The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up." As a result, the cemetery project will provide a net cash inflow of $93,000 for the firm during the first year, and th..
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What is the present value of the following payment stream, discounted at 8% annually; $1000 at the end of year 1, $2000 at the end of year 2, and $3000 at the end of year 3?
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Your coin collection contains 44 1952 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2054, assuming they appreciate at an annual rate of 5.7 perce..
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Potter Industries has a bond issue outstanding with an annual coupon of 6% and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 8.8%, what is the value of the bond?
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Woidtke Manufacturing's stock currently sells for $33 a share. The stock just paid a dividend of $1.25 a share (i.e., D0 = $1.25), and the dividend is expected to grow forever at a constant rate of 6% a year. What stock price is expected 1 year from ..
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A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.5%. What is the default risk premium on the corporate bond?
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Thirsty Cactus Corp. just paid a dividend of $1.50 per share. The dividends are expected to grow at 35 percent for the next 8 years and then level off to a 8 percent growth rate indefinitely. Required : If the required return is 13 percent, what is t..
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Kingston, Inc. management is considering purchasing a new machine at a cost of $4,408,526. They expect this equipment to produce cash flows of $757,564, $830,902, $1,026,664, $1,059,322, $1,217,327, and $1,289,435 over the next six years.
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Jakob Industries buys materials from its suppliers on terms of 1/10, net 25. Thus, it receives 10 days of "free" trade credit, and it can obtain an additional 15 days of "costly" credit if it decides to forego discounts. What is the nominal annual co..
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Outdoors sells specialty tents for mountain climbers. Its sales for last year included $99,000 of tents and $148,000 of climbing gear. For next year, management has decided to sell specialty sleeping bags also. As a result of this change, sales proje..
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In general, is the U.S. federal tax system progressive or regressive? You bought 1,000 shares of Tund Corp. stock for $68.12 per share and sold it for $90.03 per share after a few years. How will your gain or loss be treated when you file your taxes?..
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Suppose you put $100 into a savings account today, the account pays 8% compounded semiannually, and you withdraw $50 one year after your initial deposit. What would your ending balance be 20 years after the initial $100 deposit was made, assuming tha..
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