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Finance

Determine income for the month

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

Maximum stripping ratio

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?

Interest rate of 15%

Given an interest rate of 15%, what is the present value of a loan that would accumulate to $200 in one year? $173.91 $90.91 $181.82 $185.00

Capital structure

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

Financial Planning

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

Finding the Future Value: Example Problem

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

Bond valuation of a broker

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

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

Finance: equivalent 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

Which fan is the most economical

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

A mineral deposit is to be analysed

A mineral deposit is to be analysed for mining based upon the following information: (1) selling price of refined metal $0.75/kg: (2) average ore grade 0.5%: (3) recovery of metal 85%: (4) mining, milling, smelting and refining costs per tonne of ore are $6.50. Can the mine be considered profitable at this time?

WACCs

Please assist with the following question.

Historical Growth Rate of Earnings

Problem 9-11. Cost of Equity. Radon Homes' current EPS is $7.06. It was $4.68 five years ago. The company pays out 50% of its earnings as dividends, and the stock sells for $31. a. Calculate the historical growth rate in earnings. (Hint: This is a 5-year growth period.) Round your answer to two decimal places. b. Calcul

A mineral deposit

A mineral deposit is to be analysed for mining based upon the following information: (1) selling price of refined metal $0.75/kg: (2) average ore grade 0.5%: (3) recovery of metal 85%: (4) mining, milling, smelting and refining costs per tonne of ore are $6.50. Can the mine be considered profitable at this time?

Stock price calculation

A share of common stock just paid a dividend of $1.00. If the expected long-run growth rate for this stock is 5.4% and if investors required rate of return is 11.4%, what is the stock price? a) $16.70 b) $17.13 c) $16.28 d) $18.01 e) $17.57

Financial Ratios

Discuss why one should use caution when using financial ratios for analyzing a healthcare organizationâ??s current financial position and future viability. Can you give an example for support?

An item of equipment is assessed.

An item of equipment is to be purchased for $ 250,000. The anticipated operating costs, maintenance costs and salvage values for each year are detailed in the table on File .Determine the economic life of the equipment. It may be assumed that the cost of capital is 10% , depreciation for tax purposes of capital expenditure is al

Zero coupon bond problem

You buy a zero coupon bond at the beginning of the year that has a face value of $1,000, a YTM 0f 7 percent, and 25 years to maturity. If you hold the bond for the entire year, how much in interest income will you have to declare on your tax return?

Mergers, LBO's, Divestitures and Business Failure

Please see the attachment. Connor Shoe Company is contemplating the acquisition of Salinas Boots, a firm that has shown large operating tax losses over the past few years. As a result of the acquisition, Connors believes that the total pretax profits of the merger will not change from their present level for 15 years. The tax

Value of company's ending inventory

A company has the following per unit original costs and replacement costs for its inventory: Part A: 50 units with a cost of $5, and replacement cost of $4.50 Part B: 75 units with a cost of $6, and replacement cost of $6.50 Part C: 160 units with a cost of $3, and replacement cost of $2.50 Under the lower of cost or market

Spot rate calculations: Calculate the 1.5-year and 2-year theoretical spot rates

Calculate the 1.5-year and 2-year theoretical spot rates if the 6-month spot rate is 1.75 percent and the 1-year spot rate is 1.95 percent. The 1.5-year note has a coupon of 3 percent and is selling for 101.3518. The 2-year note has a coupon of 4.5 percent and is selling for 104.5764. (Quotes are in decimals, not 32nds.) Base

Balance Sheet Analysis

I am a little lost here are my problems please show me how to calculate 1. In March 2005, General Electric (GE) had a book value of equity of $113 billion, 10.6 billion shares outstanding and a market price of $36 per share. GE also had a cash of $13 billion and total debt of $370 billion. Four years later in early 2009, GE

Value of the firm

Assuming no major change in operating ratios going forward, calculate the value of the firm using the following data (end of fiscal year): Sales $107,000,000 Net income $5,350,000 Interest expense (average) $1,050,000 Depreciation expense (average) $1,750,000 Current assets $35,000,000 Current liabiliti

About lower cost market

Steel Company, a wholesaler that has been in business for two years, purchases its inventories from various suppliers. During the two years, each purchase has been at a lower price than the previous purchase. Steel uses the lower of FIFO cost or market method to value inventories. The original cost of the inventories is above

3 short finance questions.

I've posted the problems here and in the attachment. Get back to me, thanks. 9-1 DPS CALCULATION Warr Corporation just paid a dividend of $1.50 a share (that is, D0 = $1.50). The dividend is expected to grow 7% a year for the next 3 years and then at 5% a year thereafter. What is the expected dividend per share for each of th

Preferred Stock Valuation and Required Rate of Return

Fee Founders has perpetual preferred stock outstanding that sells for $60. a share and pays a dividend of $5 at the end of each year. What is the required rate of return? Please tell me how I should enter this equation in my financial calculator.

Constant Growth Valuation

Thomas Brothers is expected to pay $0.50 a share (that is, D1 = $0.50). The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, rs, is 15%. What is the stockâ??s current value per share? I have tried to solve this on my financial calculator but am not sure I am doing it

Financial options

United Hospital has received a leasing proposal from Leasing, Inc., for a Siemens cardiac catheterization unit. The terms are: â?¢ Five-year lease â?¢ Annual payments of $200,000 payable one year in advance â?¢ Payment of property tax estimated to be $23,000 annually â?¢ Renewal at end of year 5 at fair market val

Average return and risk help

Two stock abc and xyz have expected returns of 30% and 40% with standard deviation of 15% and 20% respectively. What will be average return and risk if 40% of ones. Funds are invested in ABC and 60% are invested in XYZ