The Neptune Company offers network communications systems to computer users. The company is planning a major investment expansion but is unsure of the correct measure of equity capital as it has no traded equity. Your job is to determine the basis of..
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The chief financial officer of AJAX Industries expects sales to increase from $8,000,000 in 2010 to $12,000,000 in 2011. Current assets in 2010 are equal to $5,000,000. Using the percent of sales method, projected current assets for 2011. Please show..
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The budget rate, the lowest acceptable dollar per pound exchange rate, was therefore established at $1.5 per British pound. Any exchange rate below would result in Dayton actually losing money on the transaction.
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Frank owns 100% of the stock of Sands, Inc. (a C corporation). In a tax year, Sands, Inc. has income before tax = $1,500,000. This is after Sands paid Frank a salary = $350,000. Sands, Inc. also paid dividends = $100,000. Sands is Frank's only sou..
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Consider the following two mutually exclusive projects, X and Y, and their cash flows information, Project Year 0 Year 1 Year 2 Year 3 Year 4 X ($1,400) $350 $750 $650 $650 Y ($1,000) $300 $400 $500 $600 (a) Assume that the discount rate is 12%, comp..
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Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate is 10%. The bonds sell at a price of $850. What is their yield to maturity?
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Why do bubbles and bursts occur in financial markets? In discussing this issue, you need to focus on the rationality of investors, the availability of information to different categories of investors, and the use of historical data in financial d..
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An investor has an opportunity to buy a parcel of land for $350,000. He plans to sell it in two years. What will the sale price have to be for the investor to get a 23% constant dollar before-tax ROR with inflation averaging 12% annually?
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You construct a price-weighted index of 78 stocks. At the beginning of the day the index is 9,364.36. During the day, 77 stock prices remain the same, and one stock price increases $4.30. At the end of the day, your index value is 9,417.95. What is t..
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Ratio Analysis - Calculate the current ratio, quick ratio, cash to current liabilities ratio, over a two-year period. Discuss and interpret the ratios that you calculated
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You've been given the opportunity to invest $100,000. In exchange, you will receive quarterly payments of $5,000 for the next 7 years. What rate of return are you earning on your money? (Your answer should be the annual rate of return expressed as a ..
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Filer manufacturing has 9.1 million shares of common stock outstanding. The current share price is $61, and the book value per share is $3. Filer manufacturing also has two bond issues outstanding. The first bond issue has a face value of $71.6 milli..
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