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Calculations for corporate finance questions

Corporate Finance 1. You have recently been hired as the new bookstore manager for Wilmington University and you are in the process of ordering, guess what? Textbooks! Cengage Learning (a company that is taking over the textbook business) will send you the texts with these terms: net 30 days. Looking at old inventory report

The Risk and Return on Stock and Bonds

Explain the historical relationships between risk and return for common stocks versus corporate bonds. Explain the manner in which diversification helps risk reduction in the portfolio. Support the response with actual data. Usually, the higher the risk on an asset, the greater the return or potential for loss. Take stocks fo

Sharpe Razor Company Exercise

Sharpe Razor Company has total assets of $2,500,000 and current assets of $1,000,000. It turns over its fixed assets. 5 times a year and has $700,000 of debt. Its return on sales is 3 percent. What is Sharpe's return on stockholders' equity?

The Bank of Nova Scotia

1. Provide a brief but concise introduction of Bank Of Nova Scotia including: - Corporate history - Industry - Primary Competitors - Primary Products and/or Services 2. Include a financial analysis of the company using ratios relevant to your company and industry. (These ratios must be accompanied by commentary expl

Inventory Turnover, Flotations Costs, and Equity Financing

1. Why would an inventory turnover ratio be more important for a retailer than a consulting firm? 2. Describe the various flotation costs from issuing stock. How do those flotation costs compare to those from issuing bonds? 3. What signals are provided to investors when a company obtains equity financing? What signals are

Calculations

1. Cross Rates Suppose the exchange rate between U.S. dollars and the Swiss franc is SFr1.5 = $1, and the exchange rate between the dollar and the British pound is £1 = $1.40. What then is the cross rate between francs and pounds? Round your answer to two decimal places. 2. Effective Cost of Trade Credit The D.J. Masson C

Create cash flow from financial statements

AC1420 Exercise 4.2 The following calculations will be based on the income statement and the balance sheet provided: The net cash flow from operating activities The net cash flow from investing activities The net cash flow from financing activities Comparative Balance Sheet for the Years 2009 and 2010 12/31/

Stock Split, Residual Distribution, and External Equity

1. Stock Split Suppose you own 4,000 common shares of Laurence Incorporated. The EPS is $8.00, the DPS is $4.75, and the stock sells for $65 per share. Laurence announces a 2-for-1 split. Immediately after the split, how many shares will you have? What will the adjusted EPS and DPS be? Round your answers to the nearest cent

Full disclosure principle in financial reporting

Requires about 250 words for this complete discussion with good example. Examine the full disclosure principle in financial reporting and discuss why it is important and how should it be used in financial reporting. Choose an example of poor accounting practices and identify the consequences of not following the full disclosu

Calculating Margin of Safety

Swimkids is a swimsuit manufacturer. They sell swim suits at a selling price is $30 per unit. Swimkids variable costs are $18 per unit. Fixed costs are $86,500. Swimkids expects sales of $265,300 next year. What is Swimkids's margin of safety?

Kraft: Capital Budgeting

Every company has capital projects. Identify one new acquisition your company may need. What are some issues you are going to have in estimating the cash flow for your new acquisition? Might this be caused from the initial investment and problems in getting it funded? Issues you might raise may include risks, costs, politics

Manufacturing Costs and Breaking Even

U.S. Telephone Cellular sells phones for $100. The unit variable cost per phone is $50 plus a selling commission of 10% (based on the unit sales price per phone). Fixed manufacturing costs total $1,300 per month, while fixed selling and administrative costs total $2,320. How many phones must be sold to achieve the break even poi

Relationship of Variable Cost and Incremental Profit

Bubba's Steakhouse has budgeted the following costs for a month in which 1,600 steak dinners will be produced and sold: Materials, $4,080; hourly labor (variable), $5,200; rent (fixed), $1,650; depreciation, $790; and other fixed costs, $460. Each steak dinner sells for $13.30 each. How much would Shula's profit increase if 10 m

Allocation Cost Based on Activity Based Costing

A law firm uses activity-based pricing. The company's activity pools are as follows: Cost Pool Annual Estimated Cost Cost Driver Annual Driver Quantity Consultation: 200,000 Number of Consultations: 100 consultations Administrative Costs: 150,000 Admin Labor Hours: 10,000 labor hours Client Service: 99,000 Numb

The Net Advantage or Disadvantage of Reworking Keyboards

The Manassas Company has 55 obsolete keyboards that are carried in inventory at a cost of $9,600. If these keyboards are upgraded at a cost of $7,400, they could be sold for $19,300. Alternatively, the keyboards could be sold "as is" for $8,900. What is the net advantage or disadvantage of reworking the keyboards?

IBM Current Ratios, Quick Ratios, and Debt to Equity Ratios

1. Identify two publicly traded corporations in the same industry and compare and contrast their current ratios, quick ratios, and debt to equity ratios. Explain what these ratios mean and how they help understand the differences between the two companies.

TVM, Solve for PMT, Annual Percentage Rate, and Add on Interest

See the attached file. 1. Using the simple interest method, find the monthly payments on a $2,300 installment loan if the funds are borrowed for 18 months at an annual interest rate of 12%. Use financial calculator to answer the question. Round the answer to the nearest cent. a. $ ??? per month b. How much interest wi

Computation average tax rate

Average corporate tax rates. a. Calculate the tax liability, after-tax earnings, and average tax rates for the following levels of corporate earnings before taxes: $12,100, $81,700, $299,000, $1.4 million, $9.8 million, and $19.7 million. b. Plot the average tax rates (measured on the y-axis) against the pretax income levels

Time Value of money using excel

In the attachment below are questions I am having a hard time figuring out. Can you show your work (formulas) so that I understand how you came to the answers?

Creating a Macro

For this example, we will assume we are reconciling March 2009 sales. 1) Type 3/12/2009 into cell I16 of the Listings worksheet and press ENTER. This entry records the date of the sale of this item. 2) Select row 16 by clicking its row number heading. This is the row we will transfer to the SALES spreadsheet. 3) S

Net Present Value: Probability, Tax, Debt, Capital, and Equity

1. Possible net present values and associated probabilities for a new investment are as follows: NPV -1020 -800 80 450 550 800 Probability .15 .30 .20 .10 .10 .15 What is the expected value______________, median,______________ and mode _________________? 2. You have been given the job of

Computing the Maximum Price to Pay for a Merger Candidate

(Cash for Stock Merger) This problem requires that you integrate the material learned in prior chapters. You have been given the job of evaluating the following merger candidate. You have collected the following cash flow estimates for the acquisition candidate for the proposed merger (in millions): Year 1 2 3

Stock return, variance and standard deviation

The last four years of returns for a stock are as follows: Year 1: -4.5% Year 2: +27.7% Year 3: +11.9% Year 4: +4.2% a. What is the average annual return? b. What is the variance of the stock's returns? c. What is the standard deviation of the stock's returns? NOTE: Notice that the average return and standard deviati

Value of warrants

1. A company has warrants on the market that allows people who own it to buy 1 share price at cost $25. a. Calculate the value of the security warrants of the organization if the common shares are sold each at the following rates: (1) $ 20, (2) $ 25, (3) $ 30), (4) $ 100. (NOTE: The value of executing a warrant is the differ

Computing the Expected Net Present Value

Athens Development Corporation is considering a new product that will be sensitive to both economic conditions and competitor response. The product manager has decided to focus on three economic conditions: weak economy, normal economy, and strong economy. Competitors either will or will not respond with a competitive product,