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# Finance

### E & J Gallo is the largest vintner in the United States.

E & J Gallo is the largest vintner in the United States. It gets its grapes in California (some of which it grows itself) and sells its wines throughout the United States. Does Gallo face currency risk? Why and how?

### International Finance: Effects of a Soaring Dollar

18. Black & Decker Manufacturing Co. of Towson, Maryland, has roughly 45% of its assets and 40% of its sales overseas. How does a soaring dollar affect its profitability, both at home and abroad?

### The inflation rate in Great Britain is expected to be 4% per year, and the inflation rate in Switzerland is expected to be 6% per year.

9. The inflation rate in Great Britain is expected to be 4% per year, and the inflation rate in Switzerland is expected to be 6% per year. If the current spot rate is £1 = SF 12.50, what is the expected spot rate in two years? 10. If the \$:¥ spot rate is \$1 = ¥218 and interest rates in Tokyo and New York are 6% and 12%, r

### Griffey-Lang Food Company

9. The Griffey-Lang Food Company faces a difficult problem. In management's effort to grow the business, they accrued a debt of \$150 million while the value of the company is only \$125 million. Management must come up with a plan to alleviate the situation in one year or face certain bankruptcy. Also upcoming are labor relations

### International Finance: Principle Patients

Jose Angel Gurria, Mexico's chief debt negotiator and the architect of its swap program, questions the gain to Mexico from its swap program: "The latest restructuring package on our debt gives us 20 years to repay principal with no principal payments for seven years. So why are we giving money away? Why pay 88 cents for debt & i

### Bear spread on the Japanese yen

7. A trader executes a "bear spread" on the Japanese yen consisting of a long PHLX 103 March put and a short PHLX 101 March put. a. If the price of the 103 put is 2.81 (100ths of ¢/¥), while the price of the 101 put is 1.6 (100ths of ¢/¥), what is the net cost of the bear spread? b. What is the maximum amount the trade

### Units in beginning work in process,

See attached file for full problem description. 1- In Davis Company , there are 2,000 units in beginning work in process, 11,000 units started into production, and 1000 units in ending work in process 55% complete. How many physical units are to be accounted for? 2- Orzel Corporation began October with 350 units in be

### General financial health of Krispy Kreme

Discuss the importance of each of the five analysis: depreciation, company stock, cash flow statement, income statement trend analysis and management analysis. Explain what the information conveys to management. How would I use each of these tools when analyzed Krispy Kreme's financial statement and what do they revel about the

How would you respond to Mr. Helzner? Use concept of market's behavior. Is this evidence of inaccurate price discovery? Are there market structure enhancements that could address Mr. Helzner's concerns? See the picture for a chart of RMI's stock price around this event. See the attached file.

### A problem on expected values:

Depending upon the state of the economy, Ables Manufacturing Corp. expects to sell the following number of prefabricated buildings. The probability of each state is indicated. What is the expected value of the total sales projection? Outcome Probability Units Price Bad 0.20 100 \$20 Normal 0.50 180 \$25 Great 0.30 210 \$30

### Break even point, degree of operating leverage, degree of financial leverage, and degree of combined leverage

Use the following information to answer the next four questions: Sales (30,000 units) Variable Costs \$150,000 100,800 Contribution margin Fixed manufacturing costs \$49,200 24,000 Operating Income Interest \$25,200 18,000 Earnings before taxes Taxes (30%) \$7,200 2160 Net Income \$5,040 Shares Outstanding 600 Using

### Constant-Growth Model: Rate of Return, Discount Rate

A stock sells for \$40. The next dividend will be \$4 per share. If the rate of return earned on reinvested funds is 15 percent and the company reinvests 40 percent of earnings in the firm, what must be the discount rate?

### Optimal Financing and Subsidiary

Biz, Inc. has a subsidiary in a country where the government allows only a small amount of earnings to be remitted to the United States each year. Should Biz finance the subsidiary with A) debt financing by the parent? B) equity financing by the parent? C) financing by local banks in the foreign country?

### Consolidation of Variable Interest Entities

Financial Interpretation No. 46R, "Consolidation of Variable Interest Entities," references several of the FASB Concepts Statements in motivating the need to identify and consolidate variable interest entities. FIN 46R also expands the traditional definition of control as provided in Accounting Research Bulletin 51, "Consolidate

### Intersect Investment Scenario - Gap Analysis

I could use some help. I need to prepare a paper in which I summarize the situation in the Intersect Investment Scenario. Develop a problem statement to realize the most significant opportunities.I need to Remember to consider the following questions as the work is done: a. Describe the situation. What is the situation? What

### Airline Rescheduling Profitability

Adventure Airline has revenue of \$140 million, fixed cost of \$100 million, and variable cost of \$38 million, which increases in proportion to revenue. Their Planes are flying 70% full of paying passengers. If they reschedule and achieve 75% of the seats full of revenue paying passengers at the same fare, what will be the percen

### Topic of Bankruptcy: A good friend of yours has had serious financial misfortunes lately.

If a good friend of yours has had serious financial misfortunes lately and is unable to meet her debt payments, what advice can you give? Be sure to include the topic of bankruptcy because she has heard that it eliminates all your credit problems. In your discussion, distinguish between straight bankruptcy and a wage earner plan

### Eleanor Spryzak has endowed her alma mater with a scholarship that is designed to pay out a sum of money to a worthy student every year forever.

Please, help me and show how to calculate. 1. Eleanor Spryzak has endowed her alma mater with a scholarship that is designed to pay out a sum of money to a worthy student every year forever. The scholarship amount increased in value by 3% every year. Which terms most accurately describe these assets? a. annuity b. perpetuit

### Financial Analysis: Recent Changes in the Use of IT

Describe how one (any one) aspect of financial analysis has been improved by recent changes in the use of IT tools?

### A Discussion of Variable, Fixed and Mixed Costs

If a company were to pay its production manager a salaray of \$5,000 per month, and salespersons are paid strictly on commission, at \$2 for each case of product sold. The company's salesperson commisions are an example of what? (Variable, fixed or mixed costs?)

### Financial managers: profit versus non profit

How is the job of a financial manager in a nonprofit organization different from that of a financial manager with a profit&#8209;seeking firm? Should financial managers in non-profit organizations be compensated equally to their counterparts in profit&#8209;seeking firms? Why or why not? Do you see the job of the non-profit

### Financial Performance - Disney

Please help evaluate Disney organization's financial performance over the past two years using financial ratios. Calculate the following ratios for each year for the following: Current Debt The Walt Disney Company and Affiliated Companies - 2007 Annual Report http://corporate.disney.go.com/investors/annual_reports.ht

### Classifying Cash Flows

Classify each of the following business activities as an operating, investing, or financing activity. 1. Acquiring inventory for resale. 2. Buying and selling stocks and bonds of other companies. 3. Selling shares of stock to investors for cash. 4. Selling products or services. 5. Buying property, plant, or equipment.

### Example of Variable Cost

What is the excess of a product's selling price over its variable costs referred to as? a) gross profit b) contribution margin c) gross margin d) manufacturing margin

### The common stock of BJ's Auto Clinic sells for \$38.25 a share.

3. The common stock of BJ's Auto Clinic sells for \$38.25 a share. The stock is expected to pay \$1.90 per share next month when the annual dividend is distributed. BJ's has established a pattern of increasing their dividends by 2.5 percent annually and expects to continue doing so. What is the market rate of return on this stock?

### Addtional Amount Needed For Down Payment

23. Marie needs \$26,000 as a down payment for a house 4 years from now. She earns 5.25% on her savings. Marie can either deposit one lump sum to day for this purpose or she can wait a year and deposit a lump sum. How much additional money must Marie deposit if she waits for one year rather than making the deposit today?

### Increasing Housing Prices

You hope to buy your dream house 3 years from now. Today, your dream house costs \$247,900. You expect housing prices to rise by an average of 7.5% per year over the next 3 years. How much will you dream house cost by the time you are ready to buy?

### Positive Operating Income

A company estimates that its fixed costs are \$500,000, and its variable costs are \$3.00 per unit sold. Each unit produced sells for \$4.00. What is the company's breakeven point? In other words, how many units must it sell before its operating income becomes positive?

### Scenario Analysis of a Company

Scenario Analysis: Your firm, Agrico Products, is considering the purchase of a tractor that will have a net cost of \$36,000, will increase pre-tax operating cash flows before taking account of depreciation effects by \$12,000 per year, and will be depreciated on a straight-line basis over 5 years at the rate of \$7,200 per yea

### External Financing - Tobin Supplies Company

Tobin Supplies Company expects sales next year to be \$500,000. Inventory and accounts receivable will increase \$90,000 to accommodate this sales level. The company has a steady profit margin of 12 percent with a 40 percent dividend payout. How much external financing will Tobin Supplies Company have to seek? Assume there is no