Explore BrainMass


1.2 Practice problems

On September 30, 2009, Webster Co.'s treasurer signed a note promising to pay $520,000 on December 31, 2009. Proceeds of the note were $501,800. (a.) Calculate the discount rate used by the lender. (b.) Calculate the effective interest rate on the loan. (c.) How much interest expense would be recorded for the month of Octobe

Multiple Choice Questions - finance practice quiz

25. A common size income statement: a. uses the same dollar amount of revenues for each year. b. expresses items as a percentage of revenues. c. makes comparisons between years more difficult. d. is useful in estimating the impact of inflation. 26. Which of the following is(are) an example of a measure of leverage?

Multiple Choice Questions - finance (securities, auditors and more)

19. Firms that issue registered securities are required to file, with the SEC on an annual basis, which of the following? a. An annual report. b. A prospectus. c. A form 10-K. d. A set of financial statements. e. All of these. 20. Management's statement of responsibility: a. usually refers to the company's syst

Multiple Choice Questions - finance (earnings per share, cash flows and more)

14. The earnings per share of common stock calculation: a. is made by dividing net income by the number of shares of common stock outstanding at the end of the year. b. is complicated by the declaration of cash dividends during the year. c. includes gains or losses from treasury stock transactions. d. is complicated by t

Multiple Choice Questions - finance

When common stock has a par value: a. the liability of the stockholders is limited to the par value. b. there will probably be additional paid-in capital in the balance sheet. c. the market value of the stock will be higher than if there is no par value. d. the paid-in capital will equal the par value of the number o

Multiple Choice Questions - finance practice quiz

If the market price of a bond exceeds its face amount: a. the coupon rate is less than the market interest rate. b. the coupon rate is more than the market interest rate. c. the company's ROI and working capital have been increasing over time. d. the maturity rate has been declining. The amortization of bond discount:

Finance: Portfolio weighting, After tax cash flows, Systematic risk

14. You own a portfolio that consists of $8,000 in stock A, $4,600 in stock B, $13,000 in stock C, and $5,500 in stock D. What is the portfolio weight of stock A? A. 14.79 percent B. 15.91 percent C. 18.42 percent D. 19.07 percent E. 25.72 percent 10. Assume a project has e

Transactions, Company's Income Statement

1: Listed below are transactions or items that are frequently reported in financial statements. 1. Income effect due to changing from the double-declining-balance method to the straight-line method of depreciation. 2. Collection of accounts receivable. 3. Purchase of an insurance policy on December 31 that provides coverage

Build a business outline for Wal-Mart

Please help me in bulding an outline about Wal-Mart company with citations and references. The following points are important: 1-brief description of the company 2-description of firm's budgeting process 3-management accounting information system 4-costing process 5-capital decision, capital acquisition and structure 6

Computing the Market Value of a Bond

Heinz Corporation bonds carry a coupon of 8% and will mature in 5 years at $1,000. Newly issued 5-year bonds with similar characteristics are yielding 4%. Calculate today's market price of the Heinz bond. Compute your answer, submit all your work, and then answer the following questions. 14. What is the discount rate you used

Which of the following is true regarding float?

A. Checks written by a firm generate collection float B. checks received by firm create disbursement float C. In general, a firm's disbursement activities and its collection activities generate float D. A firms float is negative when its available balance equals its book balance E. A firm cannot exploit float by using the ca

Intrinsic value of industry

The Home Appliance Industry had free cash flow to equity (FCFE) of $87 for the year ending December 31, 2007. The industry anticipates a growth rate of 8% for the next three years due to favorable economic conditions. However the growth rate is expected to decline to 4% after three years and remain at that level indefinetly. The

Earnings multiplier model to calculate expected price

You are provided the following information about Javier Corporation. Sales for the year 2004 were $500,000: the Net Profit Margin (NPM) was 15%. Analysts project sales to grow by 12% next year (that is 2005).However because of more competition, the NPM is expected to decline by 10% for the year 2004. The expected P/E multiple fo

Purchase of Fixed Assets for Cash

1. Consider the current asset accounts (cash, accounts, receivable and inventory) individually and as a group. What impact will the following transactions have on each account and current assets in total (Increase, Decrease, No change)? (Hint: Each transaction has two sides that are equal in amount but opposite in sign. Consider

Cost of bank loan

15.9 Cost of bank loan Data Back-Up Systems has obtained a $10,000, 90-day bank loan at an annual interest rate of 15%, payable at maturity. (Note: Assume a 365-day year.) a. How much interest (in dollars) will the firm pay on the 90-day loan? b. Find the effective 90-day rate on the loan. c. Annualize your result in p

Personal Finance Investing Bonds

Summarize the concept of investing in bonds. include a definition of what kind of investment a bond is, how bonds are bought and sold, how bond prices are affected by interest rate fluctuations, and what type of investors are best suited for investing in bonds, and what expectations they should have. Be sure to include a brief a

Personal Finance

Summarize the concept of investing in stocks. Include a definition of what kind of investment the purchase of a stock is, how stocks are bought and sold in primary and secondary markets, what determines prices, and what type of investors are best suited for stock market investing. Be sure to include a description of how the stoc

Biases Situations Associates

Which one of the following biases best applies to this situation where one associates A with being better than B? An article just appeared in a respected journal that attributes behavioral biases to mispricing of different classes of common stock. For instance, the authors suggest that if class B shares of common stock have b


Company ABC has expected sales of 12,000 units this year, an ordering cost of $6 per order and carrying costs of $1.60 per unit. What is the average inventory? 310 units 300 units 150 units 155 units None of the above 9.The operating cycle begins when _____ and ends when___

Valuation Process and Acquisition Process

There is both an Acquisition Process and Valuation Process that an organization will undertake. Please Describe the valuation process in detail and secondly, compare and contrast the business valuation approaches. Identify the potential strengths and weaknesses that may exist for each approach

Stock Value and Predicted Return: Tom and Joe's Company

On January 1st, Joe's Company began to show serious interest in Toms Company. Joe's was trading at $52/ share with a beta of 1.02 and Tom's stock was trading at $28/ share with a Beta of .93. The S&P 500 had a return of 14.875 as of December 31st. On March 31st, Joe's was trading $50/ share and Tom's was trading for $31/ shar

Cost Cutting Measures

After reviewing all the cost cutting measures I anticipate I could cut back and save approximately $15000 a year if I put those measures into practice. Some of the cost cutting measures would not be hard to do because I do not smoke and I make my own coffee at home. However, I do love my shoes and I love to pamper myself with

Current & Future Trends in Financial Services

Please help with the following problem. SUBJECT: The Future of the Financial System and Trends in the Money and Capital Markets QUESTION: If you were managing a small bank or insurance agency in your local community, what current and future trends in financial services and institutions would likely have the greatest impac

Finanace - Impact on Shareholders

Please help with the following problem. Currently a firm has $1 million in 10% debt. The firm also has 50,000 shares outstanding that sell for $40 each. The firm used the $1.0 million to repurchase stock, as they previously were an all equity firm. Three states of the economy are possible: a slump under which the firm would

Calculating Net investment: Airstat Example

Airstat is replacing an old stamping line that cost $80,000 five years ago, with a new, more efficient machine that will cost $225,000. Shipping and installation will cost an additional $20,000. The old machine has a book value of $15,000 but will be sold as scrap for $5,000. The new machine will be depreciated with a 7 year lif