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Decision Making: The Martha Stewart, ImClone Stock Scandel and Trial

Part I What reasons could Martha Stewart have had to: 1. Act upon the stock tip she receive by selling all her stock 2. Then lying to Federal Agents about it Part II What were the negative consequences of her actions? 1. How did it affect her business empire? 2. How did it affect her personal life? 3. In what oth

Springfield Bank is evaluating a loan request from Creek Enterprises

P2-12 Debt analysis Springfield Bank is evaluating Creek Enterprises, which has requested a $4,000,000 loan, to assess the firm's financial leverage and financial risk. On the basis of the debt ratios for Creek, along with the industry averages and Creek's recent financial statements (on the facing page), evaluate and recomm

Calculating P/E ratios and Profit Margin for Dell and Apple. Which is stronger?

Please see file attached. Using the financial information of as of December 31 of each year, calculate the P/E ratios each year for the last four quarters for Dell and Apple. Which company has made the strongest recovery in terms of profit margin and which has had the strongest growth in P/E rat

Benefits of Breakeven Analysis and Operating Leverage: formulas

Discuss and give examples of the following formulas that are used in breakeven analysis: Contribution Margin Method - Breakeven in Units and Breakeven in Sales Dollars. Targeted Profit Analysis - Targeted Profit in Units and Targeted Profit in Sales Dollars. Margin of Safety - Margin of Safety in dollars and Margin of S

Cost analysis of robots replacing workers manufacturing kitchen appliances

I am a senior vice president of a company that manufactures kitchen appliances. I am considering using robots to replace up to ten of my skilled workers on the factory floor. Using a spreadsheet, I need to analyze the costs of acquiring several robots to paint and assemble some of my products versus the cost savings in labor.

Retained Earnings, Treasury Stock, and Transaction Analysis

1) Calculate retained earnings from the following data; calculate the retained earnings balance as of December 31, 2008 Retained earnings, December 31, 2009 $490,400 Net decrease in total assets during 2009 74,800 Net increase in accounts receivable in 2009 17,200 Dividends declared and paid in 2009 67,200

Calculating degree of various Leverages

Problem 1 You are supplied with the follwing analytical income statement for the your firm. It reflects last year's operations. Sales $16,000,000 Variable Costs $8,000,000 Revenue before fixed costs $8,000,000 Fixed Costs $4,000,000

Horizon or Continuing Value

Current and projected free cash flows for Radell Global Operations are shown below. Growth is expected to be constant after 2007. The weighted average cost of capital is 11%. What is the horizon or continuing value of 2007? FCF ( in millions of Dollars) Projected Actual 2005 2006 2007 2008 $606.82 $66

Scotto Manufacturing: Common stock valuation with zero growth.

Scotto Manufacturing is a mature firm in the machine tool component industry. The firm's most recent common stock dividend was $2.40 per share. Because of its maturity as well as its stable sales and earnings, the firm's management feels that dividends will remain at the current level for the foreseeable future. a. If the req

Long term bonds, bond amortization, present value tables, adjusting entries

June 1, 2004 Janson Co sold $1,000,000 in long term bonds for $877,600 maturing in 10 years with a stated interest rate of 8% and yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective interest method. a) Construct a bond amortization table for this p

Evaluating Investment Decisions

Question 1 Design Manufacturing produces and sells a single product. Original data concerning this product appear below: Per Unit Percent of Sales Selling price R150 100% Variable expenses 45 30% Contribution margin R105 70% Fixed expenses are R500 000 per month. Answer the following questions 1.1.

Excel accounting formulas

I need to build an Excel spreadsheet for the calculations in the chart. The spreadsheet must include Excel formulas used (I have listed the Excel formulas- I am having a hard time plugging them in to the spreadsheet). I would also like the detailed formulas written out so that I can plug them in for later practice and understa

Treasury STRIPS: price, yield to maturity calculations

I need some help with these problems using EXCEL 1. A Treasury STRIPS matures in 7.5 years and has a yield to maturity of 6.9 percent. If the par value is $100,000, what is the price of the STRIPS? What is the price quoted? 2. What is the yield to maturity on Treasury STRIPS with 10 years to maturity and a quoted price of

Cost Overruns at Alpha

Alpha Company has implemented a plan whereby functional managers will be held totally responsible for all cost overruns against their (the functional managers') original estimates. Furthermore, all cost overruns must come out of the functional managers' budgets, whether they be overhead or otherwise, not the project budget. What

Market Efficiency

Discuss the following two scenarios. Scenario 1: Is the following statement true or false? Explain. When the 56-year-old founder of Gulf & Western, Inc. died of a heart attack, the stock price immediately jumped from $18.00 a share to $20.25, a 12.5% increase. This is evidence of market inefficiency because an effici

Calculating Present and Future Value and Loan Amortizations

2. If you require a 9 percent return on your investments, which would you prefer? a. $5,000 today b. $15,000 five years from today c. $1,000 per year for 15 years 4. The Mutual Assurance and Life Company is offering an insurance policy under either of the following two terms: a. Make a series of 12 payments of $1,200 at

Mathematics of Finance

Show each formula and all work. #37: Find the amount of each payment that must be made into a sinking fund to accumulate each amount. (Recall, in a sinking fund, payments are made at the end of every interest period.) 233,188; money earns 9.7% compounded quarterly for 7 3/4 years ______________________________________

Rate of returns, standard deviations, coefficents of variation

Please see attached file. The market and Stock J have tire following probability distributions: Expected Returns Probability rM, rl 0.3 15% 20% 0.4 9 5 0.3 18 12 a. Calculate the expected rates of return for the market and Stock J. b. Calculate the standard deviations for t

Expected return, standard deviation, and coefficent of variation

Please see attached. 1-1 A stock's return has the following distribution Demand of the company Product Probability of this demand occurring Rate of Return if this demand occurs Weak 0.1 (50%) Below Average 0.2 (5) Average 0.4 16 Above Average 0.2 25 Strong 0.1 60 1 Calculat

EFN: What is the amount of external financing needed for Martin, Inc.?

Please see the attached problem. EFN: The most recent financial statements for Martin, Inc., are shown here: INCOME STATEMENT BALANCE SHEET Sales $19,200 Assets $93,000 Debt $20,400 Costs $15550 Equity $72,600 Taxable income $ 3,650 Total $93,000 Total $93,000 Taxes (34%) 1,241 Ne

Additional funds needed

Please see the attached file. The Candy Company sales are forecasted to increase from $1000 in 2005 to $2000 in 2006. Here is the December 31, 2005, balance sheet: Cash $100 Accounts payable $50 Accounts receivable $200 Notes payable $150 Inventories $200 Accruals $50 Current assets $500 Current liabilit

Various Problems Related to Finance

1. Electronics Unlimited has the following capital structure: 60% stock, 10 % preferred stock, and 30% in debt. The after-tax cost of debt is 8%, the cost of preferred stock is 10%, and the cost of common stock is 12%. What is the Weighted Cost of Capital (WACC). 2. Your company's fixed costs are $2 million and variable co