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EBIT for a Levered Firm

For a levered firm, EBIT is equivalent to: 1. net income 2. proforma earnings 3. operating profit 4. net income before taxes

Investor Behavior

Which assumptions regarding investor behavior are required by the CAPM? 1. Investors try to maximize their wealth 2. Investors consider only risk when making investments 3. Investors are risk averse 4. Investors adopt a long-term perspective

M & M Proposition I

Which is not an assumption underlying M & M proposition I? 1. No arbitrage 2. No taxes 3. Corporate investments are risk-free 4. Symmetric information

"Real" Activities

Which of the liabilities form part of a company's "real" activities? 1. short-term debt 2. accounts payable 3. accrued operating expenses 4. long-term debt

Various Mathematics Problems

Please show the work on the answers asked. 1 - If during an election there were 6372 registered voters and 3560 registered voters voted, what percentage of the registered voters actually cast a vote? If there were 10,000 people in the district, what percent of the population voted in the election? What percent of the populati

Accounting for Non-Accountants

You have been asked by the CEO of your company to give a presentation to the students at a local college. You were specifically asked to discuss the role of an accountant. 1. Explain the purpose and objective of accounting. 2. What is the purpose of corporate governance, and why is it important to the company? 3. Why is an

Signs of a Profitable Firm

1. Which of the following statements is CORRECT? a. Typically, a firm's DPS should exceed its EPS. b. Typically, a firm's EBIT should exceed its EBITDA. c. If a firm is more profitable than average (e.g., Google), we would normally expect to see its stock price exceed its book value per share. d. If a firm is more profitable

Corporate Finance - Calculating Leverage

Assume that a firm has the following Income Statement. Use this data to determine the business risk and the financial risk as measured by the degree of operating leverage and the degree of financial leverage, respectively. Also, determine the combined leverage as found with the degree of combined leverage. Utilize these risk m

EBIT Vs. Optimal Leverage

Define EBIT and discuss why the optimal level of leverage from a tax-saving perspective is the level at which interest equals EBIT. Does this have a connection with under-leveraging corporations,both domestically and internationally?

Cost Value Equipment

Get started by watching the 'Should I Buy New Equipment Now?' video in the link below then answer the following questions. The engraving department uses an aging rotary engraver to engrave plaques and trophies. The machine has been rel

Operating, investing and financing activities

The following information reflects cash flow and other activities of Framer Company for six months ended June 30 Paid for equipment $45,000 Paid for income taxes $ 3,000 Paid for insurance

Flexible and Static Budgets

The three components involved in the creation of a budget are revenues, expenses, and the statistics (volume). A. In what order are each component determined and why? B. What is the differences between a static and flexible budget? C. As a manager, which type of budget would you prefer to operate under? Why?

Variable, Fixed and Semi Variable Expenses

Please define and explain the following type of expenses and give an example of a business activity from your profession that may change the amount of variable expenses with each definition. a) Variable expense: b) Fixed expense: d) Semi variable or Mixed expense: Please identify if you would assign each of the following

Price Comparison Study

Pizza comparisons of Dominos & Little Caesars. What is the best pizza deal in your area? How do you conduct comparative shopping when different pizza stores have different size pans? Are prices for some large pizzas for a particular store proportional to the amount of pizza for each size? Does any combination of two pan si

Finance Question: Beta and Risk

You are working as an intern at Coral Gables Products, a privately owned manufacturing company. You got into a discussion with the Chief Financial Officer (CFO) at Coral Gables about weighted average cost of capital calculations. She pointed out that, just as the beta of the assets of a firm equals a weighted average of the b

Debt-Equity, APV, and WACC

Problem 14-2 Assume that MM's theory holds with taxes. There is no growth, and the $40 of debt is expected to be permanent. Assume a 40% corporate tax rate. a. How much of the firm's value is accounted for by the debt-generated tax shield? b. How much better off will UF's a shareholder be if the firm borrows $20 more an

Alternative Investment decisions

Describe the two distinct sets of project alternatives dealt with in every evaluation. In your description, identify an example of each set. Following the descriptions, discuss why the comparison of investment alternatives is difficult when each alternative is useful, even outside of the project.

AIG and the Financial Crisis

AIG played a central role in the financial crisis by issuing swaps to investors in CDO tranches, promising to reimburse them for any losses on the tranches in exchange for a stream of premium-like payments. AIG was rated AAA in 2006. This credit default swap protection made the CDOs much more attractive to potential investors be

Dumpster Diving: Protecting Information

One of the things a security analyst must consider when protecting their infrastructure and information is the ability of an attacker to access information about an organization, systems they utilize, and the information their protecting. One of the techniques an attacker uses is reconnaissance. Reconnaissance is the first pha

Return on Investment in Real-World Organizations with examples

I am trying to find online information, journal articles or textbook references regarding a business approach to evaluation using ROI in a real-world organization. Then, I need to write a 2-3 page APA-formatted paper explaining their use and effectiveness.

Financial Terminology and Health Care Finance

Locate at least two articles about one of these financial terms: balance sheet, shareholder's equity, EBITDA, EBITDAM, financial ethics, financial benchmarking, financial trend analysis, and ratio analysis. Write a 1,000- to 1,400-word paper discussing the financial term you have chosen and its application to health care fina

Advise the Board on Appropriate Funding Sources

Assume that you have recently joined a family owned renewable energy company in the UK and your first task is to advise the board on appropriate funding sources to secure the 100m that the company requires to fund a new investment project. You have been asked to provide a report detailing the various funding sources available

Financial Analysis of Investment Purchases

1. Mario just invested 12K into an interest bearing account that yields 11.0% Inflation is 6.6% a) What is the actual dollar value of Mario's investment be after 9 years b) What is the inflation-free interest rate (round to the nearest .01 percent) c) What will the constant dollar value of Mario's investment be after 9 years

Internet Security

1. Descibe ciphertext and explain how you would test a piece of ciphertext to determine quickly if it was likely the result of transposition? 2. Describe how a VPN works. 3. Describe how a DMZ is used to protect a network but remain open for business. 4. Describe the difference of how a HIDS and NIDS work. Please spell out th

Principles of Finance - The Cost of Capital

1) (Cost of Debt) Belton is issuing a $1,000 par value bond that pays 7 percent annual interest and matures in 15 years. Investors are willing to pay $958 for the bond. Flotation costs will be 11 percent of market value. The company is in an 18 percent tax bracket. What will be the firm's after-tax cost of debt on the bond?

Target Corporation Financial Analysis and Interpretation

The ability of a business to meet its short-term cash requirements is called liquidity. It is affected by the timing of a company's cash inflows and outflows along with prospects for future performance. Efficiency refers to how productive a company is in using its assets, and it is usually measured relative to how much revenue i

Responsibility income statement preparation

RESPONSIBILITY INCOME STATEMENT PREPARATION HAPPY LAND is segmented into two sales departments: software and video games. During April these two departments reported the following operating results: Software Video games Sales

Alternative Proposals for Modernizing Production Facilities

Micro Tech is considering 2 alternative proposals for modernizing its production facilities. To provide a basis for selection the cost accounting dept has developed the following data regarding the expected annual operating results for the 2 proposals: P