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You have just been hired as a financial analyst for Basel Industries. Unfortunately, company headquarters (where all of the firm's records are kept) has been destroyed by fire. So, your first job will be to recreate the firm's cash flow statement for the year just ended. The firm had $100,000 in the bank at the end of the prior year and its working capital accounts except cash remained constant during the year. It earned $5 million in net income during the year but paid $700,000 in dividends to common shareholders. Throughout the year, the firm purchased $5.5 million of machinery that was needed for a new project. You have just spoken to the firm's accountants and annual depreciation expense for the year is $460,000; however, the purchase price for the machinery represents additions to property, plant, and equipment before depreciation. Finally, you have determined that the only financing done by the firm was to issue long-term debt of $1 million at a 6% interest rate. What was the firm's end-of-year cash balance? Recreate the firm's cash flow statement to arrive at your answer. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar, if necessary.
$ ______
Naglas has invester her money in widget incs common stock. what is the stocks beta given the risk free rate is 3.5 percent and market risk premium is 5 percent.
According to the Capital Asset Pricing Model, what measures the amount of risk that an individual stock contributes to a well-diversified portfolio? Define this measurement.
Ace Hardware paid an annual dividend of $1.25 per share last month. Today, the company announced that future dividends will be increasing by 2.5% annually. If you require a 11% annual rate of return, how much are you willing to pay to purchase one sh..
Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.86 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debt−equity ratio..
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On June 1, 2014, Day Co. received $103,288 for $100,000 face amount, 12% bonds, a price that yields 10%. Assuming management does not elect the fair value option, prepare the adjusting entry for December 31, 2014. If no entry is necessary, write "no ..
We are considering the purchase of a $350,000 computer-based inventory management system.
Discuss the factors that can affect DermaCare's chances of becoming a successful business? Be as specific as possible
Compute the current ratio for 2010 and 2009.- Compute the debt ratio for 2010 and 2009.- Prepare a horizontal common-size - use 2008 as the base. Comment.
Three put options on a stock have the same expiration date and an exercise price of $55, $60, and $65. The market prices are $3, $5, and $8, respectively. Explain how a butterfly spread could be created. Construct a table showing the profit from the ..
PRICE/EARNINGS RATIO A company has an EPS of $4.50, a book value per share of $43.65, and a market/book ratio of 2.1x. What is its P/E ratio?
They plan to maintain the dividend at this level for the foreseeable future as no future growth is anticipated.
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