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?
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 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
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
Match the following finance terms with the solutions below. If none fit, indicate it. A. The examination of differences among revenue, costs and cash flows under alternative courses of action. B. A cost incurred in the past that cannot be changed as a result of future actions. C. The process of planning and evaluating propo
MT 217 can manufacture the new PDA for $200 each in variable costs. Fixed costs for the operation are estimated to run $4.5 million per year. The estimated sales volume is 70,000, 80,000, 100,000, 85,000, and 75,000 per each year for the next five years, respectively. The unit price of the new PDA will be $340. The necessary equ
Suppose buy orders are placed for twice as many shares of a stock as the number of shares offered for sale in a one-hour period. What would be the relationship (higher, lower, or the same) between the reported trading price just before and just after that one-hour period, assuming no other events occurred? What kind of experi
List the advantages and disadvantages of Public versus Private Financing. Explain why companies go to private and leveraged buyouts. The advantages and disadvantages of going public is an area worthy of consideration. While it seems that the ultimate goal of every small firm is to grow large enough to one day be public, th
Please provide three examples of how financial analysis can be used to assess and improve business performance. How do financial analysis tools help managers and their companies?
This solution explains if cost efficiency equals the least costly, what quality of care means, if emergency rooms should be forced to provide for uninsured patients, and how terms shape beliefs.
1. Is it fair to require hospital emergency departments to provide unreimbursed care? 2. How do terms we use shape our beliefs (for example, charity care and bad debts both being considered uncompensated care)? 3. What does "quality of care" mean? 4. Does cost efficiency mean least costly? Why?
Cash in bank: $20,000 Receivables(net of allowance for doubtful accounts): $160,000 Merchandise inventory: $90,000 Total current assets: $270,000 Accounts payable(including accured operating expenses): $150,000 Working capital: $120,000 (the above breakdown is of the financial statement of june 30 and shows the current w
Can you help me evaluate Medicare, Medicaid, VA, or active military systems of healthcare? Evaluate and discuss components of cost, quality, or access to care within the context of one of these systems.
Scenario: The tsetsekos Company was planning to finance an expansion. The principal executives of the company all agreed that an industrial company such as theirs should finance growth by means of common stock rather than by debt. However, they felt that the current $42 per share price of the company's common stock did not refle
"As we all saw from this class, many of the building blocks of the traditional finance theory were questioned and challenged when it came to the relevance of such theory to the problems that investors and managers face in the real world every single day. Building blocks like all the risk definitions and tools; and even the whole
This case involves the evaluation of Kitty (Hawk Food), Inc., a restaurant food wholesaler in eastern North Carolina. The firm is experiencing difficulty paying trade debt and collecting trade receivables on time, which is causing cashflow difficulties and threatening the creditworthiness of the firm. The case should require 1 t
Regal Flair Enterprises has 2 product lines: jewellery and women's apparel. Cost and revenue data for each product line for the current month are as follows: Product lines
What is a sensitivity analysis? How would you use it in planning for future expansions? What role does this kind of analysis play in your work environment and/or your home environment? If you were trying to add a new service to your facility, what ratios would you use to determine if it would be profitable and how long until it
1. Bay, Inc. purchased a new machine for $50,000 on March 28, 2004. The useful life was expected to be eight years and then they would sell it to the junk yard for $2,000. The machine was sold for $34,000 on October 2, 2008. Assume no depreciation in the year of purchase and a full year of depreciation in the year of sale.
1. What are the advantages that Fieldf/x provides for the owners of professional baseball teams? What are the advantages that Fieldf/x provides for professional baseball players? Are there disadvantages for the players? Support your answers. 2. Discuss the role of a TPS in a service organization. 3. Discuss how the Internet ca
The CFO has been evaluating his firm's short-term financial management practices. Below are its uncollected balance percentages for the most recent quarter as well as for the previous year's percentages. Month Most Recent Year Previous Year Jan 12% 18% Feb 22%
Calibrated Manufacturing makes an electronic component that is in great demand. The component sells for $20 each. Calibrated's current capacity is 10,000 units per week. For the last few months, however, the company has been receiving new orders at a rate of 14,000 units per week, and now has a substantial backlog. The compa
Montejo Corporation expects sales to be $ 12 million, operating costs other than depreciation are expected to be 75 percent of sales, and depreciation to be $ 1.5 million during the next year. All sales revenues will be collected in cash, and costs other than depreciation must be paid during the year. Montejo's interest expense
Crafty Tools manufactures an electric motor that is uses in several of its products. Management is considering whether to continue manufacturing the motors or to buy them from an outside source. This is the following information that is available. 1-The company needs 10,000 motors per year. The motors can be purchased from an
Dahlia Enterprises needs someone to supply it with 114,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you've decided to bid on the contract. It will cost you $810,000 to install the equipment necessary to start production; you'll depreciate this cost straight-line to zero
We are purchasing a 28-day Treasury bill, during a normal year (non-leap year), and want to find out both the discount rate and the investment rate. If we purchase the bill for $998, what are the two rates? If we purchase a 91 day Treasury bill for $995, what are the two rates? (Show all work/calculations/formulas.)
What is LIBOR, and how does it affect a firm's cost of borrowing?
I am needing assistance. I am practicing a dissertation process and want to be clear about my knowledge of each component of the process. I am trying to create an overview of a proposal for a finance dissertation based upon using statistical tools for financial research and risk assessment / portfolio theory. At a minimum, the
Financial ratios by themselves provide very little information about a firm. We need to compare ratios across firms in similar industry sectors. The two methods for analyzing financial ratios for a firm are: time trend analysis and similar group analysis. Elaborate on how each of these methods can be helpful in understanding how
The management of a conservative firm has adopted a policy of never letting debt exceed 30 percent of total financing. The firm will earn $10,000,000 but distribute 40 percent in dividends, so the firm will have $6,000,000 to add to retained earnings. Currently the price of the stock is $50, the company pays a $2 per share divid
Discuss capitation payment methodologies between payers and providers, and Medicare or Medicaid with commercial Managed Care organizations (MCO). Explain at least three important aspects that you as a medical business professional would need to understand when negotiating payment contracts either between a provider and the MCO,