Explore BrainMass



Why is diversification so important when considering risk? What does it mean to diversify a portfolio? How can you explain what beta means and how can you use it? 247 words

Excel Solver Product Mix Maximizes Revenues

Stanley Furniture produces two types of china cabinets, First Provincial (FP) and Deluxe Modern (DM). Each cabinet goes through 3 departments: carpentry, painting and finishing. The following table contains relevant information on production times per cabinet produced, daily production capacities for each department and net reve

Calculation of new funds

See below the 2006 balance sheet for Marbell Inc. Assets Liabilities & Stockholders' Equity Cash $15,000 Accts Payable $90,000 Accts. Rec. 90,000 Notes Payable 30,000 Inventory 60,000

Conservative and Aggressive Financing Plans

Christensen & Associates is development an asset financing plan. Christensen has $500,000 in current assets of which 15% are permanent, and $700,000 in fixed assets. The current long-term rate is 11%, and the current short-term rate is 8.5%. Christensen's tax rate is 40%. Show a financing plan, conservative, with 80% of asset

Calculating how to handle banking for businesses

Please help with the following finance problem. Major Manufacturing currently has one bank account located in New York to handle all of its collections. The firm keeps a compensating balance of $300,000 to pay for these services (see Section 19.7). It is considering opening a bank account with West Coast National Bank to spe

Multiple Choice Questions - finance practice quiz

** See ATTACHED file(s) for complete details ** Question 1 The Underhill plant has two categories of overhead: maintenance and inspection. Costs expected for these categories for the coming year are as follows: Maintenance $180,000 Inspection 380,000 The plant currently applies overhead using direct labor hour

Global Financial Markets - Risks and Challenges

During the past two decades, financial markets around the world have become increasingly interrelated. Although globalization has brought considerable benefits to national economies and investors, what new risks and challenges has this created for market participants and policymakers?

Advantage and disadvantages of using student loans

I am conducting a detail study on the advantage and disadvantages of university students using student loans. Please tell me the backgrounds/objectives of student loans? Such as since when student loans become commonly used? What was the purpose of student loans? (Preferably based in the UK) Is student loan really a convenien

Expansion and leverage - DeSoto Tools, Inc.

Can you help get me started on this?? ********************** DeSoto Tools, Inc. is planning to expand production. The expansion will cost $300,000, which can be financed either by bonds at an interest rate of 14 percent or by selling 10,000 shares of common stock at $30 per share. The current income statement before expansi

Compare online sources of financial data

Speaking of financial research, What is important is being able to extrapolate all that data, and there is a lot of data out there, into a usable form for you to make wise investment decisions. And, with all the various ratios we've been discussing in class, we also now have the means to utilize some of those formulas and con

Compare Cost of Preventative Maintenance policies for fire department oxygen masks

The fire department has a number of failures with its oxygen masks and is evaluating the possibility of outsourcing the preventive maintenance to the manufacturer. Because of the risk associated with a failure the cost of each failure is estimated at $2,000. The current maintenance policy (with station employees performing mai

Carver Lawrence, LLC: Prepare a financial plan.

See attachment for details. Prepare proforma Financial statements (Balance Sheet, Income Statement, Cash Flow Statement) Discussion about financial findings and what plays a role in the success and/or failure of the business (healthy, environment, customers, etc.) What would you project your ability to be if you wante

Veil Piercing

You have just inherited $ 10 million. Rather than kicking back and avoiding all work, you are contemplating starting and operating a landscaping business with a friend that would require each of you to invest $5,000 for equipment. Your friend suggests that the business be formed as a corporation so that you won't have to buy a l

Important information about Expected Return/Standard Deviation

Suppose you have invested in only two stocks, Y and Z. The returns on the two stocks depend on the following three states of the economy, which are equally likely to happen. State of Economy Return on Stock Y (%) Return on Stock Z (%) Recession 6.30 -3.70 Normal 10.50 6.40 Boom

The World of Finance

1. How are NYSE and NASDAQ similar, if at all? 2. How are the two exchanges different from one another, if at all? 3. What is The Public Company Accounting and Investor Protection Act of 2002? Describe the law in your own words. 4. What other information can you provide these students that will one day help them in t


1. Buck Inc. is considering an expansion project that requires an investment of $90 million in machinery. This is expected to produce sales of $140 million in year 1 and $150 million in year 2. The machinery will be depreciated over two years on a straight-line basis to a zero book value. The machinery will be

Hedge Funds

A hedge is a position established in one market in an attempt to offset exposure to price fluctuations in some opposite position in another market with the goal of minimizing one's exposure to unwanted risk. To put it simple, hedge means that a buy some asset in one market and sell that same asset (or similar assets, gold and si

Corporate finance

1.What is the future value of $1,000, placed in a saving account for four years if the account pays 8%, compounded quarterly? 2..Your brother, who is 6 years old, just received a trust fund that will be worth $25,000 when he is 21 years old. If the fund earns 10 percent interest compounded annually, what is the value of the

Finance Case

CASE-75M Student Version 12/9/2010 Federal Finance Bank Going Public Note: Only questions 1, 2, 5, 6, 7, 8 and 9 are addressed. This model was developed using Microsoft Excel 5.0 for windows. If you are using the student version of the model, some of the cells have been blanked

Personal finance

Personal Finance 1. If you credit application is denied, you a. are entitled to know the specific reason you were denied credit b. can have the police send a detective to investigate the lender c. don`t have any rights provided by law d. can take your case to small claims court for a jury trial 2. If creditors give you n

Personal Finance

Personal Finance 1. Of the following statements, which is not a huge disadvantage of using credit? a. it can be costly to use b. it can be difficult to use repay if overused c. it is more difficult to obtain than repay d. it may tempt you to make impulse purchases 2. Improper use of credit may a. increase your ability t

Compute an exponential smoothing forecast with a=0.20, an adjusted exponential smoothing forecast with a=0.20 and b=0.20 and a linear trend line forecast. Compare the three forecasts using MAD and average error (E) and indicate which forecast seems to be most accurate.

The Oceanside hotel is adjacent to city coliseum, a 24,000-seat arena that is home to the city's professional basketball and ice hockey teams and that hosts a variety of concerts, trade shows, and conventions throughout the year. The hotel has experienced the following occupancy rates for the nice years since the coliseum opene

Finance: Cost of Borrowing Alternatives

Exxon Mobil has a 34% tax rate and has decided to issue $100 million of seven-year debt. It has three alternatives. A U.S. public offering would require an 8% coupon with interest payable semiannually and $900,000 of flotation expense. A U.S. private placement would require an 8-3/8% coupon with interest payable semiannually a

Distortions in financial analysis when using common sizing

There are times when the data can give you some inaccurate predictions. Personally, when I audit a company, I typically use 5 years worth of data. I use 5 years because that is all that our computer software is programed to hold. But, the data is only useful if it is comparable. When a company is in a transition, the numbers

Benefits and limitations of horizontal and vertical analysis for financial data

Vertical vs Horizontal analysis. Should someone put more emphasize on one type over the other? These two methods are only two methods in an entire arsenal of ways of analyzing a company. Both have benefits and limitations. Everybody has discussed what they are and some have expressed their purposes. But, how can they be use

Two robotic machines are available to make the cell phone

Your company, which is financed entirely with common equity, plans to manufacture a new product, a cell phone that can be worn like a wristwatch. Two robotic machines are available to make the phone, Machine A and Machine B. The price per phone will be $250.00 regardless of which machine is used to make it. The fixed and vari


You have been approved for a $70,000 loan toward the purchase of a new home at 10% interest. The mortgage is for 30 years. How much are the approximately annual payments of the loan? Hint: Assume you pay yearly. $7425 $8690 $5740 None of the above First Choice Bank pays 9% APR compound

Calculating expected return, risk-free rate and more...

1. A stock has an expected return of 13 percent, its beta is 0.55, and the risk-free rate is 7.15 percent. What must the expected return on the market be? 2. You own a portfolio equally invested in a risk free asset and two stocks. If one of the stocks has a beta of 1 and the total portfolio is equally as risky as the market,