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Finance Questions and Answers May 5, 2016

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Air Spares is a wholesaler that stocks engine components and test equipment for the commercial aircraft industry. A new customer has placed an order for eight high-bypass turbine engines, which increase fuel economy. The variable cost is $2.4 million per unit, and the credit price is $2.725 million each. Credit is extended for one period, and
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Suppose that on 2 March Commodity Inc. enter into a European options contract to buy 100 Troy ouro of sive from Metal Inc, both sidom. So Muches W.7V ounce. The price of the option in 0.01 Troy ounce of liver if prion of the silver on 30 March is 07/Troy ouro, than 1. Metal Inc. will be the long position holder in this option O2. Commodity Ino
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We are evaluating a project that costs $2,070,000, has a 7 -year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 93,400 units per year. Price per unit is $38.73, variable cost per unit is $23.85, and fixed costs are $854,000 per year. The tax rate is 23 percent,
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1. Measuring stand-alone risk using realized (historical) data Returns earned over a given time period are called realized retums. Historical data on realized returns is often used to estimate future results Analysts across companies use realized stock retums to estimate the risk of a stock Consider the case of Blue Lama Mining Inc (BLM): Five
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You are analyzing the following two mutually exclusive projects and have developed the following information: Year Project A Cash Flows Project B Cash Flows $-85,596 $-78,178 $30,386 $25,496 $40,557 $33,539 $26,837 $27,479 What is the incremental IRR (i.e., crossover rate)? (Answer in percentage terms and round answer to 2 decimals)
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Consider the following abbreviated financial statements for Cabo Wabo, Inc.: CABO WABO, INC. Partial Balance Sheets as of December 31, 2018 and 2019 2018 2019 2018 2019 Assets Liabilities and Owners' Equity Current assets $3,043 $ 3,235 Current liabilities $1,327 $ 1,958 13,928 14,499 Net fixed assets Long-term debt 7,233 8,287 CABO WABO, INC.
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Financial Data for Fedrekoko, Inc. (Unless otherwise noted, all data is for December 31, 2022) Assume a 360 -day year and assume that the only accounts on the balance sheet are those listed below. Fill in this chart with the data provided and then answer questions 47,48,49 and 50 . NOTE: When you create the balance sheet associated with the data
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Please write the anwser correctly! A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a Treasury- bill money market fund that yields a rate of 8%. The probability distribution of the risky funds is as follows: Expected return Standard
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(Calls and Stock: The Covered Call) 1 = 100 x {S, - 165.13 - Max (0, S.-170) +6} Breakeven: S.-C. 161 Maximum profit: Maximum loss (if S, = 0): Profit from call = Profit from stock = Overall profit = Graph here Profit from Brategy Profit from Krategy Overall and by Component 1.000 SOO Fis) Fici -500 -4000 ME Price Oplocions EPICA Mondo (Calls and
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Preferred stock generally has a higher required return than common stock because common shareholders get to vote and have preemptive rights not available to preferred shareholders. Select one: True False
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Multiple Choice Question 64 Your answer is incorrect. Try again. Five years ago, Shirley Harper bought a 10-year bond that pays 8 percent semiannually for $981.10. Today, she sold it for $1,067.22. What is the realized yield on her investment? (Round to the nearest percent.) 1096 7% o 8% o 11%
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A Forward Rate Agreement contains an agreed interest rate of 5.75% on a 6-month loan. If settled at the time of borrowing, what amount would the borrower pay or receive on an $850,000 loan if the prevailing 6-month interest rate is 4.25%? $11,500.76 receipt $12,056.74 receipt $12,056.74 payment $12,230.22 payment $12,230.22 receipt $11,500.76
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YYJ Corp. will pay its first ever dividend in 4 years' time of $2.75, and will grow it by 8%. Your required rate of return is 12%. What is your estimate of the price of the stock? 65.25 Selecte $48.93 68.75
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This exercise uses the data in Table 1. On February 15, 1994, a company wanted to sign a forward contract to purchase a five-year treasury bond, with a coupon rate of 5.75% and a par value of $100 within two years. Table : Semi-annually Compounded Yield Curves Panel A : Yield Curve Date 1994-02-15 1994-02-16 1994-02-17 1994-02-18 1994-02-22

Which of the following statements is most accurate? O Private placements can generally bring in funds faster than is the case with public offerings. O Private placements are convenient for issuers, but the convenience is offset by higher flotation costs. The SEC requires that all private placements be handled by a registered investment banker. O
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Cellular Access, Inc. is a cellular telephone service provider that reported net income of $250 million for the most recent fiscal year. The firm had depreciation expenses of $106 million, capital expenditures of $214 million, and no interest expenses. Working capital increased by $10 million. Calculate the free cash flow for Cellular Access for
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Question 1 Summit Record Company is negotiating with two banks for a $147,000 loan. Fidelity Bank requires a compensating balance of 30 percent, discounts the loan, and wants to be paid back in four payments. Southwest requires a c balance of 15 percent, does not discount the loan, but wants to be paid back in 12 monthly installments. stated rate
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Both pictures are the same question. Please answer part B & C for thinbs up. b. What molld be the etfective ont of the toan if the note resuins dicuent itcerest? Gifts Galore Inc. borrowed $1.6 million from National City Bank. The loan was made at a simple annual interest rate of 12% a year for 3 months. A 25% compensating balance requirement
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Last year Leather Boot, Inc. had investments in Paris worth 560,000 euros. At that time, the euro was worth $1.14. Today the euro is trading for $1.10. What is the gain or loss in value of the inventory expressed in dollars and in euros? Use a minus sign to enter the amount as a negative value. Round your answers to the nearest whole number. If
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How to solve ork 8 Part 1 of 3 Points: 0 of 4 Determining values - Convertible bond Craig's Cake Company has an outstanding issue of 1 5 - year convertible bonds with a $ 1 , 0 0 0 par value. These bonds are convertible into 8 5 shares of common stock. They have a 1 1 % annual coupon interest rate, whereas the interest rate on straight bonds of
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The Optical Scam Company has forecast a sales growth of 20 percent for next year. The current financial statements are shown here: Using the equation from the chapter, calculate the external financing needed for next year. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Construct the firm's pro
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Company Q's current return on equity (ROE) is 14%. The firm pays out 60 percent of its earnings as cash dividends. (payout ratio = 60). Current book value per share is $70. Book value per share will grow as Q reinvests earnings. Assume that the ROE and payout ratio stay constant for the next four years. After that, competition forces ROE down to
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1. The Moore company has the following financing outstanding. What is the WACC for the company? (30 points) Debt: 50,000 bonds with a coupon rate of 5.7%, 20 years to maturity, semi-annual coupon payments and a current price quote of 106.5. 200,000 zero coupon bonds with a price quote of 17.5 and have 30 years to maturity. Preferred stock: Common
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As an investor looking to buy 100 Dell shares in August at $20 each through an option contract. The premium for the contract is 1.5$ What type of expectations does the investor have? What type of investor is he? As a hedger should he enter into a long call contract or a Short Put contract and why? Explain what it means and why you chose that.

question 3. Calculating interest rates The real risk-free rate (r) is 2.8% and is expected to remain constant. Inflation is expected to be 3% per year for each of the next five years thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t1)%, where t is the security's maturity. The liquidity premium (LP) on all Dare
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Your finance group has been holding meetings to address the forecast decrease in revenues. The action plans include your lender's proposal to manage cash collections through the use of a bank lockbox for all accounts receivable. The reasoning is cash will be deposited directly to the Companys account and therefore reduce interest costs on

Need step by step solution please thanks The following table is an excerpt from a yield curve for a loan of 1.000 repaid by a single payment at the end of the indicated term: Term of Loan (Years) Effective per Annum Interest Rate (%) 1.50 1.73 1.96 2.18 2.38 4 Sam borrows 1,000 from Lisa for one year, 1,000 from Susan for three years and 1,000
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Question-01 w worst using NPV. (9-10 Payback and NPV Neil Corporation has three projects under consideration. The cash flows for each of them are shown in the following table. The firm has a 16% cost of capital. Project A Project B Project C Initial investment (CF) $40,000 $40,000 $40,000 Year (1) Cash inflows (CF) 1 2 3 $13,000 13,000 13,000
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The U.S. Corporate Tax Rate Schedule is shown below. EXHIBIT 11.6 U.S. Corporate Tax Rate Schedule in 2016 Just like the tax system for individuals, the tax system for corporations in the United States is progres- sive, with marginal tax rates ranging from 15 percent to as high as 39 percent. Taxable Income More But Not Than More Than Tax Owed $0
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Seiko's current salary is $100,500. Her marginal tax rate is 32 percent, and she fancies European sports cars. She purchases a new auto each year. Seiko is currently a manager for Idaho Office Supply. Her friend, knowing of her interest in sports cars, tells her about a manager position at the local BMW and Porsche dealer. The new position pays

Assume you purchase this property without any financing. What is your unleveraged IRR (using the base case of 3% NOI growth and 5.25% Exit Cap Rate)? Using the NCF from years 1 through 5 as presented, how much would you be willing to invest at Year 0 if you wanted to earn a 10% IRR on this investment? Investment Analysis $ 5,400,000.00 3.00% Year
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Stora Enso is a Finnish pulp and paper manufacturing company. It discloses in its 1999 consolidated Annual Report, the following items: Excerpted from the Consolidated balance sheet Assets mill. 1999 1998 () Shares, associated companies 165.5 334.1 Shares, other companies 280.4 128.8 In the notes to its financial statements, the Stora Enso

In recent years, the United States has accused China of manipulating the yuan so as to gain an unfair competitive advantage in global trade. The United States has argued that China has: a. maintained an overvalued yuan that makes U.S. exports to China cheaper b. maintained an undervalued yuan that makes U.S. exports to China more expensive c.