Explore BrainMass


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

Finance Terms

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

Finance - WACC

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

Corporate Financial Management - Relationship between reported trading price

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

Public vs. Private Financing

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

Preparing a Monthly Cash Budget

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

Stock Conversion

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

Traditional Finance Paradigm

"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

Solving Problems in Difficulties in Paying Trade Payables

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

Income Statement for Marketing Strategy

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

Calculating Healthcare Formulas

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

Depreciation and Amortization Problem Set

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.

Fieldf/x, TPS, and Investment Decisions

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

Collection experience improved or declined over period

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%