What is the net investment for an extruder that costs $42,000, if shipping costs are $1,500 and installation is $4,800? Assume this efficient machine is replacing an older extruder with a book and market value of zero. The replacement investment will reduce operating costs by $6,600 a year. The following choice are: a. $48,
ABC Hospital laundry department cleans laboratory jackets for the housekeeping and laboratory departments. The budgeted volume of jackets was 100 for housekeeping and 200 for laboratory. Housekeeping actually used 100, but laboratory used only 150. Fixed costs for the laundry were budgeted at $150. Variable costs were budgete
Needs to be done on excel spreadsheet. Please be as explicit as possible. Thanks 1. Supernormal Growth. Finley Co. is growing quickly. Dividends are expected to grow at 25 percent rate for the next three years, with a growth rate falling off to a constant 6 percent thereafter. If the required rate of return is 14 percent and
Compute the portfolio's expected return and standard deviation. Would you recommend a replacement for stock B and which of the possible replacements would you choose?
VIEW FILE FOR A CLEARER PICTURE 2. Please consider the following stocks: Price per Expected Standard Stock Share Return Deviation Correlation A $25 0.06 0.20 With B = 0.20 B $50 0.08 0.10 With C = 0.45 C $25 0.15 0.15 With A = 0.60 An investor has a $
1. Consider the following information 1998 1999 2000 2001 2002* Year end Stock Price 15.15 17.10 21.00 20.05 11.05 Year end Dividend 0.15 0.15 0.18 0.18 0.10 * In 2002, there was a 2 for 1 stock split a. Compute the returns for each of the final four years, the holding period return, and the
4. You can invest in a portfolio that has an expected return of 8% and a standard deviation of 0.10. You can also borrow and lend any amount at the risk free rate of 3%.
4. You can invest in a portfolio that has an expected return of 8% and a standard deviation of 0.10. You can also borrow and lend any amount at the risk free rate of 3%. a. Create a portfolio that will have a standard deviation of 0.15 and compute this portfolio's expected return. b. If the portfolio is the market portfolio,
3. Consider two securities with expected return of 16% and 20% and standard deviation of 25% and 40%, respectively. a. If the returns of the two assets are perfectly correlated, create a portfolio with an expected return of 24%. Find the standard deviation of that portfolio. b. Create a portfolio with a standard deviation o
Clarion contractors completed the following transactions and events Jan 1 paid 255440 cash plus 15200 in sales tax and 2500 in transportation fees for a new loader. Loader has a four year life and a 34740 salvage value. Loader costs are recorded in the equipment account. Jan 3 Paid 3660 to enclose the cab and install air
In January of 2005 Keona Co pays 2800000 for a tract of land with two buildings on it. it plans to demolish building one and build a new store. Building two will be a company office it is appraised at 641300 with a usefull life of 20 years and an 80000 salvage value. Without the buildings and improvements the tract of land is
Axel Telecommunications has a target capital structure that consists of 70 percent debt and 30 percent equity.
Axel Telecommunications has a target capital structure that consists of 70 percent debt and 30 percent equity. The company anticipates that its capital budget for the upcoming year will be $3,000,000. If Axel reports net income of $2,000,000 and it follows a residual distribution model with all distributions as dividends, what w
A firm has the following balance sheet: Cash $20 Accounts receivable $20 Inventory $20 Common stock $80 Accounts payable $20 Notes payable $40 Long-term debt $80 Fixed assets $180 Total assets $240 Retained earnings $20 Total liabilities and equity $240 Sales fo
Napa Auto Parts' last dividend (t=0) was $1.00 and the company expects to experience no growth for the next 3 years (from t=0 - t=3). However, Napa will grow at an annual rate of 10% between the third and fourth year and between the fourth and fifth years. Starting from the end of the fifth year, Napa will grow at a 5% rate, t
CASE STUDY - PART 3 JKD Memorial Hospital The first quarter is now complete and your boss has asked you to perform a variance analysis of the Nursing Department at JKD Memorial. As you may recall, the quarterly departmental budget for nursing was as follows:... In addition, it was assumed that there would be a total of
A stock's return has the following distributions: Demand for the Probability of Rate of Return Company's This Demand If This Products Occuring Demand Occurs Weak 0.1 (50%) Below Average 0.2 (5) Average
Short Answer 1. What is the difference between stock price maximization and profit maximization? Under what conditions might profit maximization not lead to stock price maximization? 2. Assume that you are serving on the board of directors of a medium-sized corporation and that you are responsible for establishing the com
A large consulting firm orders photocopying paper by the carton. The firm pays $30 delivery charge on each order. The total cost of storing the paper, including forgone interest, storage space, and deterioration, comes to about $1.50 per carton per month. The firm uses 1,000 cartons of paper per month. See attached for fur
A husband and wife contribute $4,000 per year to an IRA paying 10%, compounded annually, for twenty years. What is the value of their IRA? How much can they withdraw each year for 25 years at 10% compounded annually?
Profitability Measures; Liquidity Measures; Activity Measures; Financial Leverage Measures; Physical Measures
Required: a. Compute the following profitability measures for the year ended December 29, 2001: 1. Return on investment, based on net income (perform a DuPont analysis). 2. Return on equity, based on net income. 3. Price/earnings ratio. Use $32.24 as the year-end market price. 4. Dividend yield. 5. Dividend payout rat
4. CPA Exam - Shaid Corporation issued $2,000,000 of 6%, 10-year convertible bonds on June 1, 1993 at 98 plus accrued interest. The bonds were dated April 1, 1993, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 1994, $500,000 of these bonds were conve
21/1. What risks does a foreign affiliate of a multinational firm face in today's business world?
What is the difference between horizontal integration and vertical integration? How does antitrust policy affect the nature of mergers?
17/8. Preferred stock is often referred to as a hybrid security. What is meant by this term as applied to preferred stock?
I have an accounting assignment in which I have to use an Excel spreadsheet template. My problem is that in the spreadsheet I have been asked to LINK between the journals to the ledgers, to the Trial Balance, to the reports. What does this mean and how do you do it? I have attached the spreadsheet template I have to use for
According to the December 22, 2003 issue of Forbes, following are the 10 questions every investor should ask before buying a stock: 1. How does the company make money? 2. Are sales real? 3. How is the company doing relative to its competitors? 4. How does the broader economy affect things? 5. What could really hurt
How can an individual improve their FICO score?
You read in the Wall Street Journal that 30-day T-bills are currently yielding 5.55. your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: Inflation premium=3.25% Liquidity premium=0.6% Maturity risk premium=1.8% Default risk premium=2.15% On
Following is a good comparison of stocks and bonds. Bond Common Stock Bondholders are creditors Stockholders are owners No voting rights exist Voting rights exist There is a maturity date There is no maturity date Bondholders have prior claims on profits and assets in bankruptcy Stockholders have re
Why would the central measure of corporate leverage be distorted by the inclusion of hi-tech firms in the sector-wide average?
Whether you have developed your own investment portfolio or are participating in a mutual fund, you will naturally be quite interested in the value of the individual securities or the fund itself. Many people monitor the market (and their specific securities) at least daily - some several times each day. Others only review
How much would you have to invest today to receive: a. $12,000 in 6 years at 12 percent? b. $15,000 in 15 years at 8 percent? c. $5,000 each year for 10 years at 8 percent? d. $40,000 each year for 40 years at 5 percent?