Reference no: EM131068880
1. A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent on ordinary income and capital gains, the tax effect of this transaction is...
2. A corporation is considering expanding operations to meet growing demand. With the capital expansion, the current accounts are expected to change. Management expects cash to increase by $20,000, accounts receivable by $40,000, and inventories by $60,000. At the same time accounts payable will increase by $50,000, accruals by $10,000, and long-term debt by $100,000. The change in net working capital is...
3. Nico Corporation expects to generate free-cash flows of $200,000 per year for the next five years. Beyond that time, free cash flows are expected to grow at a constant rate of 5 percent per year forever. If the firm's average cost of capital is 15 percent, the market value of the firm's stock is $500,000, and Nico has a half million shares of stock outstanding, what is the value of Nico's stock?
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Determining the rocket to hit the ground
: A toy rocket is launched from a 3.5 m high platform in such a way that its height, h (in meters), after t seconds is given by the equation h=-4.9t + 23.8t +3.5. How long will it take for the rocket to hit the ground?
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What is the estimated real rate of interest
: Nico Nelson, a management trainee at a large New York-based bank is trying to estimate the real rate of return expected by investors. He notes that the 3-month T-bill currently yields 3 percent and has decided to use the consumer price index as a pro..
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Calculate the value of the treasury note
: Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with three years to maturity (TM) has a coupon rate of 5%. The yield of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of t..
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Ordinary income and capital gains-tax effect of transaction
: A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent ..
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Explain how you will ensure academic integrity
: You will conclude your toolbox document with a short reflection paper (of 2-3 pages) in which you note any remaining questions and concerns that you may have about becoming an effective scholarly writer, how you will use writing resources availabl..
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Coupon bonds outstanding-common stock-preferred stock
: Debt: 5,000 6 percent coupon bonds outstanding, $1,000 par value, 23 years to maturity, selling for 103 percent of par; the bonds make semiannual payments. Common stock: 105,000 shares outstanding, selling for $61 per share; the beta is 1.1. Find the..
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About the monthly loan payments
: Monthly Loan payments: Personal Finance Problem Tim Smith is Shopping for a used car. He found one priced at $5600. Assuming that Tim accepts the dealer offer, what will his monthly ( end of month) payment amount be? b. Use a financial calculator or ..
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Environmental effects should be treated as sunk costs
: After discovering a new gold vein in the Colorado mountains, CTC Mining Corporation must decide whether to go ahead and develop the deposit. The most cost-effective method of mining gold is sulfuric acid extraction, a process that results in environm..
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