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Anticipating Covenant Violation

Foot Locker, Inc., reported an $18 million loss on sales of $1,283 million for the quarter ended August 4, 2007. The quarterly financial filling (10-Q) also contained this warning for investors and creditors. Source: Foot Locker Inc. Form 10-Q for the quarter ended August 4, 2007. "Under the Company's revolving credit and

Risk Management

True or False 1. Pure risk exists when there is uncertainty as to whether loss will occur. 2. If two companies have the same number of exposure units and experience the same average number of losses, then the degree of risk for each company tends to be equal. 3. Risk avoidance is a conscious decision not to expose oneself o

This posting discusses amortization tables used for loans.

Could you please define and explain an amortization table. What is it and what is it used for? Finally, please plug in a loan amount to a table of your selection (share your resource) and identify the declining interest through time. Feel free to use a personal loan example or a fictitious either way works fine.

Risk Free Portfolio

Suppose you plan to create a portfolio with two securities: A and B. A has an expected return of 35% with a standard deviation of 22%. B has an expected return of 20% with a standard deviation of 9%. The correlation between the returns of these two securities is perfectly negative. What percentage of your investment should be in

Director of Athletics at Big Time State University (BTSU)

As the Director of Athletics at Big Time State University (BTSU), you have been approached by the president of BTSU about building a new state-of-the-art on-campus arena. She wants to know your ideas regarding the financing of the new facility. What will you tell her?

Price Wars

Under what environmental conditions are price wars most likely to occur in an industry? Why? What are the implications of price wars for a company? How should a company try to deal with the threat of a price war? Explain

This posting discusses EAR and APR

What is the difference between the annual percentage rate (APR) and the effective annual rate (EAR)? Which rate do you believe is more relevant for financial decisions and why?

Business Finance Question

Given the following expected returns and standard deviations of assets A, B and C, which asset should the prudent financial manager select? Asset Expected Return Standard Deviation A 10% 10% B 12% 10% C 12% 8%

Calculating the amortization expense of an intangible asset

Jeff Corporation purchased a limited-life intangible asset for $120,000 on May 1st, 2009. It has a useful life of 10 years. What total amount of amortization expense should have been recorded on the intangible asset by Dec 31st, 2010? a.) 0 b.) 24,000 c.) 32,000 d.) 36,000

Intangible Amortization For Palmiero Company

Intangible Amortization For Palmiero Company a) Palmiero purchased a patent from Vania Co. for $1,500,000 on January 1, 2010. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2010. During 2012, Palmeiro determined that the economic benefits of the patent would not last longer tha

Financial analysis of Exxon Mobile, Merck & Co, Target, and Verizon

Select ONE of the four companies for analysis. Exxon Mobil Corp. (XOM) - Merck & Co. Inc. (MRK) - Target (TGT) - Verizon Communications Inc. (VZ) Go to the Yahoo!Finance Web site. Enter the stock ticker symbol or name of the company you wish to analyze in the input field next to Get Quotes at the top of the page and

Where should this person look for financing?

If someone believes they can easily double the size of a business within 2 years, but the financial forecast shown in the business plan show the business can not generate enough cash to fuel the growth at that pace and shows that an extra $550k in external capital is needed to meet the goals and objectives they have set for the

PepsiCo and Coca-Cola Financial Analysis

You will assume the role of a financial analyst and create a full analysis between Coca-Cola and PepsiCo. Please explain all calculations and ensure that you answer each and every question thoroughly. You will need to locate Coca-Cola and PepsiCo, Inc annual financial statements for 2007. These can be easily obtained through the

finance math

Suppose it is May 1985 and the current value of the Greek drachma is Dr 1 = $0.006369, but the expected spot rate 90 days hence is Dr 1 = $0.005980. What is the value of a sales order of Dr 50 million sold on 90-day terms?

Economic Variables for Finance Manages

Assume that Nike Inc. (NKE) is expanding globally. One way to expand globally is to buy shares of other companies, while other way is to open up new branches. But both options are not risk free. How important is it for the financial managers of Nike Inc. to use economic variables in identifying long term financial goals?

Adding Value Through Budgeting

Adding Value Through Budgeting Budgeting is an important part of an organization's overall planning. Through budgeting, each part of an organization's structure can be identified for decision making and control. A reasonable budget can allow an organization to allocate resources and provide a plan and direction for the orga

Corporate Finance Problem

Corporate Finance Problem: 1) On Attachment 2) On Attachment 3) Classify each of the following voluntary settlements as an extension, composition, or a combination of the two. A. Paying all creditors 30 cents on the dollar in exchange for complete discharge of the debt. B. Paying all creditors in full in three per

Long Term Financial Decisions

Sun Coast Savings Bank was founded in l97l in Safety Harbor, Florida, which is just across the bay from Tampa. Safety Harbor is very popular with people who work in Tampa but do not wish to live within the city itself. Per-capital income in Safety Harbor is substantially above the national average; in fact, the town has a rep

Analyzing the effect of price changes on purchasing

Consider two investors (A and B) with the following demand curve for a stock: A: p=100-q B: p=150-2q a) At a price of $50, how much will A and B purchase? b) If the price falls to $30, who will increase their holdings more? c) On this basis, which investor seems to be more overconfident?

Designing an Operating Mechanism

As a leader, your job is to define the operating mechanisms for your organization, use them to align the teachable point of view (TPOV), and create positive emotional energy. While you may not be in a top leadership role, you can still make the most of the operating mechanisms you have and create new ones. Before creating or

Find the intrinsic value of the stock

Find the intrinsic value of the stock of company ABC using the following data: risk free rate = 5% market risk premium = 8% Expected market return = risk free rate + market risk premium beta = 0.9 ROE = 12.5% dividend payout ratio = 0.22 Dividends for the next 4 years are expected to be .59, .67, .76, .85. Subsequent

Key financial information of Abercrombie and Fitch

ABERCROMBIE AND FITCH HENNES & MAURITZ Prepare a table for a period of three years showing some key financial information for the two companies listed above. Include four items from the balance sheet, four items from the income statement, and four items from the statement of cash flow for each company.