QUESTION Rework Problem 15-10 using a spreadsheet model. After completing Parts a through d, respond to the following: If Bowers customers began to pay late, collections would slow down, thus increasing the required loan amount. If sales declined, this also would have an effect on the required loan. Do a sensitivity analysis that shows the […]
QUESTION On June 30, 2008, Thorpe Companys total current assets were $250,000 and its total current liabilities were $125,000. On July 1, 2008, Thorpe issued a short-term note to a bank for $25,000 cash. Required: 1. Compute Thorpes working capital before and after issuing the note. 2. Compute Thorpes current ratio before and after issuing […]
QUESTION On January 1, the cost of borrowing Hong Kong dollars (HKD) for one year was 18 percent. During the year the U.S. inflation rate was 2 percent and the Chinese inflation rate was 9 percent. The exchange rate on January 1 was HKD7/$. On December 31, the exchange rate was HKD8/$. If you borrowed […]
QUESTION Consider the effects of diversification, how should Sarah respond to the suggestion that you invest 100% of your 401(k) account in East Coast Yachts stock? Diversification is critical to investors as it prevents bunching risk. Considering own just one stock in your 401(k). It could go up or could down, it could even go […]
QUESTION Laiho Industries 2007 and 2008 balance sheets (in thousands of dollars) are shown.a. Sales for 2008 were $455,150,000, and EBITDA was 15% of sales. Furthermore, depreciation and amortization were 11% of net fixed assets, interest was $8,575,000, the corporate tax rate was 40%, and Laiho pays 40% of its net income in dividends. Given […]
QUESTION Here is the considered 2011 balance sheet for Skye Computer Company ( in thousands of dollars):Current Assets: 2000; Net Fixed Assets: 3000; Total Assets; 5000.Current liabilities: 900; long term debt: 1200; Preferred stock(10000 shares): 250; common stock (50000 shares): 1300; retained earnings: 13¦ Cost of common equity from retained earnings: Cost of common equity(DCF) […]
QUESTION Berkeley, Inc. just paid an annual dividend of $2.60 per share on its stock. The dividends are expected to grow at a constant rate of 4.5 percent per year, indefinitely. If investors require an 11 percent return on this stock, what will the price be in 12 years? ion asks what the price of […]
QUESTION Part I. Multiple Choice (2.5 point each, 50 points in total) During the growing season a corn farmer sells short corn futures contracts in an amount equal to her crop. If upon harvesting and selling her crop she maintains the contracts, she is then considered a: (a) Hedger (b) Speculator (c) Arbitrager (d) None […]
QUESTION Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding Solution: XIRR 5.3624% 01-01-2010 -135000 01-02-2010 2215.1 01-03-2010 2215.1 01-04-2010 2215.1 01-05-2010 2215.1 01-06-2010 2215.1 […]
QUESTION A mining company is deciding whether to open a strip mine, which costs 2 million. Net cash inflows of 13 million would occur at the end of Year 1. The land must be returned to its natural state at a cost of $12 million, payable at the end of Year 2. a. Plot the […]
