Explore BrainMass

Explore BrainMass

    Finance

    BrainMass Solutions Available for Instant Download

    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?

    Finance

    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

    Financial Review: 75 multiple choice questions

    See attached file also. Please provide answers and a brief explanation. 1. Which of the following is not a product cost? a. The cost of commissions paid to sales staff b. The cost of ordering production supplies c. The cost of rent of the manufacturing facility d. (a) and (c) 2. Dave Wilburn is a stockbroker. I

    Opening a branch

    King, Inc., a successful Midwest firm, is considering opening a branch office on the west coast. Under normal economic conditions, with a 45% probability of occurring, King can expect to earn a net income of $50,000 per year. In a mini-recession, at 25% probability, King will earn $20,000. In a severe recession, at a 20% probabi

    Calculate current price per share for Cali Corporation

    Calculate the current price per share for Cali Corporation Sales = 10,000 units Sales price per unit = $12 Variable cost per unit = $6 Fixed costs = $10,000 Long-term debt = $15,000 Interest rate on long-term debt = 8% Tax rate = 40% Dividend payout ratio = 60% Expected long-term growth rate = 8% Shares of common sto

    Finance - Interest rate and present value.

    1. At an interest rate of 12%, the six-year discount factor is .507. How many dollars is $.507 worth in six years if invested at 12%? 2. If the PV of $139 is $125, what is the discount factor? 3. If the cost of capital is 9%, what is the PV of $374 paid in year 9? 4. A project produces a cash flow of $432 in year 1, $13

    Calculate income from operations; changes in estimates

    PRACTICE 8 Prepare an Income Statement to determine Income from continuing operations and below the line: a) extraordinary loss ($100 tax) and b) loss in discontinued operations ($120 tax). (PRACTICE 8) COMPUTATION OF INCOME FROM CONTINUING OPERATIONS Sales $12,000 Cost of goods sold 5,000

    Johnson Industries: What is the project's initial investment outlay?

    Johnson Industries is considering an expansion project. The necessary equipment could be purchased for $9 million, and the project would also require an initial $3 million investment in net operating working capital. The company's tax rate is 40%. What is the project's initial investment outlay?

    Relationship of Financial Markets and Institutions

    The recent economic difficulties in the United States are often linked to financial markets and institutions. This raises the question, what is the relationship between financial markets, financial institutions and macroeconomic performance of the economy?