Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.43 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $1,990,000 in annual sale..
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The YAX Corporation's bonds have 6 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 9%. What is the yield to maturity at a current market price of $803? What is the yield to ma..
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Consider the following information on Stocks I and II: State of Economy Probability of State of Economy Rate of Return if State Occurs Stock I Stock II Recession .21 .050 −.26 Normal .66 .350 .18 Irrational exuberance .13 .210 .46. Calculate the beta..
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Each business day, on average, a company writes checks totaling $12,000 to pay its suppliers. The usual clearing time for the checks is four days. Meanwhile, the company is receiving payments from its customers each day, in the form of checks, totali..
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Consider an 7.5% coupon bond selling for $966.10 with 3 years until maturity making annual coupon payments. The interest rates in the next 3 years will be, with certainty, r1 = 7%, r2 = 8%, and r3 = 10%. Calculate the yield to maturity and realized c..
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Rolling Company bonds have a coupon rate of 6.00 percent, 24 years to maturity, and a current price of $1,186. What is the YTM? The current yield? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)
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You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a common practice with expensive, high-tech equipment). The scanner costs $8,050,000, and it would be depreciated straight-line to zero over fiv..
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Dinklage Corp. has 5 million shares of common stock outstanding. The current share price is $71, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $65 million, a coupon of 6..
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Draiman, Inc., has sales of $602,000, costs of $256,000, depreciation expense of $62,500, interest expense of $29,500, and a tax rate of 40 percent. The firm paid out $44,500 in cash dividends and has 57,000 shares of common stock outstanding. What i..
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Describe a business corporation that you might want to create. Indicate the specific provisions you would include into Articles of Incorporation including the number of directors in you corporation and how you plan to capitalize your corporation.
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Assume that an investor generates the following income stream and can be purchased at the beginning of 209 for $1000 and sold at the end of 2015 for $1200. Estimate the yield for this investment. If a minimum return of 9% is required, would you recom..
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Six-month T-bills have a nominal rate of 6%, while default-free Japanese bonds that mature in 6 months have a nominal rate of 3%. In the spot exchange market, 1 yen equals $0.0088. If interest rate parity holds, what is the 6-month forward exchange r..
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