QUESTION Its competition for information that makes securities markets efficient. Is this statement correct? Explain. This is a true statement. To make markets efficient means that current prices for assets reflect ALL known and important information regarding what the asset should be priced at. Because there are arbitrage opportunities in finding the “real” price of […]
QUESTION 4. First National Bank of Elderidge borrowed $550,000 from the Federal Reserve Bank of St. Louis last Friday. The bank received short-term adjustment credit for three days and plans to repay its loan at the close of business Monday. Show the proper accounting (T-account) entries for this transaction T-account entries for the friday transactin: […]
QUESTION Eagle Sales Company owns a warehouse, subject to a mortgage obtained from First National Bank. Separately, Eagle and First National obtain insurance policies from Good Hands Insurance, Inc., to cover the warehouse. Later, Eagle sells the property to Interstate Distribution Corporation but keeps the I dont believe this happens typically. Usually there is only […]
QUESTION An imaging center has the following information:Revenue per test: $300Variable cost per test: $150Total fixed costs: $300,000Calculate the total revenue dollars needed to break-even. To find our Break Even point we must employ the following profit equation: Total Units x (Sales Price Variable Cost) Fixed Costs = profit To find the break even UNITS […]
QUESTION What is the current yield on the following bond?Par value $1000Coupon rate 8%Years to maturity 12Market interest rate 7%Market price $1080a. 80/1000 = 8.7%b. 70/1080 = 6.5%c. 70/1000 = 7.6%d. 80/1080 = 7.4%e. (8 * 7)/1000 = 5.6% Yield is a figure that shows the return you get on a bond. The simplest version […]
QUESTION Thomson Electric Systems is considering a project that has the following cash flow and WACC data. What is the projects NPV? Note that a projects projected NPV can be negative, in which case it will be rejected. WACC = 10% To find NPV, we must find the PV of our 3 CFs discounted at […]
QUESTION what information does a firms balance sheet provide to the viewing public?a. a complete listing of all of a firms cash receipts and cash expenditures for a defined period of timeb. a report of revenuse and expenses for a defined period of timec. a report of investments made and their cost for a sp […]
QUESTION Supernormal Growth [LO1] Eva Corp. is experiencing rapid growth. Dividends are expected to grow at 25 percent per year during the next three years, 15 percent over the following year, and then 8 percent per year indefinitely. The required return on this stock is 13 percent, and the stock currently s Here is how […]
QUESTION a project would be acceptable ifa. the net present value is positiveb. the payback is greater than the discounted equivalent annual annunituc. the equivalent annual annunity is greater than or equal to the firms discount rated. the profitability index is greater than the net present value a) is correct. Profitability Index (PI) = (Net […]
QUESTION Net earnings before deducting minority share of earnings is utilized in the following ratios, since noncontrolling interests are included in the base. Which ratio is an exception to this statement?a. net profit marginb. return on assetsc. return on equityd. return on investmente. none of the answers The answer is e) because all four of […]
