QUESTION Question 1If you invest $25,582 today at an interest rate of 3.5 percent, compounded annually, how much money will you have in your savings account in 28 years?Question 2The Zindler Company currently has a centralized billing system. Payments are made by all customers to the central billing location. It requires, on average, four days […]
QUESTION Question 1If a firm has sales of $42,791,000 a year, and the average collection period for the industry is 40 days, what should this firms accounts receivable be if the firm is comparable to the industry?Question 2Temple Square Inc. reported that its retained earnings for 2005 were $490,000. In its 2006 financial statements, it […]
QUESTION Assignment 4: HR Training ClassImagine that you are a member of the HR department of a small retail company and upper management has asked you to create a new employee customer service training class for all new employees. Write a six to seven (6-7) pages paper in which you:1. Justify the use of a […]
QUESTION Consider a firm whose only asset is a plot of vacant land, and whose only liability is debt of $15 million due in one year. If left vacant, the land will be worth $10 million in one year. Alterna- tively, the firm can develop the land at an upfront cost of $20 million. The […]
QUESTION Zelnor, Inc., is an all-equity firm with 100 million shares outstanding currently trading for $8.50 per share. Suppose Zelnor decides to grant a total of 10 million new shares to employees as part of a new compensation plan. The firm argues that this new compensation plan will motivate employees and is a better strategy […]
QUESTION Schwartz Industry is an industrial company with 100 million shares outstanding and a market capitalization (equity value) of $4 billion. It has $2 billion of debt outstanding. Management have decided to delever the firm by issuing new equity to repay all outstanding debt. a. How many new shares must the firm issue? b. Suppose […]
QUESTION Betas and Leverage Suppose drug retailer CVS has an equity beta of 0.80 and a debt-equity ratio of 0.10. Estimate its asset beta assuming its debt beta is zero. Suppose CVS were to increase its leverage so that its debt-equity ratio was 0.50. Assuming its debt beta were still zero, what would you expect […]
QUESTION Suppose a toy manufacturer is faced with the following collection of investment projects: a. Opening a retail outlet. b. Introducing a new line of dolls. c. Introducing a new action gure in an existing line of action gures. d. Adding another packaging line to the production process. e. Adding pollution control equipment to avoid […]
QUESTION Your oldest daughter is about to start kindergarten at a private school. Tuition is $10,000 per year, payable at the beginning of the school year. You expect to keep your daughter in private school through high school. You expect tuition to increase at a rate of 5% per year over the 13 years of […]
QUESTION The all-equity financed Lasar plc has a Beta of 0.8. What rate of return should it seek on new investment: (i) with similar risk to existing activities? (ii) with 25 per cent greater risk compared to existing activities? (iii) with 25 per cent lower risk compared to existing activities? The risk-free rate of interest […]
