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Which proposal is best?

Case 7-3 Credit Policy Review The president, vice president, and sales manager of Moorer Corporation were discussing the company's present credit policy. The sales manager suggested that potential sales were being lost to competitors because of Moorer Corporation's tight restrictions on granting credit to consumers. He stated

Gross Margin Comparison

(This is the table) Practice 21-4 Gross Margin Comparison Which of the following companies performed better during the period based on gross margin alone? Com. A Com. B Beginning total assets $ 183,000 $ 92,000 Ending total assets 192,000

Risk Management

Risk management involves safety concerns not only for the employees but for a company as well. What are some ways a company can prepare the business for a natural disaster?

Mathematics of Finance

Find the simple interest 1) $4902 at 9.5% for 11 months Find the amount of interest earned 2) $3954 at 8% compounded annually for 12 years Find the present value 3) $17,650 in 4 years, 8% compounded quarterly Find the future value 4) $500 deposited at the end of each 6-month period for 8 years; money earns 6% co

Rate of cost

Your firm has $100,000 available in Retrained Earnings at a cost of 12%. Additional common stock can be issued at a cost of 14%. If your company needs to raise $200,000 in equity, what rate should you assume for its cost?

Amortizing Loan

TIME LOAN BALANCE YEAR-END INTEREST YEAR-END PAYMENT AMORTIZATION OF LOAN DUE ON BALANCE 0 $1,000 $80 $301.92 $221.92 1 $301.92 2 $301.92 3 $301.92 4 0 0 x 4-year amortizing loan. Borrow $1,000 initially and repay it in four equal annual year-end payme

Supernormal Growth Valuation for Stock

A share of stock currently pays a dividend of D0 = $5. The dividend is expected to grow at a 20 percent annually for the next 10 years, then it will grow at a 15 percent rate for 10 more years, and then at a long-run normal growth rate of 10 percent forever. If investors require a 10 percent return on this stock, what is its c

FINANCIAL MARKET EXPERIENCE

About a personal experience with a financial market. Identify your need for the financial market and the process of selecting an intermediary-including criteria used in the selection. Discuss any barriers or unusual circumstances that were part of the experience, and if you consider your process repeatable as executed or requiri

Costs, Revenue and Break even Calculations

The Lottery has arrived in North Carolina. Your client has a novel idea of combining pizza sales with lottery ticket sales. You have been employed as a management consultant to recommend "for or against" the Lotto Pizza project. You have been asked to develop a business plan around your recommendation in rural eastern Johnsto

Time Value of Money

What does that term "time value of money" mean and how does it relate to the calculation of interest, present values of annuities, and payments to amortize a loan?

Abnormal Growth

The Hart Mountain Company has recently discovered a new type of kitty litter which is extremely absorbent. The company expects to enjoy an unusually high growth rate (25 percent) for two years while it has exclusive rights to the raw material used to make the kitty litter. For the next two years (years 3 and 4), the company pr

Finance / Accounting (35 Questions)

1. The ____________ provides a financial summary of the firm's operating results during a specified period. a) Statement of cash flows b) Statement of retained earnings c) Balance sheet d) Income statement 2. When calculating the proportion of revenue that finds its way into profits, it is often appropriate to add back d

Bonds

For a given change in prevailing interest rates, which security will change more in value, a T-bill or a 30 year government bond? Why?

Bonds

The yield on a corporate bond is 10%, and it is currently selling at par. The marginal tax rate is 20%. A par value municipal bond with a coupon rate of 8.50% is available, Which security is a better buy? Also If the municipal bond rate is 4.25% and the corporate bond rate is 6.25%, what is the marginal tax rate, assuming inves

International Finance Review

6. Assume the bid rate of a New Zealand dollar is $.33 while the ask rate is $.335 at Bank X. Assume the bid rate of the New Zealand dollar is $.32 while the ask rate is $.325 at Bank Y. Given this information, what would be your gain if you use $1,000,000 and execute locational arbitrage? That is, how much will you end up with

Accounting and Finance Problems

1. In 2003, David Corp. acquired 15,000 shares of its own $1 par value common stock at $18 per share. In 2004, David issued 10,000 of these shares at $25 per share. David uses the cost method to account for its treasury stock transactions. What accounts and what amounts should David credit in 2004 to re

Product Cost Hierarchy

For the following list of costs, indicate by the appropriate letter which category of activities each cost applies to: unit level (U), batch level (B), product line (P), or facility support (F): 1. Machine fine-tuning adjustment cost (required after the production of each unit) 2. Salary of vice president of finance 3. Mach

Finance/Accounting : Cost-Volume-Profit

9. What is the basic C-V-P equation? What is a more detailed version of this equation? 10. What is the contribution margin, and why is it important for managers to know the contribution margins of their products? 11. How much will profits increase for every unit sold over the break-even point? 12. What is the maj

Cash Budget for Higgins and Griffin Financial Planners

Cash Budget for Higgins and Griffin Financial Planners Higgins and Griffin Financial Planners have forecasted revenue for the first six months of 2005 as shown on the following table: Month Nov. 2004 Dec-04 Jan-05 Feb Mar Apr May June Revenue $48,000.00 $45,000.00 $25,000.00 $27,000.00 $30,000.00 $38,000.00 $40,000.00

Finance and Decision-Making : Alternative Investments, Building Use and Marketing

7.5 Benson Enterprises is evaluating alternative uses for a three-story manufacturing and warehousing building that it has purchased for $225,000. The company can continue to rent the building to the present occupants for $12,000 per year. The present occupants have indicated an interest in staying in the building for at leas

LONG LIVED NONMONETARY ASSETS AND THEIR AMORTIZATION

Cleanburn Coal Co. purchased coal-leasing land that contains 800,000 tons of coal for $21,700,000. Soil test by geologist cost $35,250 for the purchased land, but test at other sites that yielded negative results cost $116,250. Clearburn uses the full-cost method for exploration cost (ie., the company's total exploration and tes

NONMONETARY ASSETS AND THEIR AMORTIZATION

Pemberton Corp. purchased a machine costing $300,000 that had an estimate useful life of six years and residual value of $18,000. The machine is expected to produce 3,525,000 units during its useful life, as follow: YEAR UNITS 1

Forward Rates and Arbitrage

1. Deriving the Forward Rate: Assume that annual interest rates in the U.S. are 4 percent, while interest rates in France are 6 percent. a. According to IRP, what should the forward rate premium or discount of the euro be? b. If the euro's spot rate is $1.10, what should the one-year forward rate of the euro be? 2. Co

Finance/ Accounting question

1. What are some examples of fixed and variable costs from your workplace? Which costs may have both variable and fixed components? How can this be resolved for analysis purposes? 2. When is it appropriate for companies to use activity-based costing? How might activity-based costing be used in your company? What are some diff