1. Deriving the Forward Rate: Assume that annual interest rates in the U.S. are 4 percent, while interest rates in France are 6 percent. a. According to IRP, what should the forward rate premium or discount of the euro be? b. If the euro's spot rate is $1.10, what should the one-year forward rate of the euro be? 2. Co
Net cash flow provided (used) by operating activities. Cash receipts from: Customers $270,000 Investments by owners 54,000 Sale of building 90,000 Proceeds from bank loan 60,000 Cash payment from: Wages $82,000 Utilit
Company Selection Paper At one time many customers turned to Sears for home improvement projects. As the economy boomed many warehouse stores began to open their doors. Today, Lowe's and Home Depot are two well-known companies that exist within the United States. Both companie
1. What are some examples of fixed and variable costs from your workplace? Which costs may have both variable and fixed components? How can this be resolved for analysis purposes? 2. When is it appropriate for companies to use activity-based costing? How might activity-based costing be used in your company? What are some diff
Robert recently borrowed $20,000 to purchase a new car. The car loan is fully amortized over 4 years. In other words, the loan has a fixed monthly payment, and the balance on the loan will be zero after the final monthly payment is made. The loan has a nominal interest rate of 12 percent with monthly compounding. Looking ahe
1).Which of the following is not considered an acceptable inventory cost method according to GAAP? A) First in , First out (B) First in Last out (C) Last in Fist out (D) Average cost 2) The cost flow assumption selected by a company need not correspond to the actual physical movement of the company's merchandise A) True (B)
Please review the financial information provided, and give your recommendation of the financial health of eBay. Please explain your reasoning. I have uploaded the finances over the last 3 years to help in recommendation.
A company has 10,000 shares of stock that sell for $40 each...if the company issues 5,000 shares of the new stock at the following prices: $40, $20 and $10. What is the effect of each of the alternative offering prices on the existing price per share?
The current price of ADM's stock, Po, is $20 and the company is expected to pay a $2.20 dividend next year. If the appropriate required rate of return for ADM's stock is 15 percent, what should be the price of the stock in one year, P-hat sub 1? Assume that the company has achieved constant growth.
What is the expected return on a portfolio that will decline in value by 13% in a recession, will increase by 16% in normal times, and will increase by 23% during boom times if each scenario has equal likelihood? A) 8.67% B) 13.00% C) 13.43% D) 17.33%
The following journal entries are from the books of Kara Elizabeth Company: a. Buildings 90,000 cash 35,000 Mortgage Payable 55,000 b. Cash 25,000 Capital Stock 25,000 c. Cash 40,000 Loan Payable 40,000 D. Salary Expense 12,000 Cash
The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. Cash flows are in $thousands, and the corporate tax rate is 34 percent. Assume all sales revenue is received in cash, all operating costs are income taxes are paid in cash, and all cash flows occur at
DuPont Analysis. See attached file for full problem description. The Fern Furniture Company, a manufacturer and wholesaler of high-quality home furnishings, has been experiencing low profitability in recent years. As a result, the board of directors has replaced the president of the firm with a new president, Helen Adams, who h
A company sells lawnmowers for $895 each. The variable cost per lawnmower is $520. The company's monthly fixed costs are $84,500. Using the C-V-P equation, compute the amount of profit the company will have for a month in which the company sells 375 lawnmowers.
Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 400 payments a day will be made to lock boxes with an average payment size of $2,000. The bank's charge for operating the lock boxes is $.40 a check. The interest rate is .015 percent per day. a. If the
A) Joe won a lottery jackpot that will pay him $12,000 each year for the next ten years. If the market interest rates are currently 12%, how much does the lottery have to invest today to pay out this prize to Joe over the next ten years? b) Mary just deposited $33,000 in an account paying 10% interest. She plans to leave the
Please help with the following problems. Provide at least 200 words in the solution. What financial information does the current ratio measure? When you calculate a current ratio, what does the calculated number mean? What is the difference between the current ratio and the quick ratio, and why do these differences matter in
With the following data, find the expected rate of inflation during the next year. - k* = real risk free rate = 3% - Maturity risk premium on 10-year T-bonds = 2%. It is zero on 1-year bonds, and a linear relationship exists. -Default risk premium on 10-year, A-rated bonds = 1.5% -Liquidity premium = 0% -Going int
One-year Treasury bills yield 6 percent, while Treasury notes with 2-year maturities yield 6.7 percent. If the expectations theory holds (that is, the maturity risk premium is zero), what is the market`s forecast of what 1 year T-bills will be yielding one year from now?
1)Many financial planners recommend that you hold emergency reserve assets equal to ___ months of after tax income A)3-6 (B) 5-7(C) 7-12 (D)12-15 2)From a federal income tax perspective, interest on U.S Series EE bonds A) May be deferred until redemption (B) may be deferred until redemption and may be avoided if it is used
Assume that IBM stock is selling for $110 per share and that you short sell 200 shares of the stock. A) What would be your dollar return if the price of IBM stock drops to $95 per share? B) What would be your dollar return if the price of IBM stock increases to $120 per share? C) Is there a limit to your gains? Is there
Use the Library to go to the SBA (United States Government, Small Business Administration) web site. There is a vast amount of information available on this site. You are encouraged to spend some time there exploring the links within the site. Minimally, click on the link titled: "Financing Your Business". Read at least one of t
What are some similarities and differences between common stock and preferred stock? As a shareholder, would you want preferred or common stock? Why? As a corporation, would you rather issue preferred or common stock? Why?
On January 1, Armada Corporation had 95,000 shares of no-par common stock issued and outstanding. The stock has a stated value of $5 per share. During the year, the following occurred Apr 1 Issued 15,000 additional shares of common stock for $17 per share. June 15 Declared a cash dividend of $ 1 per share to stockholders of
Describe the financial data found in the company's financial statements, including footnotes. Be sure to include a description of all three basic financial statements.
4. You want to purchase a Car that costs $40,000. You want to finance as much of the purchase as possible with a 5-year bank loan at 12% compounded monthly, but can only afford loan payments of $750 per month. How much will you need as a down payment to buy the boat? (Round to the nearest dollar) a. $3,523 b. $4,637 c. $5,
Answer #2 because #1 is only for reference. Here is a practice problem: #2 Steve Smith, owner of Steve's Bowling Alley, generated $30,000 in sales for the month of January. "Regular" customers are allowed to play on account. $22,000 of January sales were collected in cash, and $8,000 was applied on account. What would be
Steve Smith, the owner of Steve's bowling alley, purchased $10,000 of bowling shoes on 1/31/07. He paid $5,000 in cash, and applied the rest on account. What would be the journal entry to record this transaction? In other words, which accounts should be debited and credited?
You and your group have been asked to create an informative slide presentation to managers, most of whom do not have a technical knowledge of accounting. First, we must discuss key elements with top executives. And then decide how to assess the stability of Strident Marks (the make believe company) Second, define stability, a
What is the cost of Preferred Stock? Kp = Cost of preferred stock X Dp = The annual dividend on preferred stock $8.00 Pp = The price of preferred stock $95.00 F = Flotation, or selling cost $3.00