NPV/IRR. Growth Enterprises believes its latest project, which will cost $80,000 to install, will generate a perpetual growing stream of cash flows. Cash flow at the end of this year will be $5,000, and cash flows in future years are expected to grow indefinitely at an annual rate of 5 percent. a. If the discount rate for th
Suppose the expected returns and standard deviations of stocks A and B are E(R^A)=0.15, E(r^B)=0.25, s^a=0.1, and s^b=0.2, respectively. a.Calculate the expested return and standard deviation portfolio that is composed of 40 percent A and 60 percent B when the correlation between returns on A and B is 0.5. b. Calculate the
Employee Stock Options/Short Essay How do you understand this statement: "By granting employee stock options?" Can we say that employee stock options act like an investment? That is why, as any investment, it incurs a risk. Right?
1) Given the following component reliabilities of a simple system consisting of 3 components,Find the reliability of the system (an electrical Current will travel from pt A to B successfully C1 C2 C3 A---.996----.990----.860----B (Series system) 2) Given the parallel arrangement of the some compo
Describe the difference between Penetration and Prestige pricing. Give an example of each as well as the benefits and disadvantages of the two types of pricing.
Application: In a conventional employee stock-options plan, key employees are granted the right to buy a fixed number of shares for a predetermined period. The number of shares granted depends on the employee's level of responsibility. Usually, the number of shares granted under an employee stock-option plan is commensur
United States (Economics): Explain why state tax rates on personal income vary more on a state-by-state basis than do corresponding tax rates on corporate income.
Financial management is based on three disciplines: financial accounting, managerial accounting, and managerial finance. Explain how the three disciplines fit into the overall financial management function. Using examples if possible, show how they are similar and how they differ? The key difference between financial and man
From your knowledge of the relationships among the various cost functions, complete the following table: Q TC FC VC ATC AFC AVC MC 0 125 ___ ___ ___ ___ ___ ___ 10 ___ ___ ___ ___ ___ ___ 5 20 ___ ___ ___ 10.50 ___ ___ ___ 30 ___ ___ 110 ___ ___ ___ ___ 40 255 ___ ___ ___ ___ ___ ___ 50 ___ ___ ___ ___ ___ 3 ___ 60
What type of inflation accounting do you favor under high inflationary periods? Do you think tax allocation can improve the prediction of future tax payments in the short run? What are the economic consequences of SFAS No.87?
Joe quits his computer programming job, where he was earning a salary of $50,000 per year, to start his own computer software business in a building that he owns and was previously renting out for $24,000 per year. In his first year of business he has the following expenses: salary paid to himself, $40,000; rent, 0; other expe
As a manager of a financial planning business I have two financial planners, Phil and Francis. In an hour, Phil can produce either one financial statement or answer 10 phone calls, while Francis can either produce 3 financial statements or answer 12 phone calls. Does either person have an absolute advantage in producing both pro
The Tampa bay (Florida) Area Chamber of Commerce wanted to know whether the mean weekly salary of nurses was larger than that of school teachers. To investigate, they collected the following information on the amounts earned last week by a sample of school teachers and nurses. Pease show work with formulas in Excel Sprea
Bob Nale is the owner of Nale's Texaco GasTown. Bob would like to estimate the mean number of gallons of gasoline sold to his customers. From his records, he selects a random sample of 60 sales and finds the mean number of gallons sold is 8.60 and the standard deviation is 2.30 gallons. PLease Show all work in excel
A normal distribution has a mean of 50 and a standard deviation of 4. Please use Excel Spreadsheets. Show all work and formulas a) Compute the probability of a value between 44.0 and 55.0 b) Compute the probability of a value greater than 55.0 c) Compute the probability of a value between 52.0 and 55.0
According to an IRS study, it takes an average of 330 minutes for taxpayers to prepare, copy, and electronically file a 1040 tax form. A consumer watchdog agency selects a random sample of 40 taxpayers and finds the standard deviation of the time to prepare, copy, and electronically file form 1040 is 80 minutes. a) What
Income = $500 PX = $20 PY = $5 Market rate of substitution between Goods X and Y would be ? ( 100, -4, -20, 25)
What is a Lerner index? If a manufacturing company has a rather unique product that sells for $15 per unit, and the marginal cost is $7.50 what is the Lerner index? Does this index indicate market power? Please step me through this.
Why if farmers make zero economic profit, are they still able to be farmers?
A web-based company stocks and ships after-market auto parts. The company employs several workers to put together packages for shipment based on customers' online orders, and each worker assembles on average 4 packages per hour. Workers are unsupervised and earn $4.00 for each order they assemble. An inspector checks each ord
1. For each of the following events, consider how you might react. What things might you consume more or less of? Would you work more or less? Would you increase or decrease your saving? Are your responses consistent with the discussion of household behavior in this chapter? a. The price of unleaded gasoline rises to over $4.00
John moved his office from a building, he was renting downtown to the carriage house he owns in back of his house. How will his costs change? a. Explicit and implicit costs rise b. Explicit. costs rise, implicit costs fall c. Exp and Imp costs fall d. exp costs fall; implicit costs rise e. Not enough information given
At a compound interest rate of 10% per year, $10,000 one year ago is equivalent to how much 1 year from now?
(See attached file for full problem description and complete chart). --- Johnson Manufacturing and Aaron Brothers Inc. are both involved in the production of brick for the homebuilding industry. Their financial information is as follows: Johnson Aaron Capital Structure Debt @ 12% $ 600
Consider a 4-year amortizing loan. You borrow $10,000 initially, and repay it in four equal annual year-end payments. a. Fill in the following Loan amortization schedule b. Why does the amount of interest decline as the loan ages?
1. Do you think tax allocation can improve the prediction of future tax payments in the short run? 2. what are the economic consequences of SFAS No. 87? 3. What is the fundamental issue surrounding capitalization versus expensing? 4. which approach do you believe management would prefer? 5. Which approach do you
There are two mutually exclusive projects under consideration by the Stephen Company. The following is the expected cash flows from the projects: Year Project A Project B 0 -30,000 -60,000 1 10,000 20,000 2 10,000 20,000 3 10,000 20,000 4 10,000 20,000 5 10,000 20,000 The cost of capital is 14%. Please calculate th
Please help me with this question in the attachment below. Thank you. --- A trust company is paying a commission to real estate agents for housing units sold at a flat rate of $2000 & $3000 per unit. The manager estimates the following marginal product schedule for the agents. (see attachment for chart) W
Banannas Inc. has stock currently selling for $40 per share. The company has 1,200,000 shares outstanding. What would be the effect on the number of shares outstanding and on the stock price of the following: 1. 15% Stock Dividend 2. 4-for-3 Stock Split 3. Reverse 3-for-1 Stock Split
Instructions Use the RATE, NPER, and PV functions to solve for the unknowns in the table below. Yield to Price Maturity Maturity $300 30 FORMULA $300 FORMULA 8% FORMULA 10 10%