Suppose Trahan Co. is considering a three-year expansion plan in a machinery with initial investment of $4,000,000. The machinery will be depreciated using straight-line method over three years after which the value of asset will be $500,000.
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Suppose it is January 1, 1998 and spot pounds are selling at $1.7342, while 90 day forward pounds are selling at $1.7156. At the same time, DM spot and 90 day forward rates are $0.6138 and $0.6014, respectively. According to these quotes the
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Consider the following collection of n=9 closing for stock ABC: 101.02, 102.23, 100.34, 99.87, 98.65, 96.45, 98.45, 99.00, 100.05. Compute the standard estimator of the volatility parameter σ using these closing prices.
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You’ve observed the following returns on SkyNet Data Corporation’s stock over the past five years: 12 percent, –9 percent, 20 percent, 17 percent, and 10 percent. Suppose the average inflation rate over this period was 3.2 percent, and the average T-..
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Define the following terms and explain how they affect one another. More specifically, for what purposes are they used and how do they relate to one another: efficient portfolio, individual investor, short selling, Sharpe ratio, beta and CAPM.
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Malko Enterprises’ bonds currently sell for $1,050. They have a 6-year maturity, an annual coupon of $75, and a par value of $1,000. What is their current yield?
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You are starting a new business, and you want to open an office in a local mall. You have been offered two alternative rental arrangements. You can pay the landlord 10% of your sales revenue, or you can pay a fixed fee of $1,000 per month. Describe t..
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You are bearish on stock ABC, and its current market price is €100 per share. You ask your broker to sell short 100 shares. Your broker has a 50% margin requirement on short sales, so you add €5,000 on your account with the broker. Holding period is ..
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Smith Company Balance Sheet Assets: Cash and marketable securities $300,000 Accounts receivable 2,215,000 Inventories 1,837,500 Prepaid expenses 24,000 Total current assets $3,286,500 Fixed assets 2,700,000 Less: accumulated depreciation 1,087,500 Ne..
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Provide historical financial statements. Include the balance sheet, income statement and statement of cash flows for the past 3-5 years. Provide monthly profit and loss statements for the past two years.
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You are considering buying a house for $200,000. You have $40,000 in your bank account which pays 1% APR compounded monthly. If you contribute 10% of the price of the house as a down payment, the terms of your mortgage will be an original balance of ..
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Can the economy be in a long-run macroeconomic equilibrium without being in a short-run macroeconomic equilibrium?
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