Broussard Skateboard's sales are expected to increase by 25% from $8.0 million in 2013 to $10.00 million in 2014. Its assets totalled $4 million at the end of 2013. Broussard is already at full capacity, so its assets must grow at the same rate as pr..
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1) WPM, Inc. has current assets of $8,000,000, current liabilities of $4,000,000, inventory of $1,320,000, and sales of $12,000,000. What is the acid test ratio?
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Assume you receive an 8 year annuity with annual payments to you of $600 at the end of each year, with the first payment being received at the end of year 1 and the last payment being received at the end of year 8. You invest each payment in an accou..
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Competing terms from banks (LO2) Summit Record Company is negotiating with two banks for a $151,000 loan. Fidelity Bank requires a 28 percent compensating balance, discounts the loan, and wants to be paid back in four quarterly payments. Calculate th..
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You are considering buying a security that makes annual payments (to you) that grow by 1% per year forever, with the first payment made one year from today and in the amount of $2. Your required return is 6% per year for this security. How much shoul..
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You’ve observed the following returns on Doyscher Corporation’s stock over the past five years: –28.8 percent, 16.2 percent, 35.4 percent, 3.6 percent, and 22.6 percent. The average inflation rate over this period was 3.36 percent and the average T-b..
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Recalculate the NPV assuming the machine press can only be sold for $45,000 at the end of year four. Does this change have an impact on their decision?
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Stock A is a risky asset that has a beta of 1.4 and an expected return of 13.2 percent. Stock B is also a risky asset and has a beta of 1.25. The risk-free rate is 5.5 percent. Assuming both stocks are correctly priced, what is the expected return on..
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The contract size for platinum futures is 50 troy ounces. Suppose you need 500 troy ounces of platinum and the current futures price is $1,265 per ounce. How many contracts do you need to purchase? How much will you pay for your platinum? What is you..
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The December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,420,000, $144,000 in the common stock account and $2,690,000 in the additional paid-in surplus account. The December 31, 2014, balance sheet showed long-term debt of $1..
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Alcott's preferred stock pays a dividend of $1.00 per quarter. If the price of the stock is $55.00, what is its nominal (not effective) annual rate of return?
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Starskeep, Inc., is a fast growing technology company. The firm projects a rapid growth of 40 percent for the next two years and then a growth rate of 20 percent for the following two years. After that, the firm expects a constant-growth rate of 8 pe..
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