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Short Sale

How would I find the investor's profit on a short sale at $45 if covered at a price of $30?

Stock Movement

If a stock moves through a support level, which direction is the stock likely to go?

Expected Return

What is the expected return on a stock given the following? Risk free rate = 6% Beta = 1.25 Expected return on the market = 13%

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


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?


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

CAPM and Cost of Capital.

CAPM and Valuation. You are a consultant to a firm evaluating an expansion business. The cash-flow forecasts (in millions of dollars) for the project are: Years Cash Flow 0 -100 1-10 + 15 Based on the behavior of the firm's stock, you believe that the beta of the firm is 1.4. Assuming that the rate of retur

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


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


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

Accounting/Financial Markets Multiple Choice

1).Which of the following is not considered an acceptable inventory cost method according to GAAP? A) First in , First out (B) First in Last out (C) Last in Fist out (D) Average cost 2) The cost flow assumption selected by a company need not correspond to the actual physical movement of the company's merchandise A) True (B)

Financial Health of EBay

Please review the financial information provided, and give your recommendation of the financial health of eBay. Please explain your reasoning. I have uploaded the finances over the last 3 years to help in recommendation.

Stock valuation using DDM

The current price of ADM's stock, Po, is $20 and the company is expected to pay a $2.20 dividend next year. If the appropriate required rate of return for ADM's stock is 15 percent, what should be the price of the stock in one year, P-hat sub 1? Assume that the company has achieved constant growth.

Finance/ Accounting Problem

The following journal entries are from the books of Kara Elizabeth Company: a. Buildings 90,000 cash 35,000 Mortgage Payable 55,000 b. Cash 25,000 Capital Stock 25,000 c. Cash 40,000 Loan Payable 40,000 D. Salary Expense 12,000 Cash

The Best Manufacturing Company

The Best Manufacturing Company is considering a new investment. Financial projections for the investment are tabulated below. Cash flows are in $thousands, and the corporate tax rate is 34 percent. Assume all sales revenue is received in cash, all operating costs are income taxes are paid in cash, and all cash flows occur at

Finance Calculation : DuPont (Du Pont) Analysis

DuPont Analysis. See attached file for full problem description. The Fern Furniture Company, a manufacturer and wholesaler of high-quality home furnishings, has been experiencing low profitability in recent years. As a result, the board of directors has replaced the president of the firm with a new president, Helen Adams, who h

The C.V.P Equation

A company sells lawnmowers for $895 each. The variable cost per lawnmower is $520. The company's monthly fixed costs are $84,500. Using the C-V-P equation, compute the amount of profit the company will have for a month in which the company sells 375 lawnmowers.