In the accompanying figure, the number of parties that Cassanova gives per month is measured on the horizontal axis, and dollars are measured on the vertical. MCp is the marginal cost of providing parties and MBp is Cassanova's marginal benefit schedule from having parties. a. Graphically, show how many parties Cassanova will h
Need help to answer sample problem . Please provide a detail working of answers. Beckett, Inc., has no debt outstanding and a total market value of $ 128,000. Earnings before interest and taxes, EBIT, are projected to be $ 12,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be
Details: Your managing director asks if you can participate in a seminar that the firm is doing on tax efficient financial planning. He would like you to send him, in memo form, the various types of vehicles that can be used by clients to reduce the various kinds if taxation. Prepare a memo to the managing director that expla
In 2009, Hepler Company's sales were $26 million and its total assets were $10 million. Current liabilities were $4 million and total equity was $2 million. Hepler Company's sales for 2010 are forecast to be $34 million, earnings after taxes are expected to be 5% of sales and dividends of $800,000 are expected to be paid. Assumi
Geometric Indexes. We have seen the importance of geometric returns through time. A geometric index is formed across different stocks at a particular point in time, such as a day. Constructing a portfolio that exactly replicates a geometric index is thus impossible. Given this, why would you want to use a geometric index? In oth
# 1 A study was designed to compare the effects of drug A and drug B on bone mineral density (BMD). One of the outcome measures was the percent increase in BMD at 12 months. Drug A produced a significantly higher percent change (4.8 percent) in BMD than drug B (2.8) with a p value < .001. a) What is the variable o
Go to http://finance.yahoo.com and get the â??Market Capâ? for AT&T (ticker: T). The market value of common equity (i.e., the market capitalization) is the stock price multiplied by the number of shares.
Opportunity Costs. Two graduate business students are considering opening a full-service car wash in Greenville, North Carolina, after graduation. This is an alternative to employment with a local manufacturing firm where they would each earn $70,000 per year. A fully equipped facility can be leased at a cost of $35,000 for the
Suppose you hold 2 stocks in your portfolio, which have same variance (the covariance is any number) You want to minimize the portfolio variance (don't care about the mean) What will be the optimal weights?
A company manufactures refrigrators for domestic use .There are three models: Lo ,Mid and Hi.The Models ,their quality and their price are aimed at different markets..Product costs arecomputed on ablanket (business-wide)overheadrate basis using a labour-hour method .Prices as a general rule areset based on cost plus 20 per cent
According to the theory of cost, specialization in the use of variable resources in the short-run results initially in: a) decreasing returns, and declining average and marginal costs b) increasing returns, and declining average and marginal costs c) increasing returns, and increasing average and marginal costs d)
Rank the sensitivity of the following from most sensitive to an interest rate change to the least sensitive. 1. 8% coupon, non callable 20 year maturity, par bond 2. 9% coupon, currently callable 20 year maturity, premium bond 3. zero coupon, 30 year maturity bond
My uncle has ran a motorcycle shop. He has decided to computerize his records and has asked me to explain the basics of accounting to him so that he can enter his data into his accounting software. 1. Explain to him the rules of debits and credits for the balance sheet and income statement. 2. Provide examples from the manufac
Please help. Chuck, an imperfect forecaster correctly predicts 57% of all bull markets and 68% of all bear markets. Roy is a perfect forecaster. If Chuck is able to charge a fee of $125000, what is the fee that Roy should charge? (assume both of them manage similar size funds)
Assume that both X and Y are well-diversified portfolios and the risk free rate is 8%. Portfolio X has an expected return of 14% and a beta 1. Portfolio Y has an expected return of 9,5% and beta 0,25. In this situation, you would conclude that portfolios X and Y________________ a. Are in equilibrium b. Offer an arbitrage opp
Consider the following two stocks, A and B. Stock A has an expected rate of return 10% and beta 1,20. Stock B has an expected rate of return 14% and beta 1,80. The expected market rate of return is 9% and the risk free rate is 5%. Security______would be a good buy because________ 1. A, It offers an expected excess return of 0
Consider a risky portfolio. The end of year cash flow derived from the portfolio will either be $50 000 or $150 000, with equal probabilities of 0.5 . The alternative riskless investment in t-bills pays 5%. 1.If you require a risk premium of 10%, how much will you be willing to pay for the portfolio? 2.Suppose the portfol
You calculate the black schoals value of a call option as $3.50 for a stock that doesnâ??t pay dividends but the actual price is $3.75 . The most likely explanation is that either the option is_________or the volatility you input into the model is too_________ a. Overvalued and should be written; low b. Undervalued and shou
Please see attached spreadsheet. Zieber Corporation's 2010 financial statements are shown below. Forecast Zeiber's 2011 income statement and balance sheets. Use the following assumptions: (1) Sales grow by 6%. (2) The ratios of expenses to sales, depreciation to fixed assets, cash to sales, accounts receivable to sales, and in
A firm has decided to invest in a piece of land. Management has estimated that the land can be sold in 5 years for the following possible prices: Price Probability 10,000 .20 15,000 .30 20,000 .40 25,000 .10 a. Determine the expected selling price
Carrier Company produces a part used in the small appliance industry. The company produces and sells 120,000 parts per year. The selling price is $4 per part; variable costs are $2.50 per part; fixed costs are $50,000 per year. What is the breakeven point in dollars and units? After conducting research, the president fee
ShoppingKart, Inc is a supermarket having thee operating departments. An income statement for the most recent month of operations is listed below. General Meat Produce Total Sales $50,000 $40,000 $10,000 $100,000 Variable Costs 30,000 16,000 5,000 51,000 Contribution Margin 20,000 24,000 5,000 49,000 Fixed Costs: D
The total cost of ore mining at an open pit is $ 2.60 per tonne and that for waste is $ 1.90 per tonne. If the value of the ore is $ 14.90 per tonne and the company requires a 20% profit margin, what is the maximum stripping ratio?
You have the following data on Joeâ??s Corporation: EBIT: $1,000,000 Tax rate: 40% Cost of Equity: 10% (before borrowing) 12% (after borrowing) Joeâ??s is a zero growth firm, and is currently financed entirely with equity (in other words, it currently has no debt). One of the corporate
Objective: Describe the relationship between strategic planning and financial planning. 5. Which of the following statements is true? a. The future value of an annuity would be greater if funds are invested at the beginning of each period instead of at the end of each period. b. An annuity is a series of equal paym
Thunder Mountain Concrete and Building Materials is trying to bring the company-funded portion of its employee retirement fund into compliance with HB-301. The company has already deposited $200,000 in each of the last 5 years. If the company increases its deposits (beginning in year 6) by 15% per year through year 20, how much
Broker quotes bond at $1180, $1000 par value bond pays 14 percent interest, has 25 years until maturity. Current yield to maturity is 12 percent. Compute new price of bond, is it overpaid in marketplace?
An underground airway is driven at a capital cost of $1.15 million. In its eight year life it is planned to pass an airflow of 120 m3/s at a frictional pressure drop of 720 Pa. The main fans operate at an efficiency of 72%. The annual interest rate is 9.5% and the average cost of power is $0.06 per kWh, determine the annual cost
A mine shaft is to be sunk at a cost of $5.6 million. The life of the shaft is estimated to be 15 years during which time the average planned rate of mineral production is 1.6 million tonnes per year. If the annual interest rate is 8.75%, determine a. The equivalent annual cost of the shaft in $ per year b. Corresponding produ
Please help with the following problem. Tenders received from manufacturers indicate that a fan priced at $170,000 will cost $220,000 per year to run, whilst a fan costing $265,000 will require $190,000 per year in operating costs. If the costing period is five years with an annual interest rate of 7%, determine which fan is