Share
Explore BrainMass

Finance

Construct both a price weighted and value weighted index

You have decided to construct your own index to measure consumer confidence. You have chosen the following three companies Wal-Mart Stores Inc (WMT), Target Corp (TGT) and Kroger Co. (KR). Using monthly prices from August 2008 through August 2010, Construct both a price weighted and value weighted index. Use a beginning index o

Modigliani-Miller Proof

Consider a Modigliani-Miller world with no taxes. In this world, consider a firm which is expected to generate constant cash flows in perpetuity. For this firm VU = VL = D+S and ks = k0 + (D/S)(k0 - kd). Now, assume that suddenly, a corporate tax at a rate T is imposed on the firm. Nothing else changes (i.e. the value of debt

Residual income model; correlation between stocks; expected price of stock

See attached file full problems. Question # 1 Apply the residual income model to determine the intrinsic value of the stock for a firm with the financial data shown in this table. Question #2 Calculate the correlation between Stock A and Stock B. Question #3 A stock just paid a dividend of $2.00. Due to t

Excel Quantitative Methods: Example Problem

Comfortable Hands is a company that features a product line of winter gloves for the entire family â?" men, women, and children. They are trying to decide what mix of these three types of gloves to produce. Comfortable Hand's manufacturing labor force is unionized. Each full-time employee works a 40-hour week. In addition,

Minimum Cost Schedule

Can you help me get started with this project? A restaurant operates with two full-time employees who work 8 hours per day. The rest of the employees are part-time employees who are scheduled for 4 hours shifts. On Saturdays the restaurant is open 11:00 A.M. to 10:00 P.M. Management wants to develop a schedule for part-time e

Finance

1- Excalibur corporation has developed a model to predict sales revenues for its line of beach towels and swimwear based on long-range weather forecasts. The probability of means temperature and related sales of product line units are as indicated below: Unit sales Temperature Probability 10,000 75-79

Point to Determine When to Close Down

In deciding whether to start a new business, explain fully which factors you would include in your business plan? Assuming you open the business, at what point would you deem the business venture successful? At what point would you decide to close down if you were losing money?

Life insurance policy - received payments

You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. You can earn 6 percent on your money. Which option should you take and why? Ques

Evaluate Walmart's Financial Performance During the Past 2 Years

Evaluate Wal-Mart's financial performance during the past 2 years, using financial ratios. Calculate the ratios for each year: Current Debt Return on equity Average Collection Period Discuss the trend for each ratio and what it tells you about the organization's financial health.

An Analysis of the Financial Ratios for PepsiCo, Inc.

Data from Consolidated Statement of Income (page 60), Consolidated Statement of Cash Flows (page 61) and the Consolidated Balance Sheet (page 62) of the 2009 PepsiCo Annual Report and was used to determine that following ratios for both year 2009 and 2008 Please note that the numbers are in millions: 1. Current Ratio T

Prepayment risk & collateralized mortgage obligations

What is prepayment risk and how does it apply to collateralized mortgage obligations and other forms of securitized mortgages? What innovations has the mortgage lending industry developed to deal with prepayment risk?

Excel problem for Alice Barr Realty housing sale data.

You are an intern with the Regional Realty Service and are analyzing the claim made by Alice Barr Realty that "we get your price." You have prepared a spreadsheet that shows data relating to three months' sales by Alice Barr Realty. You are going to determine the percent of asking price for each home sold that month. Determiine

Finance: 5 multiple choice questions

(1) Suppose you have an investment that pays $75 at the end of the year for each of the next five. If your opportunity cost of money is 12%, how much is the investment worth? A) $270.36 B) $375.00 C) $132.18 D) $250.71 (2) In computing the terminal value on a piece of equipment that will be disposed of in 5 years,

Finance: Expected Rate of Return for Investment Scenarios

What is the expected rate of return for an investment that has the following expected scenario? If there is an 18% probability of a recession, 2.0% return; if there is a 65% probability of a moderate economy, 9.5% return; if there is a 17% probability of a strong economy, 14.2% return.

Financial Management - NPV

calculations must be shown in excel 1) Continuous Compounding: Compute the future value of $1,900 continuously compounded for: a: 5 years at a stated annual interest rate of 12 percent. b. 3 years at a stated annual interest rate of 10 percent. c. 10 years at a stated annual interest rate of 5 percent. d. 8 years at a s

Liability Insurance, Insurers, Profits

1. Suppose that a liability insurance policy with a coverage limit of $100,000 (i.e., the insurer will pay liability claims up to $100,000) has a premium of $600. For each of the following people, what is the premium per dollar of personal wealth protected if the policy were purchased? Person Person's Wealth Mary $ 5,000 Curly

Margin questions

Use the information below for the following 2 problems **************************** You decide to sell 100 shares of Davis Industries short when it is selling at its yearly high of 32 1/4. Your broker tells you that your margin requirement is 55 percent and that the commission on the sale is $55. While you are short, Davis pay

Purchasing Stock on Margin

Use the information below for the following 3 problems. Thanks for your help! *************************** 1. Jackie has a margin account with a balance of $45,000. If initial margin requirements are 50 percent and Turtle Industries is currently selling at $50 per share: How many shares of Turtle can Jackie purchase? a. 1,800

Operating leverage and combined leverage

Degree of operating leverage? Degree of Combined leverage: Sales: 440,000 TVC: 240,000 Fixed Costs: 96,000 EBIT: 104,000 Interest 19200 EBT 84800 Tax at 35% 29680 net Income 55120 Shares outstanding: 16000 EPS

Arithmetic Average, Standard Deviation and Returns

Calculate the arithmetic average, the geometric average, the variance and standard deviation For the S&P 500 index for the decade of 1980-1990. Do the same calculations for the S&P 500 index for 2000-2010. Compare and contrast your answers and provide explanations for the similarities and differences. Calculate the statistical

Description of Leverage Analysis and Break-Even Analysis

Please answer the following questions: 1. An analytical income statement for Detroit Heat Treating is shown below. It is based on an output (sales) level of 40,000 units. Sales $480,000 Variable costs _2_8__0_,_0_0_0 Revenue before fixed costs $200,000 Fixed costs _1_2__0_,_0_0_0 EBIT $ 80,000 Interest expense __3__0_

Business Finance Reasoning: Cash Flows and Capital Structure

Explain the reasoning behind the focus on cash flows rather than accounting profits in making our capital-budgeting decisions. Why are we interested only in incremental cash flows rather than total cash flows? If depreciation is not a cash flow item, why does it affect the level of cash flows from a project in any way? Wh

E 12-6

E 12-6 On February 18, 2011, Union Corporation purchased 10,000 shares of IBM common stock as a long-term investment at $60 per share. On December 31, 2011, and December 31, 2012, the market value of IBM stock is $58 and $61 per share, respectively. Required: 1.What is the appropriate reporting category for this invest

Contribution margin .

Use the formula stated: Contribution Margin = Revenue - Variable Costs (CM = R - VC) Your top two Agents ... Let's call them ... Agent J and Agent K, both bring in two "must do deals" with new extraterrestrial ah ... accounts. Agent J's is for $ 100,000 ... 50 units at sales price $2,000 per unit Agent K's is for $ 50,0

Microeconomics

a. What is the definition of price elasticity of demand? b. Explain the relationship between price elasticity and total revenue? How does price elasticity of demand affect a firmâ??s pricing decisions? c. How does the availability of substitutes affect price elasticity of demand? Provide examples. Pleas

Finance: Calculate EMC's value of operations

EMC Corporation has never paid a dividend. It's current free cash flow of $400,000 is expected to grow at a constant rate of 5%. The weighted average cost of capital is WACC = 12%. Calculate EMC'S value of operations.

Corporate Finance

Manyops, Inc., is a manufacturing firm that has experienced strong competition in its traditional business. Management is considering joining the trend to the "service economy" by eliminating its manufacturing operations and concentrating on providing specialized maintenance services to other manufacturers. Management of Manyop