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Breakeven cash inflows The One Ring Company, a leading producer of fine cast silver jewelry, is considering the purchase of new casting equipment that will allow it to expand its product line. The up-front cost of the equipment is $750,000. The company expects that the equipment will produce steady income throughout its 10-year life.
a. If One Ring requires a 9% return on its investment, what minimum yearly cash inflow will be necessary for the company to go forward with this project?
b. How would the minimum yearly cash inflow change if the company required a 12% return on its investment?
Ghost Rider Corporation has bonds on the market with 10 years to maturity, a YTM of 6.5 percent, and a current price of $926. What must the coupon rate be on the company’s bonds?
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Which of the following is the main cost of the operation of commercial banks? a.) cost of labor b.) interest the banks pay on their borrowings c.) cost of materials d.) cost of energy
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“The recent wave of IPOs is an attempt by many small firms to capitalize on the recent run-up in stock prices.” “IPOs transfer wealth from unsophisticated investors to large institutional investors who get in at the offer price and get out quickly.”
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