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Enterprise Unlevered and Levered Beta

Ethier Enterprise has an unlevered beta of 1.0. Ethier is financed with 50% debt and has a levered beta of 1.6. If the risk free rate is 5.5% and the market risk premium is 6 %, how much is the additional premium that Either's shareholder require to be compensated for finanical risk?

Promotion and Price

Can you help me with the following assignment/project? Vacations Fitness/Exercise products Gay men or women Black women aged 18-30 1. Explain what you think would be an appropriate promotions strategy for the groups listed above. In doing so compare and contrast the two promotions strategies explaining why you think

Opportunity cost

Explain "opportunity cost" and how it relates to the definition of economics. To illustration this concept, give your explanation of the following decisions that would entail the greatest opportunity cost: a.Allocating a square block in the heart of New York City for a surface parking lot, OR b. Allocating a square block at th

Effect of Depreciation on Operating Cash Flow

Please see the attached file. You are analyzing a project and have developed the following estimates. The depreciation is $7,600 a year and the tax rate is 34 percent. What is the worst case operating cash flow?

Corporate Finance: Selling Price and Operating Cash Flow

Please help with the following problem. Newton Industries is considering a project and has developed the following estimates: unit sales = 7,300, price per unit = $149, variable cost per unit = $91, fixed costs = $216,400. The depreciation is $94,700 a year and the tax rate is 35 percent. What effect would an increase of $1

Finding Annual Operating Cash Flow

Please help answer the following question. Hi Fliers is considering making and selling custom kites in two sizes. The small kites would be priced at $9 and the large kites would be $24. The variable cost per unit is $5 and $11, respectively. Jill, the owner, feels that she can sell 2,600 of the small kites and 1,700 of the l

Downsizing Methodology

Your company has decided it must downsize the scope of its business. Which is the most important goal for the company? 1) To improve its financial performance or 2) to reduce morale problems of employees scheduled to be laid off? Defend your position.

Mutual Fund.

I need help reviewing the problem below... Over the past year, the Dollar has depreciated about 10% against the Euro. A year ago you took out a home equity loan in the U.S. at an interest rate of 8% and you invested the money in a German mutual fund that paid a 5% Euro return. What net combined return did you earn on all

1. The Internal Revenue Code authorizes deductions for trade or business activities if the expenditure is "ordinary and necessary". 2. Tax cost recovery methods include depreciation, amortization, and depletion. 3. The basis for a personal use asset converted to business use is the lesser of the asset's cost basis or fair market value on the date of the transfer or conversion. 4. An asset's tax adjusted basis is usually greater than its book adjusted basis. 5. All tax gains and losses are ultimately characterized as either ordinary or capital. 6. Generally, interest income is taxed at preferential capital gains rates and dividend income is taxed at ordinary rates. 7. When a taxable bond is issued at a premium, the taxpayer must calculate and apply the yearly amortization amount to reduce a portion of the actual interest payments that taxpayers include in gross income. 8. One purpose of Form W-4 is to determine an employee's withholding. 9. Employers receive a deduction for compensation paid to and employment taxes paid on behalf of employees. 10. Defined benefit plans specify the amount of benefit an employee will receive on retirement while defined contribution plans specify the amounts that employers and employees will (or can) contribute to an employee's plan. 11. A taxpayer can only receive a saver's credit if she contributes to a qualified retirement account. 12. Renting a residence may have nontax advantages over owning a home. 13. Taxpayers meeting certain requirements may be allowed to exclude at least a portion of gain realized on the sale of a principal residence.

1. The Internal Revenue Code authorizes deductions for trade or business activities if the expenditure is "ordinary and necessary". 2. Tax cost recovery methods include depreciation, amortization, and depletion. 3. The basis for a personal use asset converted to business use is the lesser of the asset's cost basis or fair mark

Pricing...

(a.) You know from data collected on the Widget Market that market demand and market supply have both increased recently. As manager of the facility, what decisions should you make regarding production levels and pricing for your Widget facility? Remember that supply and demand are about the market supply and market demand, w

Policy Calculations Insurers Operate

1. Assume that insurers operate in an environment where price regulation does not exist. Describe two potential benefits that this type of system provides to consumers as well as two potential costs. 2. Define agency costs and discuss whether these costs reduce business value. 3. Describe the common objectives that employ

Patent amortization expense

You are examining the financial statements of a company. You observe patent amortization expense of $1.5 million and a loss on impairment of goodwill for $25 million. (a) Describe how the accountants arrived at these amounts. (b) Interpret any information provided by these disclosures.

Differentiate between a defined contribution pension plan and a defined benefit pension plan. Explain how the employer's obligation differs between the two types of plans. Question 10 Identify the five components that comprise pension expense. Briefly explain the nature of each component. E.20-7 (Basic Pension Worksheet) The following defined pension data of Doreen Corp. apply to the year 2008. Projected benefit obligation, 1/1/08 (before amendment) 560,000 Plan assets, 1/1/08 546,200 Prepaid/accrued pension cost (credit) 13,800 "On January 1, 2008, Doreen Corp., through plan amendment, grants prior service benefits having a present value of " 100,000 Settlement rate 9% Service cost 58,000 Contributions (funding) 55,000 Actual (expected) return on plan assets 52,280 Benefits paid to retirees 40,000 Prior service cost amortization for 2008 17,000 Instructions For 2008, prepare a pension worksheet for Doreen Corp. that shows the journal entry for pension expense and the year-end balances in the related pension accounts. E.22-19 (Error Analysis; Correcting Entries) A partial trial balance of Julie Hartsack Corporation is as follows on December 31, 2008. dr. cr. Supplies on hand 2,700 Accrued salaries and wages 1,500 Interest receivable on investments 5,100 Prepaid insurance 90,000 Unearned rent 0 Accrued interest payable 15,000 Additional adjusting data: A physical count of supplies on hand on December 31, 2008, totaled $1,100. Through oversight, the Accrued Salaries and Wages account was not changed during 2008. Accrued salaries and wages on December 31, 2008, amounted to $4,400. The Interest Receivable on Investments account was also left unchanged during 2008. Accrued interest on investments amounts to $4,350 on December 31, 2008. The unexpired portions of the insurance policies totaled $65,000 as of December 31, 2008. $28,000 was received on January 1, 2008 for the rent of a building for both 2008 and 2009. The entire amount was credited to rental income. Depreciation for the year was erroneously recorded as $5,000 rather than the correct figure of $50,000. A further review of depreciation calculations of prior years revealed that depreciation of $7,200 was not recorded. It was decided that this oversight should be corrected by a prior period adjustment. Instructions Assuming that the books have not been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.) Assuming that the books have been closed, what are the adjusting entries necessary at December 31, 2008? (Ignore income tax considerations.)

Please see attached Question 2 Differentiate between a defined contribution pension plan and a defined benefit pension plan. Explain how the employer's obligation differs between the two types of plans. Question 10 Identify the five components that comprise pension expense. Briefly explain the nature

Bedrosian Incorporated Line of Credit

PROBLEM ATTACHED IN THE FILE Bedrosian Incorporated has a line of credit from the Belmont National Bank that is due to be renewed on February 1. The bank has requested the company's current Income Statement and Comparative Statements of Financial Position which appear below. TAX RATE 40% KEEP SCROOLING DOWN T

US businesses Vs. Foreign businesses.

Describe the differences between businesses in the U.S. and those in foreign countries with respect to taxation, financial disclosure, and ownership structure. Is privatization reducing or increasing these differences?

FedEx Corporation SEC 10K

1. Compute the margin, turnover, and return on investment (ROI) in 2005 for each of FedExâ??s four business segments (Hint: page 99 reports total segment assets for each business segment.) 2. Assume that FedEx established a minimum required rate of return of 15% for each of its business segments. Compute the residual inco

Operating vs. Financial Leverage

What is the difference between operating and financial leverage? What is the importance of assessing operating vs. financial leverage?

Advanced Taxation: Stock, type of entity, basis, distributions

Sarah owns 45% of the stock in a C corporation that had a profit of $260,000 in 2011. Kevin owns a 45% interest in a partnership that had a profit of $260,000 during the year. The corporation distributed $30,000 to Sarah, and the partnership distributed $30,000 to Kevin. 1. How much income does Kevin report for 2011? 2. Ho

Financial Analysis Problem of Acme

Please help with solution / explanation for the following problem: Acme Manufacturing is a decentralized corporation. Divisions are treated as investment centers. In recent years, Acme has been running about 11% ROA for the corporation as a whole, and has a cost of capital of 9%. One of their most profitable divisions is

Increase in service level for newspaper stand operating cost change

Suppose that a newspaper stand is operating under the following conditions; paper cost $.4, have no salvage value, and sell for $.80. If the salvage value is increased by$.1, what is the increase in service level? a) .5 b) 1 c) 0.07 d) 0 e) unable to determine given only the above information.

Performance Rating for Northeast Airline Gate Agent

A Northeast Airline gate agent, Chip Gilliken, gives out seat assignments to ticketed passengers. He takes an average of 50 seconds per passenger and is rated 115% in performance. A typical agent is expected to take __ seconds to make the seat assignments (round your response to one decimal place).