QUESTION 1.Omaha Plating Corporation is considering purchasing a machine for $1,500,000. The machine will generate a constant after-tax income of $100,000 per year for 15 years. The firm will use straight-line (SL) depreciation for the new machine over 10 years with no residual value. What is the payback period for the new machine, under the […]
QUESTION FINC400 week 3 quiz The quiz is accessible once and is available for the duration of 1.5-hours. Please do not exit from the quiz unless it has been completed, as it will not be accessible again. Question 1 of 25 4.0 Points As a general rule, it is desirable to finance the permanent assets, […]
QUESTION a. Plot the following risky portfolios on a graph: Portfolio A B C ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION The following table tracks the main components of working capital over the life of a four-year project. 2000 2001 2002 2003 ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
QUESTION What are the main disadvantages of the corporate form of organization? The main disadvantage of a corporate form of organization is the complexity in formation of a corporation. The formation of a corporation form of a business organization requires the fulfillment of a lot of legal formalities. Moreover there is a distinction of ownership […]
QUESTION Grunewald Industries sells on terms of 2/10, net 40. Gross sales last year were $4,562,500, and accounts receivable averaged $437,500. Half of Grunewald”s customers paid on the 10th day and took discounts. What are the nominal and effective costs of trade credit to Grunewald”s non discount customers? (Hint: Calculate sales/day based on a 365-day […]
QUESTION What are the advantages of matching the maturities of assets and liabilities? What are the disadvantages? The matching approach for meeting the financing needs of the company states that fluctuating assets should be financed by the short term sources of financing while the long term i.e. fixed assets of the business should be financed […]
QUESTION Buena Terra Corporation is reviewing its capital budget for the upcoming year. It has paid a $3.00 dividend per share (DPS) for the past several years, and its shareholders expect the dividend to remain constant for the next several years. The company”s target capital structure is 60 percent equity and 40 percent debt; it […]
QUESTION The Rogers Company is currently in this situation: (1) EBIT = $4.7 million; (2) tax rate, T = 40%; (3) value of debt, D = $2 million; (4) rd = 10%; (5) rs = 15%; (6) shares of stock outstanding, n0 = 600,000; and stock price, P0 = $30. The firm”s market is stable, […]
QUESTION At year-end 2002, total assets for Bertin Inc. were $1.2 million and accounts payable were $375,000. Sales, which in 2002 were $2.5 million, are expected to increase by 25 percent in2003. Total assets and accounts payable are proportional to sales and that relationship will be maintained. Bertin typically uses no current liabilities other than […]
