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Finance Problems

Solve the Financial Problem in the attachment for Scott Equipment Organization and Lewis Enterprises. Based on the following scenario, complete the calculations below: Scott Equipment Organization is . Assume that the organization has decided to employ $30 million in current assets, along with $35 million in fixed assets, i

Cost Perspective

The CEO has been considering the option of licensing a regional manufacturer. However, since he invented the technology, he is very concerned about how to structure such an agreement in order to fully protect the intellectual property. In addition, he does not fully trust European firms, mainly because of the recent developments

Increasing Leverage and EBIT

Please help with the following problem. Provide step by step calculations. 1. Dominion expects to have net income next year of $24 million and Free Cash Flow of $27 million. Dominion's marginal corporate tax rate is 40%. What Dominion's EBIT? [Hint: EBIT = NI + Taxes + Interest expense] 2. Dominion expects to have net

Non-Cash Assets and Repurchasing Shares

Please help with the following problems. Provide step by step calculations for each. 1. John is a successful logistical services firm that currently has $5 billion in cash. John has decided to use this cash to repurchase shares from its investors, and has already announced the stock repurchase plan. Currently John is an all

Free Cash Flows and Unlevered Equity

1. Consider a project with free cash flows in one year of $90,000 in a weak economy or $117,000 in a strong economy, with each outcome being equally likely. The initial investment required for the project is $80,000, and the project's cost of capital is 15%. The risk-free interest rate is 5%. What is the NPV? 2. Consider a pr

Internal Management Tools, RNOA, NOPAT Sales, and Stress Tests

1. What is an example of return on invested capital being used as an internal management tool? 2. What is an example of interest expense being ignored when computing return on net operating assets (RNOA)? 3. What is the relation between return on net operating assets and sales? Consider both NOPAT sales and sales to net operat

Accounting Practice Questions

Choose the best answer for each of the following questions and enter the identifying letter in the space provided. Neber Co., which began operations on January 1, 2007, appropriately uses the installment-sales method of accounting. The following information pertains to Neber's operations for the year 2007: Installment sales

Minimize Negative Cash Flow in a Deal

Please help with the following problem. Congratulations! Your small company was just awarded a lucrative contract to provide hundreds of widgets to the US Government. If you perform well, you'll be on "easy street" with all the follow-on business. It will take you 6 months to produce and deliver the units. The US Government

Equity Accounts for Clark Manufacturing

Following are the equity accounts for Clark Manufacturing. Common Stock, $3 Par $ 550,500 Capital Surplus $ 640,000 Retained Earnings $ 3,450,000 Total $ 4,640,500 a. How many shares are outstanding? b. At what average price were the shares sold? c. What is the book value per share of Clark stock?

Economic Value Added to TKK

TKK has $1 billion of capital invested in several projects that are expected to generate a pretax operating profit of $170 million next year. TKK has an estimated tax cost of capital of 15% 1: What is the pretax economic value added expected to generate next year? Calculate economic value added based on pretax operating profi

American Superconductor Decision for Debt Financing vs Equity Financing

Read the article below, available in Proquest: American Superconductor switch; Westboro company plans to raise money through a stock offering Andi Esposito. Telegram & Gazette. Worcester, Mass.: Aug 26, 2003. pg. E.1 Abstract (Article Summary) 'AMSC's management and board of directors believe the decision to forgo a s

Financial Statement Analysis: Horizontal Analysis

Financial information is presented below: December 31, 2009 December 31,2008 Current Assets $125,000 $100,000 Plant Assets (net) $396,000 $330,000 Current liabilities $91,000 $70,000 Long term lia

Calculating buyout prices

Gamma Corporation is considering a two-step buout of Delta Corporation. Delta Corporation has 2,000,000 shares outstanding and its stock price is currently $40 per share. In a two-step buyout, Gamma Corporation will offer to buy 51% of Delta Corporation's shares outstanding for $68 per share in cash, and the balance in a second

Expense Report Claims

1-Retrieve the Expense Report and save it on your computer as Expense Report 1. This partially completed workbook contains the column headings and several expense items. 2-Enter a SUM function in cells C12:N12 which totals the figures in rows 8 through 11. The formula for doing that is "=SUM(C8:C11)" and enter that in C12

Regular cash dividend, periodic share repurchase...

Compare a regular cash dividend with a periodic share repurchase. Which has greater appeal to you? Explain. Explain a stock dividend and further explain if you would prefer it to a cash dividend. What are stock splits and how desirable are they?

Predictions for Opportunites or Issues That Disney May Face

Explain any issues or opportunities that Disney would face based on Disney ratios over the past five years. Please be clear and concise and have the main points up front. Always back up arguments with data/evidence and source information when possible.

Balance Sheet for JCP

****Please answer this question: **Take the company's most recent financial statements and project a 10% increase in sales. Determine whether, and how much, external financing would be needed to support the projected increase in sales Please use for current stock information for JCP which is the company to

Hedging and Expected Tax Saving

Suppose that Ashanti Gold Co. expects to produce a total of 1 million ounces of gold by the end of this year. Total manufacturing and operating cost will be $250 million and interest expenses will be $20 million. Ashanti forecasts the future gold price will be equally $250, $300, or $350. The firm's tax rate is 20 % when taxable

Cash Flow and Net Present Value

1.What are the free cash flows in years 2 and 10 that should be used to evaluate the proposed project? Ans. ______________ Free cash flow for the following years: Year 2 = Year 10 = 2. If the cost of capital for this project is 14%, what is your estimate of the value of the new project? Ans. ___________

Calculating Payback Period and NPV: Example Problem

You are considering making a movie. The movie is expected to cost $10 million upfront and take a year to make. After that, it is expected to make $5 million in the year it is released and $2 million for the following four years. What is the payback period of this investment? If you require a payback period of two years, will you

Change in Stock Price

Company Z stock is trading at $30 per share (its equilibrium price) given that the risk free interest rate is 9% and the equilibrium risk premium on the market portfolio is 8%. The company's long run growth is expected to remain 5% per year forever. Last year's EPS were $3 and the dividend payout ratio is 50%. If beta increases

Unit price and EBIT.

The Clearwater Aquarium Company will produce 66,000 10-gallon aquariums next year. Variable costs are 40% of sales while fixed costs total $133,200. At what price must each aquarium be sold for Clearwater to obtain an EBIT of $114,000?

Automotive Bailout and Managerial Finance

Review the current status of the automotive bailout plans involving GM, Chrysler, and the federal government. Prepare a 300 words on your selected organization in which you address the following: a. background/description of what the proposed government bailout plan requires from the car companies, unions, creditors, supplie

Assessing the goal of Sports Products, Inc. and Managerial Finance

Text Case Study Read the case study from the e-text, Principles of Managerial Finance, (11th ed. )by Gitman, Assessing the Goal of Sports Products, Inc. located at the end of Chapter One. Prepare a 700 words in which you respond to the questions at the end of the case. See attachment. APA format/at least 2 references

Efficient Market Theory and Insider Trading

Please explain the meaning of efficient markets. Why might we expect markets to be efficient most of the time? In recent years, several securities firms have been guilty of using inside information when purchasing securities, thereby achieving returns well above the norm (even when accounting for risk) does this suggest that the

Dividend Growth Rate: Example Problem

What is the expected constant growth rate of dividends for a stock currently priced at $50, that just paid a dividend of $4, and has a required return of 18%? A) 3.41% B) 5.50% C) 9.26% D) 12.5%