North Construction had $850 million of sales last year, and it had $425 million of fixed assets that were used at only 80% of capacity. What is the maximum sales growth rate North could achieve before it had to increase its fixed assets?
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Which of the following is a reason why companies move into international operations? a. To take advantage of lower production costs in regions of inexpensive labor. b. To develop new markets for their finished products. c. To better serve their prima..
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David Rose Inc. forecasts a capital budget of $500,000 next year with forecasted net income of $400,000. The company wants to maintain a target capital structure of 30% debt and 70% equity. If the company follows the residual dividend policy, how muc..
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California Retailing Inc. has sales of $4,000,000; the firm's cost of goods sold is $2,500,000; and its total operating expenses are $600,000. The firm's interest expense is $250,000, and the corporate tax rate is 40%. The firm paid dividends to pref..
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The Pitt Stop generated net income of $1,250 and paid dividends of $250. Accounts payable fell by $100, accounts receivable increased by $75, inventory increased by $60, depreciation expense was $25, and net fixed assets decreased by $15. There was n..
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Mason, Inc. has just paid a $1.00 annual dividend on its common stock. The dividend is expected to grow at a constant rate of 2% per year indefinitely. Based on market risk conditions and Mason's beta value, the required rate of return on Patriot’s s..
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A recent graduate of a finance program started working for a US based multinational firm. He noticed that the company had recently entered into a contract to sell a large machine worth 5 million euros. The payment was to be delivered 180 days from no..
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A stock sells for $30. The next dividend will be $6 per share. If the return on equity ROE is a constant 15% and the company reinvests 20% of earnings in the firm, what must be the opportunity cost of capital?
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How has Procter and gambles stock performed in the short term and the long term? Discuss the trends and offer the reader you opinion as to why the stock has performed the way it has.
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Leisure Lodge Corporation is expected to pay the following dividends over the next four years: $15, $10, $5, $2.20. Afterwards, the company pledges to maintain a constant 4% growth rate in dividends forever. If the required return on the stock is 10%..
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Two chemical corporations, both equity financed with no debt, are essentially in the same business. However, whereas one of the corporations has a stable earnings and dividend record, paying out all its earnings in dividends, the other is a growth st..
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Maggie's Muffins, Inc., generated $2,000,000 in sales during 2015, and its year-end total assets were $1,300,000. Also, at year-end 2015, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..
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