Reference no: EM132755673
Problem 1: XYZ incurred accrued salary expense. With respect to this event, indicate whether following statement is true or false. Cash flow from operating activities would show a cash outflow?
Suppose a borrower knows at time t = 0 that it will have available at time t = 1 an opportunity to invest $85 in a risky project that will pay off at time t = 2. The borrower knows that it will be able to invest in one of two mutually exclusive projects, S or R, each requiring a $340 investment. If the borrower invests in S at time t = 1, the project will yield a gross payoff of $620 with a probability of 0.8 and $180 with a probability of 0.2 at time t = 2. If the borrower invests in R at time t = 1, the project will yield a gross payoff of $675 with a probability of 0.6 and $100 with a probability of 0.4 at time t = 2. The borrower's project choice is not observable to the bank.
The riskless, single-period interest rate at time t = 0 is 10%. It is not known at time t = 0 what the riskless, single period interest rate at time t = 1 will be, but it is common knowledge that this rate will be 8% (with probability 0.65) or 15% (with probability 0.35). Assume universal risk neutrality and that the borrower has no assets than the project on which you (as the lender) can have a claim.
Suppose you are this borrower's bank and both you and the borrower recognize that this borrower has two choices: (1) it can do nothing at time t = 0 and simply borrow at the spot market at interest rate prevailing for it at time t = 1, or (2) it can negotiate at time t = 0 with you (or some other bank) for a loan commitment that will permit it to borrow at predetermined terms at time t = 1.
Problem 2: What advice should you give this borrower? Assume a competitive loan market in which each bank is constrained to earn zero expected profit. Determine the NPV of the alternative(s) that you recommend.
|
Explain the key elements of project management
: You have been hired by a large hospitality firm (e.g., Marriott International, Hilton, Sheraton, Best Western, etc.) to be the project manager of the firm's.
|
|
Considering entering the brazilian market
: Imagine that you are the marketing manager for a U.S. manufacturer of disposable diapers. Your firm is considering entering the Brazilian market.
|
|
Omit the schedule reconciling net income to net cash
: Omit the schedule reconciling net income to net cash provided by operating activities and the schedule of noncash investing and financing activities
|
|
Manufacturer of disposable diapers
: Imagine that you are the marketing manager for a U.S. manufacturer of disposable diapers
|
|
What advice should give the borrower
: What advice should you give this borrower? Assume a competitive loan market in which each bank is constrained to earn zero expected profit.
|
|
What is the amount of fixed costs
: The variable costs as a percentage of revenue are 70%. The income tax rate is 40%. What is the amount of fixed costs
|
|
What global marketing strategies
: What global marketing strategies have these companies implemented to stay ahead of their competitors?
|
|
Make a schedule of forecasted sales on a rolling basis
: Actual sales for the six-month period, January. Make a schedule of forecasted sales, on a rolling basis, for the months January through June, inclusive.
|
|
How much would each preferred shareholder receive
: On 1/1/20, RAD Corp issued $100 Par Value Preferred Stock with provisions for $5 dividends. How much would each preferred shareholder receive
|