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Hedge fund Fee & Assets

Suppose a hedge fund provides that the management fees are 1% of the total assets plus 20% of the profits annually. The gross returns on the fund are shown below. 2008 2009 2010 2011 2012 End-of year assets 125,000,000 ? ? ? ? Gross return

Finance practice exam problems

1) A company's stock sells at a P/E ratio of 21 times earnings. It is expected to pay dividends of $2 per share in each of the next five years and to generate an EPS of $5 in year 5. Using the "dividends-and-earnings model" and a 12% discount rate, compute the stock's justified price. 2) A particular company currently has

Economics: Practice Exam Questions

1. The real return is 10% and the expected rate of inflation is 4.5%. what is the nominal rate? 2. a company had sales of $1,250,000, cost of goods sold of $750,000 depreciation expenses of $250,000 and interest expenses of $50,000. If the company's tax rate is 34% and the income state is complete, what is this firm's opera

Sample Financial Information for Variable and Fixed Costs

Define Variable and Fixed Cots - For the variable cost, if the Unit price for service is $175 yen per hour justify variable cost associated with price which would include in this case probably only labor cost (for example, maybe 2 persons at 25 yen per person per hour? up to you!) For fixed costs, make it simple, show an annual

Investment with higher return

You are trying to choose between two different investments, both of which have up-front costs of $65,000. Investment M returns $135,000 in six years. Investment N returns $195,000 in 10 years. Which of these investments has a higher return? use formulas (not excel)

Discuss Annual Percent Change and rate of inflation for CPI index

Please see the attached file. Provide the correct short summaries to the following questions on annual percent change or rate of inflation figures. The following link will provides the applicable chart. http://www.minneapolisfed.org/community_education/teacher/calc/hist1800.cfm The price level starts at 50 in 1800.

For each of the loan programs under the Small Business Administration, discuss the advantages and disadvantages of each in terms of the complexity of application and protection in the event of a default.

Discuss what are the advantages and disadvantages of each of the following programs in terms of complexity of application and protection in the event of a default: a) Basic micro loan program. b) Basic 7(a) loan program. c) Patriot loan program. Note that, these programs are all a part of the Small Business Administratio

Federal Reserve Policy's

Describe the differences and similarities of the conduct of Chairman Greenspan and Bernanke in managing the Fed policy? about 150 words, two references

Finance: solve for stock price's

A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for this stock is 7%, and if investors require a(n) 11% rate of return, what is the price of the stock?

Healthcare finance, cost-volume-profit, management accounting

Consider the CVP graphs below for two providers operating in a fee-for-service environment: see attached file a. Assuming the graphs are drawn to the same scale, which provider has the greater fixed costs? The greater variable cost rate? The greater per unit revenue? b.Which provider has the greater contribution margin? c.

Comment by Walker of Herman-Miller: Inefficient Markets and Corporate Decisions

Consider the comments of Brian Walker, the president of Herman-Miller North America, who was quoted in the chapter as having said: 'For dot.coms, it appears that the market has implicitly capitalized a lot of those costs. The market views their negative earnings as investments in the future. It's more difficult for a traditional

Calculating the market value of firm's common equity

Assume a firm has been growing at a 15 percent annual rate and is expected to continue to do so for 3 more years. At that time, growth is expected to slow to a constant 4 percent rate. The firm maintains a 30 percent payout ratio, and this year's retained earnings were $1.4 million. The firm's beta is 1.25, the risk-free rate is

East Coast Yachts: Diversification

Considering the effects of diversification, how should Sarah respond to the suggestion that you invest 100 percent of your 401(k) account in East Coast Yachts stock?

Calculating AFN: Forecast Baxter's additional funds needed for the upcoming year.

Baxter Video Product's sales are expected to increase by 20% from $5 million in 2010 to $6 million in 2011. Its assets totaled $3 million at the end of 2010. Baxter is already a full capacity, so its assets must grow at the same rate as projected sales. At the end of 2010, current liabilities were $1 million, consisting of $25

Present Value and Future Value

1.A)The formula to calculate the value of $1 put into savings today is fv = pv*((1+i)^n). The variables are: fv = future value pv = present value i = interest rate per period n = the number of periods - an exponent in the formula a. What does the exponent in this case state that you need to do mathematically to th

Measurement of Money Continous and Discrete

Money would be discrete because it has a limit on the lower end, a penny (which cannot be subdivided) and on the upper end dependent upon the highest bill a country produces. Please go to your Excel type in $87.00, (or any $ amount) now go to Format cell, and select accounting. I found that it allowed me put in as many as 30 ze

Capital Budgeting Question: Gas Extraction

Outline: Primitive Energy owns a coal seam gas reserve in south-west Queensland. Management is currently examining the economic viability of two gas extraction processes from which it can choose. Task is to prepare a report that advises management of Primitive Energy on the optimal extraction process. This report must include

Public Financing: Cost-Benefit Analysis to Motorists

Suppose a proposed new road to be constructed between two cities will lower the average cost per trip by car from $5 to $4. Currently, 500,000 trips are made between the two cities per year. An estimate indicates that, all other things being equal, the new road will increase the number of trips per year to 600,000. Calculate the

Basics of Corporate Finance

True or False? Briefly explain in about 100-200 words. a) The fact that firms so heavily rely on their internal capital market as a source of financing is strong evidence that internal markets are more efficient than external markets. b) When underwriting equity or bond issues, investment banks are merely acting as

Challenges and Opportunities Arising from Financial Crisis

1. Discuss the major challenges and opportunities arising from the global financial crisis. 2. Discuss the major factors behind the collapse of the U.S. mortgage markets. What role, if any, did financial innovation play in the collapse of the mortgage market that began in the summer of 2007? Also, evaluate the Federal Reserve's

Preemptive price reductions

A competitor of your pharmaceutical company is about to launch a product that will challenge one of your very profitable medications. At a marketing strategy meeting, one colleague recommends a preemptive price reduction to maintain market share. Discuss the pros and cons of this suggestion.

Effective interest/CCC/payable days

Problem 1 Company A purchases goods from its supplier on terms of 2/10, net 40. The effective annual cost to Company A if it chooses not to take advantage of the trade discount offered and stretches the accounts payable to 60 days is closest to: What is the EAR, effective annual rate? Problem 2 Company A had sales of $980 m

Walnut Corporation: Contribution margin per each desk produced.

Walnut Corporation sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials $195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The contribution margin per desk is _____.

Excessive Optimism and Overconfidence

Consider the contention that excessive optimism and overconfidence are important characteristics of leadership. Might these traits help managers initiate and complete daunting projects that they would otherwise reject or abandon? Discuss this contention.

Compute amortization expense given a change

Dade purchased a patent on January 1, 2003 for $120,000. The patent had a remaining useful life of 10 years at that date. In January 2004, Dade successfully defends the patent at a cost of $54,000, extending the patent's life is 12/31/15. a.)$12,000 b.)$13,500 c.)$14,500 d.)$18,000

General Mills highest variable cost; Eastman Kodak contribution margin

Variable Cost to Break Even General Mills makes Wheaties, Cheerios, Betty Crocker cake mixes, and many other food products. Suppose the product manager of a new General Mills cereal has determined that the appropriate wholesale price for a carton of the cereal is $48. Fixed costs of the production and marketing of the cer