QUESTION You own an unused gold mine that will cost $100,000 to reopen. If you open the mine, you expect to be able to extract 1,000 ounces of gold a year for each of three years. After that, the deposit will be exhausted. The gold price is currently $500 an ounce, and each year the […]
Date: September 2nd, 2020
QUESTION Will the NPV amount determined in the capital budgeting process be the same amount as that which actually occurs after a project is undertaken? Why or why not? calculated before the project is undertaken can be equal to the Net Present Value after the project has been undertaken. However it is difficult to estimate […]
Date: September 2nd, 2020
QUESTION Why is it generally incorrect to consider interest charges when computing a projects net cash flows? eady considered while calculating the cost of debt which is included in the weighted average cost of capital. The interest payments are not included in the calculation of projects net cash flows because their inclusion will lead to […]
Date: September 2nd, 2020
QUESTION Why do analysts care about the current cost of long-term debt when estimating a firms cost of capital? capital to give a more real view of the cost of capital of the firm. The current cost of long term debt is the cost at which the firms will be able to get more long […]
Date: September 2nd, 2020
QUESTION Making dropping a product and product-mix decisions Members of the board of directors of Safe Zone have received the following operating income data for the year ended May 31, 2012: SAFE ZONE Income Statement For the Year Ended May 31, 2012 Product Line Total Industrial Systems ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
Date: September 2nd, 2020
QUESTION 1. The current exchange rate between Canada and Britain is 0.5268 per Canadian dollar. The three month forward rate between the British pound and the Canadian dollar is 0.4968 per dollar. What is the percentage difference between current three-month Canadian and British interest rates? 2. An Italian sports car is selling for 70 000 […]
Date: September 2nd, 2020
QUESTION Use of excess cash one option a firm usually has with any excess cash is to pay its suppliers more quickly. What are the advantages and disadvantages of this use of excess cash? pportunity of investing the excess cash in short term investments and earning income on it. The cash cycle of the firm […]
Date: September 2nd, 2020
QUESTION 1. Why are secured loans an important method of lending for financial institutions? 2. If more customers want to borrow funds at the prevailing interest rate, a financial institution can increase its profits by raising interest rates on its loans. Is this statement true, false, or uncertain? Explain your answer. 3. Why is being […]
Date: September 2nd, 2020
QUESTION Ritchie Marble Company has total assets of $12,899,450, sales of $18,174,652, and net income of $4,589,774. Management expects sales to grow by 25 percent next year. All assets and costs (including taxes) vary directly with sales, and management expects to maintain a payout ratio of 65 percent. Calculate Ritchies EFN. Concept: External fund needed […]
Date: September 2nd, 2020
QUESTION 1. Compute the price of a share of stock that pays a $1- per-year dividend and that you expect to be able to sell in one year for $20, assuming you require a 15% return. 2. After careful analysis, you have determined that a firm s dividends should grow at 7% on average in […]
Date: September 2nd, 2020
