QUESTION Credit Decision. The Branding Iron Company sells its irons for $50 apiece wholesale. Production cost is $40 per iron. There is a 25 percent chance that a prospective customer will go bankrupt within the next half year. The customer orders 1,000 irons and asks for 6 months” credit. Should you accept the order? Assume […]
QUESTION DuPont Analysis. Torrid Romance Publishers has total receivables of $3,000, which represent 20 days” sales, Total assets are $75,000, the firm”s net profit margin is 5 percent. Find the firm”s ROA and asset turnover ratio. Solution: Total Receivables =$3000 Total Assets =$75000 Days Sales Outstanding = (Account Receivables/Sales)*365 So, Sales = $3000*365/20 = $54750 […]
QUESTION Dividends and Taxes. Good Values, Inc., is all-equity financed. The total market value of the firm currently is $100,000 and there are 2,000 shares outstanding.a. The firm has declared a $5 per share dividend. The stock will go -dividend tomorrow. At what price will be the stock sell today? Ignore taxes.b. Now assume that […]
QUESTION Analyzing a Portfolio You want to create a portfolio equally as risky as the market, and you have $1,000,000 to invest. Given this information, fill in the rest of the following table: Asset Investment Beta Stock A ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION The cash flow data of Palomba Pizza Stores for the year ended December 31, 1999, are as follows: Cash payment of dividends $ 35,000 Purchase of land 14,000 Cash payments for interest 10,000 Cash payments for salaries 45,000 Sale of equipment 38,000 Retirement of common stock 25,000 Purchase of equipment 30,000 Cash payments to […]
QUESTION The Best Manufacturing Company is considering anew investment. Financial projections for the investment are tabulated here. The corporate tax rate is 34 percent. Assume all sales revenue is received in cash, alloperating costs and income taxes are paid in cash, and all cash flows occur at theend of the year. All net working capital […]
QUESTION Halcyon Lines is considering the purchase of a new bulk carrier for $8 million. The forecasted revenues are $5 million a year and operating costs are $4 million. A major refit costing $2 million will be required after both the fifth and tenth years. After 15 years, the ship is expected to be sold […]
QUESTION The Bank of Tiny town has two $20,000 loans with the following characteristics: Loan A has an expected return of 10 percent and a standard deviation of returns of 10 percent. The expected return and standard deviation of returns for loan B are 12 percent and 20 percent, respectively. a. If the correlation between […]
QUESTION What is organizational structure and what are organizational controls? What are the differences between strategic controls and financial controls? What is the importance of these differences? An organizational structure defines how activities such as task allocation, coordination and supervision are directed towards the achievement of organizational aims. It can also be considered as the […]
QUESTION MNO, Inc., a publicly traded manufacturing firm in the United States, has provided the following financial information in its application for a loan. All numbers are in thousands of dollars. Assets Liabilities and Equity Cash $20 ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
