The Harrington Corporation is considering a change in its cash-only policy. The new terms would be net one period. The required return is 2.5 percent per period. Based on the following information, what is the break-even price per unit that should be charged under the new credit policy? (Do not round intermediate calculations an
Why do you think it is important for financial managers to focus on establishing the right capital structure for their firms?
JOURNAL ENTRIES FOR FRESH MARKET, INC. The following transactions occurred for Fresh Market, Inc. for the quarter ended March 31, 2010: · Total sales were $ 484,500 - 20% were on account. · Of those sales on account, 95% were collected by the end of the quarter.
1) What did classical economists assume about flexibility of prices, wages and interest rates? What did this assumption imply about the self correcting tendencies in an economy recession? What disagreements did Keynes have with classical economists? (evolution of fiscal policy) 2) Increased government purchases with taxes held
1) (arguments for trade restrictions) Explain the national defense, declining industries, and infant industry arguments for protecting a domestic industry from international competition. 2) (arguments for trade restrictions) Firms hurt by lower priced imports typically argue that restricting trade will save U.S jobs. What is
Explain why the required rate of return on a firm's assets must be equal to the weighted average cost of capital associated with its liabilities and equity. Explain.
4) (Consumption function) How would an increase in each of the following affect the consumption function? a. net taxes b. the interest rate c. consumer optimism or confidence d the price level e. consumers net wealth f. disposable income 9) (simple spending mult
** describe the major sources of income and expenditures for households... in question 1** 1) (Evolution of the household) Determine whether each of the following would increase or decrease the opportunity costs for mothers who choose not to work outside the home. Explain your answers... a. higher levels of educatio
1. You're the treasurer of Warm Wear Inc., which imports wool sweaters from around the world. Kreploc, a company in the country of Slobodia, has a product your marketing department would like to carry and doesn't require payment until 90 days after delivery. Unfortunately, the Slobodian blivit tends to vary in value by as much a
Do you agree or disagree with the following statement: "We can calculate future cash flows precisely and obtain an exact value for the NPV of an investment." Explain.
You're the CFO of the Overseas Sprocket Company, which imports a great deal of product from Europe and the Far East and is continually faced with exchange rate exposure on unfilled contracts. Harry Byrite, the head of purchasing, has a plan to avoid exchange rate losses. He suggests that the firm borrow enough money from the ban
1. Describe the ways in which international business has changed during the last 50 years. Include the concept of an MNC and the different types of foreign investment. 2. After World War II, the United States was the world's dominant economic power. We're still the largest economy, but the rest of the world has caught up sig
What is the future value of investing $3,000 for 3/4 year at a continuously compounded rate of 12%?
Wilson's Antiques is considering a project that has an initial cost today of $10,000. The project has a two-year life with cash inflows of $6,500 a year. Should Wilson's decide to wait one year to commence this project, the initial cost will increase by 5% and the cash inflows will increase to $7,500 a year. What is the value of
Dental Delights has two divisions. Division A has a profit of $200,000 on sales of $4,000,000. Division B is only able to make $30,000 on sales of $480,000. Based on the profit margins (returns on sales), which division is superior?
Conestoga Ltd. has the following estimated probability distribution of returns. Return Probability 4% .20 12 .50 14 .30 Calculate Conestoga's expected return, the variance and standard deviation of its expected return, and the return's coefficient of variation.
Expected and Required Returns, Equation 9.2 (page 399) k=D1 + (P1 - P0)/P0 The Duncan Company's stock is currently selling for $ 15. People generally expect its price to rise to $ 18 by the end of next year. They also expect that it will pay a dividend of $. 50 per share during the year. (Hint: Apply Equation 9.2 page 399).
If interest rates are expected to increase, should investors look to long-term bonds or short-term securities? Explain in your own words
Why is it important that physical assumptions precede financial results in the planning process? For example, what's wrong with assuming you want a business that sells $ 50 million a year earning a profit of $ 5 million, and then building a revenue and cost plan to fit those goals?
Answer these problems and show your work: 1. Calculate the present value of the following lump sums: a. $100,000 to be received five years from now with a 5% annual interest rate b. $200,000 to be received 10 years from now with a 10% annual interest rate 2. Calculate the future value of the following lump sums: a. $100
Please see attachment for questions on finance regarding investment decisions.
Pam, 43 Josh, 45 Children ages 16, 14, and 11 Monthly income $4,900 Living expenses $4,450 Emergency fund $5,000 Assets $262,700 Liabilities $84,600 With three dependent children, the Brocks are assessing t
1.8 For a given share price of a firm's stock, the lower the EPS the lower the price-earnings ratio. true or false? 1.9 Cash flows from operating activities relate to the buying and selling of long-term assets. true or false? 1.11 Growth rate: Petry Corp. is a growing company with sales of $1.25 million this ye
Edwards Enterprises follows a moderate current asset investment policy, but it is now considering a change, perhaps to a restricted or maybe to a relaxed policy. The firm's annual sales are $400,000; its fixed assets are $100,000; its target capital structure calls for 50% debt and 50% equity; its EBIT is $35,000; the interest r
Consider the following information and then calculate the required rate of return for the Global Investment Fund, which holds 4 stocks. The market's required rate of return is 13.25%, the risk-free rate is 7.00%, and the Fund's assets are as follows: Stock Investment Beta A $200,000 1.50 B $300,000 -0.
Reply to the following: In choosing a particular project, there is a lot of financial planning that must take place. In the Marine Corps, we also use a planning process in developing plans for appropriate action. This process consists of six parts: problem framing, the course of action development, the course of action war-
Jamie Peters invested $100,000 to set up the following portfolio 1 year ago. (see attachment for table). a. Calculate the portfolio beta on the basis of the original cost figures. b. Calculate the percentage return of each asset in the portfolio for the year/ c. Calculate the percentage return of the portfolio on the basis of
Dillon Labs has asked its financial manager to measure the cost of each specific type of capital as well as the weighted average cost of capital. The weighted average cost is to be measured by using the following weights: 40% long-term debt, 10% preferred stock, and 50% common stock equity (retained earnings, new common stock, o
Choose a company, a product/service that a company would launch, and a specific geographic area to do that. Develop a Marketing Plan. Develop the situational analysis, the market analysis, competition analysis and SWOT matrix.
The market value of Fords' equity, preferred stock and debt are $7 billion, $3 billion, and $10 billion, respectively. Ford has a beta of 1.8, the market risk premium is 7%, and the risk-free rate of interest is 4%. Ford's preferred stock pays a dividend of $3.5 each year and trades at a price of $27 per share. Ford's debt trade