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Weighted Average cost of capital (WACC)

The financial manager of a firm determines the following schedules of cost of debt and cost of equity for various combinations of debt financing: Find the WACC. 1.Debt/Assets After-Tax Cost of Debt Cost of Equity WACC 0% 4% 8% 10%

Consumer behavior

Increasingly, employees are being allowed to choose benefit packages from a menu of items. For instance, workers may be given a package of benefits that includes basic and optional items. Basics might include modest medical coverage, life insurance equal to a year's salary, vacation time based on length of service, and some re

before-tax NPV

Deer Valley Lodge, a ski resort in the Wasatch Mountains of Utah, has plans to eventually add five new chairlifts. Suppose that one lift costs $2 million, and preparing the slope and installing the lift costs another $1.3 million. The lift will allow 300 additional skiers on the slopes, but there are only 40 days a year when the

Minimizing Taxes Question

Lu, wants to start contributing to her employer's 401(k) plan to save money for retirement. She wonders how much she would save on her income taxes by contributing to the plan. She can invest up to 7% of her income into the plan. Her current income is US$60,000 per year, and she is in the 15% tax bracket. Utilizing the formul

Debt and Equity Financing Problem

Please help with the following: If a company has 10 million shares outstanding, now trading at $55 per share and the rate of return for the stock holders is about 12%. The company also issued long term bonds at a 7% interest rate. It pays 35% in taxes What is after tax cost of WACC? How much higher would the WACC be

Disposable Personal Income .

The following data describes an economy: Transfer Payments $72 Interest paid by consumers 4 Net exports 4 Indirect Business taxes 47 Net foreign Factor Income 2 Net Nonbusiness Interest Income 10 Contribution for Social Insurance 35 Personal Taxe

Budget constraint

What is a budget constraint? How does a budget constraint explain consumer choices when used in conjunction with indifference curves? Explain what happens if a household looses half of their income, using a budget constraint and indifference curves in your discussion.

National income accounting

2) Calculate the values for government purchases (G), private domestic saving (S), and private domestic investment (I) from the following information (all variables are in billions of dollars). national income Y = 5,200 budget deficit BuD = 150 disposable income YD = 4,400 trade deficit TD = 110 consumption C = 4,100

finance, cost of capital

You are given the following info about a companies Long term debt outstanding $300,000 Current yield to maturity 8% # of shares of common stock 10,000 Price per share $50.00 book value $25 expected rate of return of stock 15% What is the companies cost of capital? Ignore tax

Managerial Economics-The theory of individual behavior

A consumer must divide $250 between teh consumption of product X and product Y. The relevant market prices are Px= $5 and Py= $10. a. Write the equation for the consumers budget line. b. Illustrate the consumers oppurtuinity set in a carefully labeled diagram. c. Show how the consumers opportuinity set changes when the p

Economics-Rapidly Rising Medical Costs and indifference curve analysis

Need some ideas for a paper about 750 words on this topic..... You are an economics advisor to a U.S. Senator. The Senator is interested in sponsoring legislation to address the impact of rapidly rising medical costs, and has commissioned you to write a briefing paper on the subject. You know medical costs have risen faster

ACCOUNTING - Flexible Budget and Variances

AC556 Week 6 Problem Flexible Budget and Variances NOTE: It is expected that this problem will be completed using an Excel spreadsheet using formulas. Please see the Excel Tutorial that is available under the course home tab. The Grant Company had developed a Static Budget for 2005 for one of its major departments. By the

Capital budgeting, equipment decision

Watson Leisure Time Sporting Goods has improved operations over time and the company needs to make a decision related to an equipment decision . The company plans to purchase a new piece of equipment (to be used over a six year period) for $320,000. Assume the cash flows and depreciation (based upon the use of the 5-year MAC

income, Social Security, and Medicare taxes

1 page You have been hired at a new job and will earn $30,000 in wages. Assume you are single and receive no deduction or any other credits. The current income tax table is the following: The tax rate on Social Security is 6.2%. The tax rate on Medicare is 1.45%. Calculate the total you will pay in income, Social Security

Cash Budget (Accounting)

AC556 Week 5 Problem Cash Budget Note: It is expected that this problem will be complete using an Excel spreadsheet using formulas. Please see the Excel Tutorial that is available under the course home tab. The Hale Company is currently working on its cash budget for the coming year. The following information is availab

Lease versus buy a car

Should I lease or buy a car? Provide an Executive Summary,definition, factors or Costs,measurement, analysis and Summary.

Effectiveness of excise taxes

Please help with the following finance problems. Provide at least 100 words. Analyze the impact of excise taxes on gasoline. 1. Find the excise (and other taxes) on a gallon of gasoline in your home state. 2. Find the excise (and other taxes) on a gallon of gasoline in two neighboring (or nearby) states. ( INDIANA AND OHI

Externalities: A summary

A summary of the categories of externalities (positive and negative, production and consumption) and how the affect the efficiency of markets.

Production Budgets (Accounting)

AC556 Week 3 Problem Production Budgets Note: It is expected that this problem will be complete using an Excel spreadsheet using formulas. Please see the Excel Tutorial that is available under the course home tab. The Hale Company finished their sales projections for the coming year. The company produces one product. Par

Quality of earnings

Earnings are extremely important to a publicly traded company and the creditors and investors of that company. However, looking at earnings without regard to the quality of those earnings is hazardous to the health of creditors and investors. 1. Why is the determination of earnings quality and persistence importa

Uma Corporation

At the end of 2005, Uma Corporation was considering undertaking a major long-term project in an effort to remain competitive in its industry. The production and sales departments determined the potential annual cash flow savings that could accrue to he firm if it acts soon. Specifically, they estimate that a mixed strea

Annual Interest

Deflections, LLC, currently net leases its headquarters office building for $70,000 per month, and this lease has two years left to run. (Under a commercial fully net lease, the tenant pays for all maintenance, repairs, insurance and property taxes.) Deflections considers the rent to be less than the current market rate, but ex

Prepare an income statement and evaluate company performance.

1. (1 point) Key Financial Data Dreamscape, Inc. Industry Average Ratio For the Year Ended For the Year Ended (% of Sales) December 31, 2004 December 31, 2005 Cost of goods sold 74.5% 70.0% Gross profits 25.5 30.0 Selling expense 8.0 7.0 Gen. & admin. expense 5.1 4.9 Depreciation expense 2.4 2.0 Total operating expens

Averse selection, moral hazard

AIDS INSURANCE Suppose your company is considering three health insurance policies. The first policy requires no tests and covers all preexisting illnesses. The second policy requires that all covered employees test negative for the HIV virus. The third policy does not cover HIV or AIDS related illnesses. All insurance pol

Poverty in the United States

Go to the following Web site, www.census.gov, and select Poverty. Then use the information on this site to answer the following questions: What is the official poverty line? Is the number of people higher or lower than it was last year? Ten years ago? Why? How many states had an increase in the poverty rate compared t

Calculating government purchases

Calculate the values for government purchases (G), private domestic saving (S), and private domestic investment (I) from the following information (all variables are in billions of dollars). National income Y = 5,200 Budget deficit BuD = 150 Disposable income YD = 4,400 Trade deficit TD = 110 Consumption C = 4,100

Majestic Mining Corporation - maximum price to pay

Majestic Mining Corporation (MMC) is negotiating the purchase of a new piece of equipment for its current operations. MMC wants to know the maximum price that it should be willing to pay for the equipment. You are given the following facts: a. The new equipment would replace existing equipment with a current market value of

Capital budgeting with cost of capital computation

Please see attached word doc, with full details. DataPoint Engineering is considering the purchase of a new piece of equipment for $220,000. It has an eight-year midpoint of its asset depreciation range (ADR). It will require and additional initial investment of $120,000 in nondepreciable working capital. Thirty thousand dollar

What is a budget constraint? How does a budget constraint explain consumer choices when used in conjunction with indifference curves? Explain what happens if a household looses half of their income, using a budget constraint and indifference curves in your discussion.

Budget Constraints What is a budget constraint? How does a budget constraint explain consumer choices when used in conjunction with indifference curves? Explain what happens if a household looses half of their income, using a budget constraint and indifference curves in your discussion.