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    Finance problem for a MBA level

    If a company's beta were to double, would its return double? If investors risks aversion were to increase, would the risk premium on a high beta stock increase more or less than that on a low beta stock? Explain.

    Cost Classifications

    Outer Banks Shirt Shop manufactures T-shirts and decorates them with custom designs for retail sale on the premises. Several costs incurred by the company are listed below. Match the following cost classification with the cost Item listed below. A cost item may have more than one cost classification. COST CLASSIFI

    Finance Problem for a MBA level

    The problem: You are considering a machine that will cost $ 50,000 and which can be sold after 3 years for $10,000. $12,000 must be invested in working capital and will be recovered after year 3. Sales will be $ 50,000 a year. Operating costs will be 40% of sales. Depreciation will be $ 40,000, $5,000 and $5,000 each year. Th

    Expected Return

    Please see attached. 1-Portfolio expected return you have 10,000 to invest ion a stock portifolio. Your choices are stock x with an expected return of 14 percent and stock y with an expected return of 9 percent .If your goal is creat a portfolio with an expected return of 12.2 percent, how much money will you invest in stock

    Returns and variability

    1-Calculating returns and variability you have observed the following return on Mary ann Data Corporation's stock over the past five years: 216 percent, 21 percent, 4 percent, 16 percent, and 19 percent. a. what was the arithmetic average return on Mary Ann's stock over this five-years period? b-What was the variance of Mary A

    Profitability Index: Example Problem

    Trucks-R-Us leases truck to eight potential customers. The expected revenue from each customer is shown below along with the number of trucks that they require to achieve the revenue. Customer F is a long term customer and critical to the business, so they must be serviced. Customers will not accept a partial allocation. If the

    NPV and the Payback Rule

    The following projects are being considered by the Corporate Investment Committee who has an investment budget of $1,000,000. Project approval will be granted if the payback is achieved within 3 years. Which ones will be funded?. Project Length of project Up Front Investment Annual Cost each Year Annual Bene

    Comparing Monthly Loan Payments

    Anthony and Cleopatra have a dilemma. It seems like a good time to buy their first home but their savings are not sufficient to get the interest rate that Tony would like to pay. If they buy today they can get a loan at 7.0% APR interest compounded monthly. If they wait three years, they will have saved enough to get a loan at

    Calculating NPV for Markets

    Josephine needs to sell her house in a down market and to do this, she is willing to finance the buyer. She found a buyer that suggested multiple offers. Which one should she take to maximize her net present value if her risk free annual percentage interest rate is 6%? Cash up front monthly payment # of monthly payme

    Present Value and Bonds

    1. Given the following cash flows, what is the present value if the discount rate is 8%? Yr1 $200, Yr2 $350, Yr3 $800, Yr4 $1,125 a.$1,115.07 b.$1,947.23 c.$2,165.70 d.$2,358.96 e.$2,922.62 6. A bond with an annual coupon of $100 originally sold at par for $1,000. The current market interest rate on this bond i

    Finance: Evaluation with NPV

    Bauer Industries is an automobile manufacturer. Management is currently evaluating a proposal to build a plant that will manufacture lightweight trucks. Bauer plans to use a cost of capital of 12% to evaluate this project. Based on extensive research, it has prepared the following incremental free cash flow projections (in mil

    Determining the Amount of Additional Funds Needed

    Please work this in excel so I can understand the concept. Additional Funds Needed with Excess Capacity Baxter Box Company's balance sheet showed the following amounts as of December 31st: Cash 10.00 Accounts Payable 15.00 Accounts Receivable 40.00 Accruals

    Finance: Discount Yield Calculation

    Cash manager Ken Johnson just picked up the financial newspaper and is having trouble understanding the jargon. He notices that at a recent Treasury auction of 13-week Treasury bills, the lowest price bid for $10,000 bills was 97.569 percent of par. Can you help Ken understand the various yield calculations? a. What is the di

    Finance problem

    A finance problem. Reggie White, a corporate treasurer, is trying to decide which of two 1-year securities to purchase: a negotiable CD with a nominal yield of 6 percent of a municipal security with a nominal yield of 6% or a municipal security with a nominal yield of 4.25%. The issuing municipality is not in the same state a

    Principles of managerial finance

    Please complete the attached practice problems. Resource: Principles of Managerial Finance Problems P14-9 and P14-16 (Ch. 14) Problem P15-9 (Ch. 15) P14-9 Relaxation of credit standards Lewis Enterprises is considering relaxing its credit standards to increase its currently sagging sales. As a result of the proposed r

    Financial analysis - maximize firm value

    After taking a closer look at the numbers and doing the financial analysis, you begin to think more strategically, and in a broader context, you anticipate what the CFO would ask or what the head of Strategic Planning might want to know. You think about some of the key issues: - Does this project maximize firm value? - Wha

    Asset class: hedge funds

    What specifically is a hedge fund? Why is it difficult to define hedge funds as a specific asset class? Should hedge funds be more regulated or is limiting hedge funds to "sophisticated" investors sufficient? How would you conduct an attribution analysis of a hedge fund manager? What obstacles currently exist with hedge fu

    Investment banking

    What is investment banking? How would an investment banker assist an organization in going public? As a chief financial officer, what information would you need to select an investment banker? 300 words

    Expected return and price

    Weyerhaeuser, The forest products producer, traded at $42 at the beginning of 1996. Beta services typically place its beta at 1.0 with a market risk premium of 6 percent. The risk free rate at the end of 1995 was 5.5 percent. The firm was expected to pay dividends of $1.60 per share in 1996 and 1997. Use CAPM to calculate the e

    Value added from acquisition

    The general manager of the Miami Dolphin a NFL Team is considering paying $2.5 million per year for a "Star" player, along with a $2 million up front signing bonus. He expects the player to enhance gate receipts and television advertising revenue by $3.5 million per year with no added costs. The team requires a 9 percent return

    Need help -

    A portfolio manager has a $10 million portfolio, which consists of $1 million invested in 10 separate stocks. The portfolio beta is 1.2. The risk-free rate is 5% and the market risk premium is 6%. ____ 6. What is the portfolio's required return? a. 9.85% b. 12.00% c. 12.20% d. 12.35% e. 6.20% ____ 7. The

    2-3 page memorandum

    The meeting at Superior Living Inc. with the analyst went well. However, you want to crunch the numbers yourself to ensure accuracy. Furthermore, you need to consider the project in the broader context of how the new production facility can help the company increase output and, more importantly, profits. You know that the CFO wi

    Finance: excess capacity

    Company x has 5 billion in sales and 1.7 billion in fixed assets. currently the company's fixed assets are operating at 90% of capacity. a. what level of sales could the company have obtained if it had been operating at full capacity? b. what is the company's fixed assets/sales ratio? c. if the company's sales increase

    Finance: pro forma income statements

    Please help with the following problem - provide the solution in Excel. Company x recently reported the following 2008 income statement in millions of dollars: sales 700 operating costs including depreciation 500 ebit 200 interest 40 ebt 160 taxes (40%) 64 net income 96 dividends 32 additio

    Finance: cash convergence cycle

    Please help with the following problem. The company x has 15 million of sales, 2 million of inventories, 3 million of receivables, and 1 million of payables. Its cost of goods sold is 80% of sales, and it finances working capital with bank loans at an 8% rate. What is the company's cash convergence cycle? if company x could

    Prone Inc: financial statements

    The following data are taken from the financial statements of Prone, Inc. as of the end of the year 2007. The data are in alphabetical order. Accounts payable $ 28,000 Net income $ 48,000 Accounts receivable 66,000 Other current liabilities 17,000 Cash 54,000 Total assets 250,000 Gross profi