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# Finance

### Collegiate Tuxedo Opportunity Cost of Instant Electronic Checks

Collegiate Tuxedo rents apparel throughout the year. They have experienced non-payment by about 15% of their customers with an average loss of \$200. Collegiate wants to stem their losses by using an instant electronic credit check on the customer. These checks will cost them \$7 on each of the 1,000 customers. The opportunity cos

### Break-even Analysis Case

I need to design and develop a financial model that arrives at a correct answer/estimation for the specified problem, and supports future decision-making. In addition to solving the problem and creating the model, I need to prepare a spreadsheet/model map that documents use of the model for future users. The project will be gr

### As a new analyst, you have calculated the following annual rates of return for both Lauren Corporation and Kayleigh Industries. Your manager suggests that because these companies produce similar products, you should continue your analysis by computing their covariance. You decide to go an extra step by calculating the coefficient of correlation using the data provided in Problem 1. Prepare a table showing your calculations and explain how to interpret the results. Would the combination of Lauren and Kayleigh be good for diversification? Explain how to interpret the results. Would the combination of Lauren and Kayleigh be good for diversification?

Problem: # 1. As a new analyst, you have calculated the following annual rates of return for both Lauren Corporation and Kayleigh Industries. Year Lauren's Rate of Return Kayleigh's Rate of Return 1996 5 5 1997 12 15 1998 -11 5 1999 10 7 2000 12 -10 Your manager suggests that because these compan

### Comparing Holding-Period Returns

a. Compute the holding-period returns for Renee and Lester for periods 2 through 4. Period Renee Lester 1 \$9 \$27 2 11 28 3 10 32 4 13 29 b. How would you interpret the meaning of the holding-period return?

### Haywood Industries: Evaluate Investment A and B

*See values in attachment* Haywood Industries, has prepared the following information regarding two investments under consideration. Which investment should be accepted? Please provide supporting calculations for your choice. A. Investment A is better. It has a higher expected return with less risk. B. We cannot say whi

### Amortization and Income Statements

1. To buy a new house you take out a 25 year mortgage for \$300,000. What will your monthly interest rate payments be if the interest rate on your mortgage is 8 percent? rate (i) = number of periods (n)= present value (PV) =\$300,000 future value (FV) =\$0 type (0 = at end of period) =0 monthly mortgage payment= 2.

### Intangible Assets: Amortization for year 5 for a patent

A company purchases a patent for \$900K with an estimated life of 15 years. It is subsequently reduced to 10 years. During year 5, the product for which the patent is held is removed from market. Does the company book 90,000 in depreciation for year 5? If not, what amount do they book?

### Corporate Investing: A Case Study on Disney

Choose a stock from any company in any industry. Then visit Yahoo Finance at http://finance.yahoo.com/?u. Once there, enter the ticker symbol for your stock in the space provided so that you can be taken to pages where you will see a comprehensive set financial information- including the latest price- related to your company of

### Holding Period Returns and Standard Deviation

a) Use the price data from the table (data is in the attached document) for the Standard & Poor's 500 Index, Wal-Mart, and Target to calculate the holding-period returns for the 24 months from March 2004 through March 2006. b) Calculate the average monthly holding-period returns and the standard deviation of these returns f

### Decision under uncertainty

Suppose that the Beauty Company faces the choice of introducing a new beauty cream or investing the same amount of money in Treasury bills with a return of \$10,000.00. If the company introduces the beauty cream, there is an 80 percent probability that a competing firm will introduce a similar product and a 20 percent chance that

### Par Value Bond and Interest

Imagine you are thinking about the purchase of a \$1000 par value bond that pays interest of \$70 each six months and has ten years to go before it matures. If you buy this bond, you expect to hold it for 5 years and then sell it in the market. You currently require a nominal annual rate of 16%, but you expect the market to requir

### Valuation in a Private Equity Setting

In 2005 Dub Tarun founded a firm using \$200,000 of his own money, \$200,000 in senior (bank) debt, and an additional \$100,000 in subordinated debt borrowed from a family friend. The senior debt pays 10% interest, while the sub debt pays 12% interest and is convertible into 10% of the firm's equity ownership at the option of the i

### Corporate Investment Analysis - in FINANCE. Book from: Reilly, F. & brown, K. (2009). Investment Analysis and Portfolio Management (9th ed.). Mason, OH: South-Western/ Cengage Learning. Book used by Strayer University.

I need help to solve some problems from book Corporate Investment Analysis - in FINANCE. Book from: Reilly, F. & brown, K. (2009). Investment Analysis and Portfolio Management (9th ed.). Mason, OH: South-Western/ Cengage Learning. Book used by Strayer University. I need help to solve those problems: 4, 5, and 6 Please

### Corporate Investment Analysis - in FINANCE. Book from: Reilly, F. & brown, K. (2009). Investment Analysis and Portfolio Management (9th ed.). Mason, OH: South-Western/ Cengage Learning. Book used by Strayer University.

I need help to solve some problems from book Corporate Investment Analysis - in FINANCE. Book from: Reilly, F. & brown, K. (2009). Investment Analysis and Portfolio Management (9th ed.). Mason, OH: South-Western/ Cengage Learning. Book used by Strayer University. I need help to solve those 3 problems: 1, 2, and 3 Pleas

### Net Period of Delta Distributors

21. Delta Distributors has an investment in accounts receivable of \$2,750,000. Daily credit sales are \$118,280. If 30% of Delta's credit customers receive a discount by paying within 10 days and the remainder of Delta's customers pay in 40 days, what is the net period that Delta maintains? A. 19 days B. 31 days C. 37 days

### Portfolio weight

6. You own the following portfolio of stocks. What is the portfolio weight of stock C? Number Price Stock of Shares per Share A 100 \$22 B 600 \$17 C 400 \$46 D 200

### Comparing stock A to stock B

4. You are . Given the following information, which one of these two stocks should you prefer and why? Rate of Return if State of Probability of State Occurs Economy State of Economy Stock A Stock B Boom 60%

### Disney in 2007 and 2008; analyze and compare the ratios

See the attached file: Evaluate your selected organization's financial performance over the past two years using financial ratios. Calculate the following ratios for each year: a) Current b) Debt c) ROI (return on investment) d) Days receivable 2008 current ratio current assets 11,666,000 curent liabili 11,59

### VC Valuation and Deal Structuring

In 2005 Dub Tarun founded a firm using \$200,000 of his own money, \$200,000 in senior (bank) debt, and an additional \$100,000 in subordinated debt borrowed froma family friend. The senior debt pays 10% interest, while the sub-debt pays 12% interest and is convertible into 10% of the firm's equity ownership at the option of the in

### Long term financial planning

Why is long range financial planning critical to an organization's future? How do firms decide on objectives and targets? What are some methods for satisfying an organization's long-term capital needs? Do not want an analze, just need suggestions to these questions.

### Elements of Credit Policy

What are four elements of a new firm's credit policy? To what extent can firms set their own credit policies as opposed to having to accept policies that are dictated by "the competition"?

### What is the effect of transactions on various financial ratios?

I need to know the effect that each transaction will have on the financial ratio listed opposite it. Please use + for increase, - for decrease, and NE for no effect. Also, please give a short explanation for each answer. Assume that current assets exceed current liabilities in all cases, both before and after the transaction. He

### Wal-Mart: Financial Analysis and Management Teams

Go to the Yahoo Stock Screener and use this page to find Wal-Mart. Write a paper discussing what you find interesting about Wal-Mart and whether or not you think Wal-Mart will have a successful future. Get to the Wal-Mart web site, into the "investors relations" section and provide some financial highlights of Wal-Mart for t

### Risk Avoidance and Risk Retention

a. Discuss how risk avoidance might prove advantageous in your company or one with which you are familiar. b. How do the concepts of risk retention and risk transfer apply to your company or one with which you are familiar. c. Congratulations! You have just been promoted to the position of Supervisor of Risk Management fo

### The Economically Rational Value of a Stock

Assume IBM is expected to pay a total cash dividend of \$3.60 next year and dividends are expected to grow indefinitely by 3 percent a year. Assume the required rate of return (i.e. equity holder's opportunity cost of capital) is 9 percent. Assuming this is the best information available regarding the future of this firm, what

### Principles of Managerial Finance

Why is short-term financial management one of the most important and time-consuming activities of the financial manager? What is net working capital? Why is it important for a firm to minimize the length of its cash conversion cycle? What factors make managing inventory more difficult for exporters and multinational compan

### Carrying amount of this investment

Kimm, Inc. acquired 30% of Carne Corp.'s voting stock on January 1, 2007 for \$400,000. During 2007, Carne earned \$160,000 and paid dividends of \$100,000. Kimm's 30% interest in Carne gives Kimm the ability to exercise significant influence over Carne's operating and financial policies. During 2008, Carne earned \$200,000 and paid

### Finance: Assessing Investments

Growth Enterprises, Inc. (GEI) has \$40 million that it can invest in any or all of the four capital investment projects, which have cash flows as shown in Table A below. Type of Project Type of Cash Flow Year 0 Year 1 Year 2 Year 3 A Investment (10,000) Revenue 21,000 Operation Expen

### EBIT question

Hyperion, Inc., currently sells its latest high-speed color printer, the Hyper 500, for \$350. It plans to lower the price to \$300 next year. Its cost of goods sold for the Hyper 500 is \$200 per unit, and this year's sales are expected to be 20,000 units. a. Suppose that if Hyperion drops the price to \$300 immediately, it

### The original question asks how to record amortization for certain intangibles, and the method for determining ending balances (values) for the intangible asset accounts.

Rolanda Marshall Company, organized in 2006, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2007. 1/2/07 Purchased patent (8-year life) \$ 350,000 4/1/07 Purchased goodwill (indefinite life) 360,000 7/1/07 Purchased franchise with 10-ye