was 152,762,000 of a possible 231,480,000 working-age adults. The total number of unemployed was 6,819,000. From this information, what would be the Unemployment rate? The price level of a basket of goods in 2006 was $64. The price level of that sa

Investment Decision-Making

Bernie and Pam Britten are a young married couple beginning careers and establishing a household. They will each make about $50,000 next year and will have accumulated about $40,000 to invest. They now rent an apartment but are considering purchasing a condominium for $100,000. If they do, a down payment of $10,000 will be requi

Credit Cards and Consumer Credit

In reviewing November's statement, she notices that her beginning balance was $600 and that she made a $200 payment on November 10. She also charged purchases of $80 on November 5, $100 on November 15, and $50 on November 30. She can't tell how much interest she paid in November because she spilled watercolor paint on that porti

Finance Charge: Interest Rate and Balance

Phil had an unpaid balance of $1,854.50 on his credit card statement at the beginning of December. He made a payment of $45.00 during the month. If the interest rate on Phil's credit card was 2.5% per month on the unpaid balance, find the finance charge and the new balance on January 1.


P5-2 Return calculations For each of the investments shown in the following table, calculate the rate of return earned over the unspecified time period. Investment cash flow beginning of end of during period period value period value A -$ 100 $ 800 $1,100

Douglas Keel, a financial analyst for Orange Industries

Douglas Keel, a financial analyst for Orange Industries, wishes to estimate the rate of return for two similar-risk investments, X and Y. Douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. A year earlier, investment X had a market value of $20,000; investment Y had

Treasury Stock

Mosby Company's balance sheet shows: Common stock, $20 par $3,000,000 Paid-in capital in excess of par 1,050,000 Retained earnings 750,000 Record the following transactions by the cost method. a. Bought 5,000 shares of its commo

Investment Timing: Purchasing an Optical Scanner

You can purchase an optical scanner today for $400. The scanner provides benefits worth $60 a year. The expected life of the scanner is 10 years. Scanners are expected to decrease in price by 20 percent per year. Suppose the discount rate is 10 percent. Should you purchase the scanner today or wait to purchase? When is the best

A Series of Forecasting Problems

An analyst presents you with a following pro forma (in millions of dollars) that gives her forecast of earnings and dividends for 2007 -2011. She asks you to value the $ 1,380 millions shares outstanding at the end of 2006, when common shareholder's equity stood at $4,310 million. Use a required rate of return of 10 percent in

Added Benefit Costs of Action

As an oil refiner, you are able to produce $76 worth of unleaded gasoline from one barrel (Bbl) of Alaska North Slope (ANS) crude oil. Because of its lower sulfur content, you can produce $77 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude. Alaska North Slope crude oil is currently selling for $