QUESTION I.T. Canwait, Inc., a U.S.-based multinational, has just soldcans to a west German company, I.C. Spots, Inc. Spots will pay forthe order in 60 days. I.T. Canwait is now exposed to which kind ofrisk:a. transactionb. translationc. operatingd. financial I.T. Canwait, Inc., a U.S.-based multinational, has just sold cansto a west German company, I.C. Spots, […]
QUESTION A company collects 60% of its sales during the month of thesale, 30% one month after the sale, and 10% two months after thesale. The company expects sales of $10,000 in August, $20,000 inSeptember, $30,000 in October, and $40,000 in November. How muchmoney is expected to be collected in October?a) $ Sales collectionprocedure: 60% […]
QUESTION Strategic Systems expects to have a net income of $800,000 during the next year. Its target and current capital structure is 40% debt and 60% common equity. The Director of Capital Budgeting has determined that the optimal capital budget for next year is $1.2 million. If strategic uses the res Next years Expected Net […]
QUESTION The primary advantage that pledging accounts receivable providesis:a. the flexibility it gives to the borrowerb. that the financial institution bears the risk of collectionc. the low cost as compared with other sources of short-termfinancingd. that the financial institution services the accounts UnderPledging, the borrower simply offers his accounts receivable ascollateral for a loan obtained […]
QUESTION Shawn is considering opening a music store. He wants to estimate the number of CDs he must sell to break even. The CDs will be sold for $13.98 each, variable operating costs are $10.48 per CD, and annual fixed operating costs are $73,500. How much EBIT will Shawn realize if he sells the minimum […]
QUESTION Last year, when the stock of Shipping Enterprises was sellingfor $48 a share the dividend yield was 4.5 percent. Today, thestock is selling for $46 a share. What is the current requiredreturn on this stock if the company maintains a constant dividendgrowth rate of 3 percent? Last years selling price = $48 Dividend yield […]
QUESTION Problem: 7-3Bond ValuationNungesser Corporations outstanding bonds have a $1,000 parvalue, a 9% semiannual coupon, 8 years to maturity, and an 8.5%YTM. What is the bonds price?Problem 7-18Bond Returns: This answer is in the back of the bookbut I dont just want that, I need to know how to get the a Par Value of […]
QUESTION Explain how capital budgeting decisions are derived Capital budgetin or investmentappraisal is the palnning process used to determine wheter afrims long term investments such as newmachinery, replacement machinery, new palnts andreasearch development prijects are worthpursuing. Popular methods of capitalbudgeting include for decision makings are:- 1) Net Present Value (NPV) 2) Internal rate of return […]
QUESTION Auto Loans R Them loans you $24,000 for four years to buy acar. The loan must be repaid in 48 equal monthly payments. Theannual interest rate on the loan is 9 percent. What is the monthlypayment?a. $500.92b. $543.79c. $563.82d. $597.24 Present Value of LoanAmount (PV) $24,000 Annual Interest Rate onLoan (RATE) 9% Number of […]
QUESTION A bank loan agreement calls for an interest rate equal to prime rate plus 1%. If prime rate averages 9% and non-interest-earning compensating balances equal to 10% of the loan must be maintained, what are the APR and the APY of the loan assuming annual payments? Annual Percentage Rate(APR): In the context of credit […]
