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Debt Ratio, Maturity Risk Premium and Time Value of Money

1. Suppose the following relationships for the Dawn Corporation: Sales/total assets= 10x Return on assets= 15% Return on equity= 25% What is the real risk free rate for 3-month if the inflation for 3 months is estimated as 4%? What is Dawn's debt ratio? 2. Suppose the following data on yields from holds: 3-month T-Bi

Finance Questions: Discount Rate

1. What is the present value of $1,250 due in 10 years at a 7% discount rate? 2. Suppose an index of small firm stocks started in 1946 at 10, and the index level was 1890.59 in 2001. What is the capital gains yield of the small firm stocks for the period? 3. Suppose the following relationships for the Dawn Corporation:

Finance Questions: Cash Flows

1. If a company's inventory turnover ratio is 24, how long is the firm's inventory conversion period if you use a 360-day year? 2. To finish college, you need $18,000 per year for 4 years, starting next year (that is, you will need to withdraw $18,000 one year from today). A relative offers to pay the expense by depositing in

Evaluate the Financial Heath of Wal-Mart

For the final project, you will evaluate the financial health of a Wal-Mart. Write a 750- to 1,000-word paper in APA format and create a PowerPoint® presentation that summarizes your evaluation. Prior to writing the paper, you will need to research your chosen company and conduct an industry comparison to determine how your com

Revenue trends

(attached is the company I analyzed in Week 3) (The Question that needs to be answered) - Look back at the company you analyzed for revenue trends in Week Three. Now, assume there is a 50% chance that the revenue is what you predicted in Week Three, a 30% chance that it is the same as last year, and a 20% chance that it is lo

Ricardian model of comparative advantage: 1975 South Korea production wage levels

In 1975, wage levels in South Korea were roughly 5% of those in the United States. It is obvious that if the United States had allowed Korean goods to be freely imported into the United States at that time, this would have caused devastation to the standard of living in the United States because no producer in this country could

Geoff's Golf Clubs: degree of financial leverage; breakeven point

Problem Set 5 Please answer the following questions in the space provided. You may insert additional lines as necessary in order to complete your response fully. 1. Geoff's Golf Clubs is considering purchasing a small firm in the same line of business. The purchase would be financed by the sale of common stock or a bond


Joe's Lawn Service has asked you to create various financial spreadsheets and a written memo to help him understand his finances for his business. Create an Excel spreadsheet with formulae to demonstrate the following examples. Be sure to clearly label each example by using a different spreadsheet tab: ·

Effective rate / EPS

1. John Fleming has been shopping for a loan to finance the purchase of a used car. He has found three possibilities that seem attractive and wishes to select the one with the lowest interest rate. The information available with respect to each of the three $5,000 loans is shown in the following table: Loans Principal Ann

Rate of return/project selection

Please see the attached file. 1. Your firm makes the most popular widgets for vacuum cleaners. Your operations manager has suggested that due to an economic slowdown, he could re-tool some of the widget machines so that rather than manufacturing widgets for vacuums, you could manufacture either airplane widgets or snow mobile

Financial Statements

On Your Mark is preparing to release its first Annual Stockholder Report since the company's recent initial public offering (IPO). The accounting department has already prepared and provided the financial statements and ratios (see below) for the most recent year. Now all the division managers are meeting to help create the writ

Stock price, Beating the Market & Market Efficiency

1. A stock market analyst is able to identify mispriced stocks by comparing the average price for the last 10 days to the average price for the last 60 days. If this is true, what do you know about the market? 2. What are the implications of the efficient market hypothesis for investors who buy and sell stocks in an attempt

Howton & Howton Worldwide: Additional Funds Needed (AFN)

Scenario: Howton & Howton Worldwide (HHW) is planning its operations for the coming year, and the CEO wants you to forecast the firm's additional funds needed (AFN). Data for use in the forecast are shown below. However, the CEO is concerned about the impact of a change in the payout ratio from the 10% that was used in the past

Major Types of Financial Intermediaries

Different financial institutions offer a variety of similar services, but with different levels of competence. What are some explanations for this? What are major types of financial intermediaries? How are they similar and different?

The Kranberry kids Kompany is in the volatile garment business.

The Kranberry kids Kompany is in the volatile garment business. The firm has annual revenues of $250 million and operates with a 30% gross margin on sales. Bad debt losses average 3% of revenues. Kramberry is contemplating an easing of its credit policy in an attempt to increase sales. The loosening would involve accepting a low

Questions on Cost-Plus Pricing, Profit, Maximizing Price, etc.

8-4 RoverPlus, a pet product superstore, is considering pricing a new RoverPlus labeled dog food. The company will buy the premium dog food from a company in Indiana that packs the product with a RoverPlus label. Rover pays $6 for a 50-pound bag delivered to its store. The company also sells Royal Dog food (under the royal dog f

Determine the economic conditions

Condition PRobability StockA Stock B Weak 10% 10.00% 17.00% Below Average 20% 18.50% (21.29%) Normal 40% 38.67% 44.25% Above Average 20% 14.33% 11.6

Cost amd break even (See attached)

1-14 thru 1-22 (See attached) 1-14 Gina Fox has started her own company, Foxy Shirts ... 1-15 Ray Bond sells handcrafted yard decorations ... 1-16 Ray Bond from problem 1-15 is trying to find a new supplier ... 1-17 Katherine D'Ann is planning to finance her college education ... 1-18 Katherine D'Ann fromproblem 1-17 has

Bonds, risk, ratios

1) A bond manager who wishes to hold the bond with the greatest potential volatility would be wise to hold a. short-term, high-coupon bonds. b. long-term, low-coupon bonds c. long-term, zero-coupon bonds d. short-term, zero-coupon bonds e. short-term, low-coupon bonds 2) A financial institution can h

Corporate Finance Questions

1. A firm's balance sheet shows current assets of $95, net fixed assets of $250, long-term debt of $40, and owners equity of $200. What is the value of the firm's current liabilities if that is the only remaining balance sheet item? A) -$ 50 B) $ 50 C) $105 D) $145 E) $545 2. Calculate net income u


1. For a typical business, what are some external variables that influence the reversion rate? 2. What action can management take to exploit an overpriced share price of the corporation? 3. What action can management take to exploit an under-priced share price of the corporation? 4. What is one red flag in

Loras Corp: Real Cost of Hedging Payables for New Zealand imported goods

Real Cost of Hedging Payables Assume that Loras Corp imported goods from New Zealand and needs 100,000 New Zealand dollars 180 days from now. It is trying to determine whether to hedge this position. Loras has developed the following probability distribution for the New Zealand dollar: Possible Value of New Zealand Dolla

Explain business plans, sources of finance, and market identification.

As a veteran entrepreneur, you have been asked from Zach Johnson, a recently new entrepreneur, the following questions: * What advice would you offer to Zach who is interested in expanding his current business and launching a global business effort? * Explain the statement "For each benefit gained by regulation, ther

Price Analysis

(5). Which of the following is not a common source of prices for a price analysis? (a). Catalog prices, (b). Internet prices, (c). The grapevine, (d). Independent cost estimates. (6). Which of the following is not a category of discounts? (a). Trade discounts, (b). Quantity discounts, (c). Credit card d

A man walks into a New York City bank and asks for a $5000

Here's an old story: A man walks into a New York City bank and asks for a $5000 loan, offering his Ferrari, worth $250,000 as collateral. He tells the loan officer that he needs the money for two weeks for an important venture. The loan officer, having the car as security and after checking references, gives the man the money he