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Eagle Industries feels that a lockbox system can shorten its accounts receivable collection period by 4 days. Credit sales are $2,700,000 per year, billed on a continuous basis. The firm has other equally risky investments with a return of 20%. The cost of the lockbox system is $8,000 per year. (Note: assume a 365-day year.)
A. What amount of cash will be made available for other uses under the lockbox system?
B. What net benefit (cost) will the firm realize if it adopts the lockbox system?
C. Should it adopt the proposed lockbox system? Yes or No.
Currency Futures Definition. What are currency futures? How do they differ from currency forwards?
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A bond has a coupon rate of 8 percent, 7 years to maturity, semiannual interest payments, and a YTM of 7 percent. If interest rates suddenly rise by 2 percent, what will be the percentage change in the bond price?
Tiger inc. needs to raise $85,000 to purchase a new machine. Tiger knows its component costs of capital are debt 5%, preferred stock 7%, new equity 13%, and retained earnings 11%. The firm's marginal tax rate is 30 percent. If Tiger expects to genera..
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If speculators expect the spot rate of the yen in 60 days to be ____ than the 60-day forward rate on the yen, they will ____ the yen forward and put ____ pressure on the yen's forward rate. Fill in blanks
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