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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

Calculating After-Tax WACC: Example Problem

A company is 40% financed by risk-free debt. The interest rate is 10%, the expected market risk premium is 8%, and the beta of the company's stock is .5. What is the company cost of capital? What is the after-tax WACC, assuming that the company pays tax at a 35% rate?


CBS bond with a par value of $1,000, an interest rate of 7.625 percent, and a maturity of 10 years The bond is selling for $986. Alabama Power Company preferred stock with a $50 par value and a dividend of $2.8125 per 61 year. The stock is currently trading at $39 per share. Emerson Electric common stock that is selling fo

Memo recommending financial mix of debt and equity

Write a brief memorandum addressed to the instructor that discusses how your company (project company) is financed. Discuss the mix of debt and equity financing. Additionally, discuss what type and mix and financing would you recommend for your company. Provide your reasoning for your recommendations.

Campbell Company's Capital Budgeting Cash Flows

The Campbell Company is evaluating the proposed acquisition of a new milling machine. The machine's base price is $108,000, and it would cost another $12,500 to modify it for special use. The machine fall into the MACRS 3-year class, and it would be sold after 3 years for $65,000. The machine would require an increase in net wor

Expected Rate of Return on Treasury Security

My real risk-free rate is 3.50%, average future inflation rate is 2.25%, and a maturity premium of 0.10% per year to maturity applies, i.e., MRP = 0.10%(t), where t is the years to maturity. What is the rate of return I should expect on a 5-year Treasury security, assuming the pure expectations theory is not valid? No