QUESTION what are some factors a finance manager considers in choosing an appropriate discount rate.? thank you The discount rate is an interest rate used to determine how much future cash flows are worth today. Discount rates are used in valuation analysis when cash flows are expected to receive over long-periods of time. The discount […]
QUESTION Annas, Inc. just purchased some equipment at a cost of $20,000. What is the accumulated depreciation of this equipment after year 3 if the company applies a 3 year MACRS depreciation schedule?3 Year MACRSYear 1 2 3 4Depreciation % 33.33% 44.45% 14.81% 7.41%Answera.$1,482b.$15,720c.$18,518d.$2,962 Calculation of depreciton expense for three years as follows. Year Asset […]
QUESTION A pro forma financial statement is one that:Answera.is expressed as a percentage of the total sales of the firmb.projects future years operationsc.reflects the past and current operations of the firmd.is expressed relative to a chosen base years financial statement A pro forma financial statement is one that: Answer a. is expressed as a percentage […]
QUESTION Joe-Tech has 2 mutually exclusive projects of equal size. Project A is rather risky and has an NPV of $7 million at a risk adjusted discount rate. Project B is quite safe and has an NPV of $5 million at a risk adjusted discount rate. What factor(s) should the company consider in choosing between […]
QUESTION The rate of inflation for the coming year is expected to be 3 percent and the rate of inflation in Year 2 and thereafteris respected to remain constant at some level above 3 percent. Assume that the real risk-free rate r* is 2 percent for all maturities and the expectations theory fully explains the […]
QUESTION The Radek company uses cost-plus pricing with a 30% mark-up. The company is currently selling 80,000 units at $65 per unit. Each unit has a variable cost of $47. In addition, the company incurs $240,000 in fixed costs annually. If demand falls to 40,000 units and the company wants to continue to cha Costs […]
QUESTION What is the yield to maturity on a 10-year, 9 percent annual coupon, $1,000 par value bond that sells for $887.00? That sells for $1,134.20? What does the fact that a bond sells at a discount or at a premium tell you about the relationship between r and the bonds coupon rate?What is the […]
QUESTION IBIS Corporation has had dividends grow from $2.50 per share to $5.00 per share over the last 10years (the $5.00 per share dividend was paid yesterday; that is, D0 = $5.00). This compounded annualgrowth rate in dividends is expected to continue into the future forever. If the current market price of As it is […]
QUESTION A Corporation sold an issue of 15 year $1000 par bonds to build new buildings. The bonds pay 6.85% interest, semi-annually. Todays required rate of return is 8.35%. How much should these bonds sell for today rounded to the nearest $1?Please calculate out specifically. I am new to these calculatio According to the given […]
QUESTION 0.4) At its present level of operations, a small manufacturing firm has total variable costs equal to 65% of sales and total fixed costs equal to 20% of sales. If sales change by $1.00, operating income will change by The contribution margin as a percentage of total sales is referred to as contribution margin […]
