Finance Questions and Answers December 27, 2021

4 1 97.25 2 94.53 5 87.53 89.23 The above table shows the price per 100 face value of several riskfree, zerocoupon bonds. What is the yield to maturity of the threeyear, zerocoupon, riskfree bond shown Maturity (years) Price 3 91.83

Abrams builds a portfolio by investing in two stocks only: Google (GOOG) and Motorola (MSI). According to the CAPM, the expected risk premium (i.e., the expected return minus the risk-free rate) of GOOG is 8.82% and the expected risk premium of MSI is 5.79%. The beta of GOOG is equal to 1.15. If Abrams puts 80% of his money in GOOG stock and 20%

Your firm plans on issuing 10,000 pure discount (no-coupon) notes with two years to maturity. Each note has a face value of $1000. The current yield to maturity on two-year notes like these is 10% per annum. You believe that if the Eurodollar futures yield changes by 10 basis points, the change in the required rate of return (yield to maturity) on

The CFO of MediSearch plc believes that investing into a project which will develop a new drug for fighting the flu virus, promises a longterm annual return of 8. The expected return of the market index is RM 8.2, the volatility of the market index is M 11.7, and the riskfree asset earns Rf 2.8. The CFO has studied similar projects of other

How much interest would Aleem save if he paid off his mortgage over 15 years instead of 30 years His mortgage is 100 000 at six percent interest calculated semiannually. 8. Julian is a student relying on student loans. He feels he would like to borrow an extra 4000 each year for the next four years to take vacations to recover from studying.

Sara will have $850,000 when she retires. If she sets up a pay out annuity for 30 years in a account pay 8% interest. How much could the annuity provide each month?

The illustration below provides a diagram of a lifting platform commonly found in garages. The platform's vertical movement is controlled by two levers, each pivotally connected to a nut. The nut on the left features a square, right-handed thread, while the one on the right has a similar thread but is oriented to the left. The screw is designed to

bearing hut Devers J k E nut platform Coupling Gearbox bearing Electric Motor

From the diagram, derive the transfer function (s) T(s) V(s) and V(8) T T Permanent magnet DC motor model armature voltage (V) R, armature resistance (Q), armature current (A) back electromotive force voltage (V) armature inductance (H) rotation speed (rads) J moment of inertia (kg.m) Tmotor torque (Nm) K, back electromotive force coefficient

A frame is loaded with forces as shown in the figure below. Draw the FBD of the frame and determine the magnitudes and directions of the reaction forces at the frame supports. 30 kN 3 kN 2m 15 kN 2 m 2 m E 2 m 2 m 45 45 10 kN 7

A bond currently sells for 1,110, which gives it a yield to maturity of 5. Suppose that if the yield increases by 25 basis points, the price of the bond falls to 1,065. What is the modified duration of this bond (Do not round intermediate calculations. Round your answer to 4 decimal places.) X Answer is complete but not entirely correct. 17.0270

Johnny purchased a beach house in California and he took out a $200,000, 30-year loan with a 7% interest (paid annually). He just made the payment. Given the financial situation in world markets he has decided to pay the mortgage off by repaying the outstanding balance. What is the payoff amount if: 1. There are ten years left on the mortgage 2.

4. Assume that a publicly traded company is expected to experience supernormal growth of 20 for the next 4 years, then to return to its longrun constant growth rate of 6. The dividend paid yesterday was 2.00. What is the stocks value under these conditions The required rate of return by the investor is 13. (30 points),5. Given the information from

You have two assets, A and B, with different possible payoffs each. The payoffs and the corresponding unconditional probabilities are given in the table below. The assets are independent of each other. State Al State A2 State A3 Payoff A Probability A 20 10 1 0.5 State B1 0.5 State B2 99 Payoff B Probability B 10 4.5 0.5 95.5 (a) Calculate the 1

D L 2 1.) Firehouse Tree Services has asked you to estimate the companys WACC. You have obtained the following information. The firms non callable bonds mature in 20 years, have an 8 annual coupon, a par value of 1,000 and a market price of 1,050. The Companys tax rate is 40 The risk free rate is 4.5, the market risk premium is 5.5 and the stocks

The spot rate is 1.1 and interest rates are 2 and 3 What should the 1year forward rate equal

The price of Jane's Book Co. is now $85. The company pays no dividends. Ms. Johnson expects the price four years from now to be $120 per share. Should she buy Jane's Book Co. stock if she desires a rate of return of 9%? Explain. (Hint: Evaluate this situation using justified price (intrinsic value). In this case ignore dividends.) 1) The justified

Your factory has been offered a contract to produce a part for a new printer. The contract would last for 3 years and your cash flows from the contract would be 4.84 million per year. Your upfront setup costs to be ready to produce the part would be 7.84 million. Your discount rate for this contract is 8.1. a. What does the NPV rule say you should

The temporary tax difference is due to a 70,000 sale that could be recognized for GAAP purposes in 2021 but it had to be recognized for tax purposes on a prorata basis through 2023 Sheett a. Required b. Notes Using the materials in the book and notes, fill in the following tables and determine the d. following Difference in GAAP and Tax Income

The following are the accounts of United Forward Trading Limited, a company that engages in Shipping and container services for the years ended 31 December 2014 and 215 respectively. Statements of Comprehensive Income for the Years ended 31 December 2015 and 2014 Profit before interest and Tax Interest Expenses Profit before Tax Taxation Profit

Wowzer Inc. had the following stock returns between 2018 and 2021. Stock Return Year 2021 2020 2019 2018 What was the stocks standard deviation over this fouryear period 7 19 15 9

Managers of Hardin Motor company have asked you to help them refine the estimate of their cost of capital. What you know is the following: a. The liability side of their most recent balance sheet looks like this: i. Accounts Payable $213,750 ii. Accrued Expenses $9,680 iii. Short term Bank Loan $10,000 iv. Total Current Liabilities $233,430 v.

2. Using the table below, calculate the cost of equity that accounts for the risk of the company operating internationally but still includes the effects of debt. 10Year Treasury Note Equity Risk Premium of SP 500 Country Adjusted Equity Risk Premium Regression Beta Unlevered Beta 4.01 4.24 6.26 0.85 0.44

The impulse response of a system is given as h(t) 5u(t) a) Is this system memoryless Why b) Is this system BIBO stable Why

A study was devised to show the relationship between prevalent hypertension and prevalent cardio vascular disease (CVD) in a heart study among a sample of 3986 participants. The following results were obtained for prevalent hypertension and prevalent CVD. No hypertension Hypertension Total No CVD 2655 750 3405 Calculate the following and interpret

Consider the following base case capital Project Unit Price Annual unit sales Variable cost per unit Investment in fixed capital Investment in working capital Project life Depreciation (straight line) Expected salvage value Tax rate Required rate of return (a) Calculate the incremental operating cash flows. Cash Flows (c) Calculate the NPV. TNOCF

In order to calculate the cost of capital, it is necessary to accurately assess the capital structure of a firm. Below is information for estimating the cost of capital for JKM Company. Portion of the Balance Sheet for JKM Company as of January 1, 2016. Long-term debt (bonds, at par) $10,000,000 Preferred Stock (par $5)

In 2019, United's EBITDA was $145, the net increase in Property Plant and Equipment (PPE) was $10 and Depreciation was $25. From year end 2018 to 2019 Accounts Receivable increased $12, Inventory increased $6 and Accounts Payable increased $8. Cash and Short-Term Marketable Securities decreased $9 and Short-Term Debt increased $11. There were no

You are considering buying an asset that has a 3year life and costs 15,000. As an alternative to buying the asset, you can lease it for four payments of 4,000. The first payment is due on the day you sign the lease, and the next three payments are due at the end of each following year. If you can borrow from your bank at 10, should you lease or

York Properties has a discount rate of 9% and is considering two projects. Project A has an IRR of 28% and an NPV of $32 million. Project B has an IRR of 22% and an NPV of $41 million. Which project maximizes shareholder value? Why do the two rules lead to different results?

Lululemon is considering investing in new machinery that will generate sustainably created athleisure shirts and pants. The discount rate is 6, and the initial investment in equipment 10 million. The machinerys economic life is 25 years and the equipment will be depreciated on a straightline basis over the projects life and has no salvage value.

In the financial year of 2022, AXXA Limited had Sales of 125,200 Interest expense of 11,485 Cost of goods sold of 55,700 Selling and administrative expense of 9,285 and Depreciation of 4,555 If the tax rate was 26, what was the companys net income last year Net Income is Dollars

Comez Bank in LA has provided you with the following currency quotes. Bid Euro in Pesos in Euro in pesos You have 15,000. 1.30 .22 7 Ask 1.34 .25 8.25 a. Is there any arbitrage opportunity 2 Marks b. If so, determine the arbitrage profit both in amount and in percentage by showing calculation and steps followed. 3 Marks

You are valuing a company at year end 2023 that has a target capital structure of 60 equity and 40 debt. The estimated cost of equity is 11 and the net cost of debt is 6, respectively. The estimated stream of free cash flow to the firm (FCF) is Values is FCF is 2023 7 500 2024 8 450 2025 9 230 2026 9 800 2027 10 890 The expected nominal growth

A 25year bond has a face amount (and maturity value) of 1,000. It pays semiannual coupons at an 8 (annual) coupon rate. The bond is callable on any coupon date on or after its 10th anniversary, with a 5 call premium. Billy Ruben purchases this bond on its issue date at a price of 1,100. If y is the yield that Billy will earn on the bond if it is

If a company can save 9,000 dollars a year by taking out a 33,000 dollar load at a 5% interest rate how long would it take to return the investment/ payoff the loan?

Calculate how much you would have in 10 years if you saved 5,000 a year at an annual rate of 8 percent with the company contributing 1,250 a year. Use (Exhibit 1A. Exhibit 1B. Exhibit 1C. Exhibit 1D). Note Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and answer to 2 decimai places. Future

After extensive analysis, Alpha Fund has identified three assets, P, Q and R which it believes will exhibit ongoing alpha. It has determined the following rewardtorisk ratios for each of the assets Asset P R Reward to Risk Ratio 0.90 0.18 0.72 Using the Treynor Black model, how would Alpha Fund weight its active portfolio

On February 2nd, 2017, Apple (AAPL) Corporation issued a senior, unsecured bond with a maturity in 2047. The coupon rate on the new bond is 4.25% fixed paying semi-annual interest on February 9th and August 9th. At the time of issue the bond received a AA+ rating from Standard & Poor's and Aa1 rating from Moody's. The amount raised through

Determine the future values utilizing a time preference rate of 9 per cent (i) The future value of Rs 15,000 invested now for a period of four years. (ii) The future value at the end of five years of an investment of Rs 6,000 now and of an investment of Rs 6,000 one year from now. (iii) The future value at the end of eight years of an annual

Using an interest rate of 10 per cent, determine the present value of the following cash flow series End of period 0 16 (each period) 7 8 912 (each period) Cashflow (Rs) 10,000 2,000 1,500 1,600 2,500

Compute the present value for a bond that promises to pay interest of Rs 150 a year for thirty years and Rs 1,000 at maturity. This first interest payment is paid one year from now. Use a rate of discount of 8 per cent.

There are three assets which we label 1,2,3with excess re turns, respectively, of .4, .4 and .8. All variances are equal to 2. The covariance between assets 1 and 3 is equal to zero, while all other covariances are equal to 1. Denote the return of asset i by ri. Find the Minimum Variance Portfo lio (MVP) and the MeanVariance Efficient Portfolio

There are 3 risky assets, and one riskfree. A regression of asset returns on the market portfolio has yielded the following results Asset 1 7,trp0.09 1.5(rm,t RF) 1,t Asset 2 12,trp 0.05 0.4 (rm,t RF) 2,t Asset 3 13,t TF 0.1 1.2 (rm,t RF) 3,t You have estimated the expected returns on the assets as 0.2, 2 0.14, and 3 0.16,

French exporter Dolly is to receive DM 2.0M in 6 months. Exchange rates are Spot FF 3.3974DM 6 months Forward FF 3.3465DM (a) There is fear that DM will depreciate in the near future. What should he do

Alpha Romeo LLC has just recruited you as the junior derivatives analyst of their New Zealands office. You have been assigned to analyse the impact of the following clients futures contracts, who are all trading on the same SP500 Index futures contract of the Chicago Mercantile Exchange (CME). The market value of each futures contract is currently

Peaky Lights LLC is a new asset management boutique offering the general public the opportunity to invest in some derivative instruments such as stock options, as well as a broad range of international stocks. As the specialist in European options, you have been given the task to construct a straddle strategy on a specific stock called Jersey Inc.

Anne and Bill are completing their federal income taxes for the year and have identified the amounts listed here. How much can they rightfully deduct? - AGI: $92,000 - Medical and dental expenses: $12,000 - State income taxes: $6,500 - Mortgage interest: $12,500 - Charitable contributions: $4,000

Use the following table for questions 23 to 26. If the Sur Gas Company venture were expecting Revenues 1,000,000 Cost of Goods Sold 650,000 Administrative Expenses Marketing Expenses Depreciation Expenses 200,000 180,000 100,000 Interest Expenses Tax Rate 33 23. What is the value of the VCRR M 20,000 24. What is the value of CFC 25. What is the

Five years ago, Mr. Hafiz was appointed Chief Executive Officer (CEO) of Vegetable Bank, one of the largest global bank. Mr. Hafiz had a successful track record in senior management in America and was rated as one of the worlds best bankers. The other directors of Vegetable Bank looked forward to his appointment to make a significant strengthening

Suppose that the economy is characterized by the following behavioral equations C 150 0.75YD 1 200 G 200 T 150 Then, What is equilibrium GDP (Y) What is the amount of consumption spending (C) 1. 1350 II. 310 Assume that G is now equal to 250. What is the amount of III. 1300 consumption spending (C) IV. 1500 Assume that G is now equal to 250.

It is now April 1, and you are considering investing in 90 day bank bills in two months time (or 60 days). That is, on June 1 you intend to purchase bank bills with a face value of 2,000,000 at maturity. You are concerned interest rates will fall over the next two months and you wish to hedge your interest rate risk using FRA contracts. For the

. You purchase one IBM July 250 call contract for a premium of 4 (note that July 90 means contract expires in July and has a strike price of 250 one contract is for 100 shares). The stock has a 2 for 1 split prior to the expiration date. You hold the option until the expiration date when IBM stock sells for 128 per share. You will realize a on the

You use 1000 barrels of oil a month. The current price of oil is 50, you buy calls with a strike price of 55 for a total of 5,000. What are your total costs if the spot price ends up at 60

You are given Effective date of a decreasing annuity 1112. Date of the first payment 7112 Frequency of payments Semiannually Number of payments 20 Semiannually decrease in payment 100 . Interest rate 5 per year, compounded semiannually Present value of remaining payments as of 1118 (after 1118) 30000 Calculate the first semiannual payment X.

Portfolio has 3 sotcks (a b and c). A's Beta is 1.4. B's is 0.9 and C is 1.9. 40% money invested in A, 50% in B and 10% in C a.) what is Beta of portfolio b.) stnd dev of portfolio is 30% and stand dev market returns is 20%.w ould you consider portfolio to be perfectly diversified why?

Branch banks must keep enough money on hand to satisfy customers cash demands. Suppose the daily demand for cash at a branch of University Bank follows a lognormal distribution with means and standard deviation summarized as follows (in 1,000s) Mean Std Dev Monday 180 23 Tuesday Wednesday Thursday Friday Saturday Sunday 115 55 125 135 70 21 12 15

The firm you are following as an analyst has FCFF of 600 million dollars and FCFE of $20 million dollars its before tax cost of debt is 3.5 percent and its required rate of return for equity is 10.8 percent. the company expects a target capital structure consisting of 30 percent debt financing and 70 percent equity financing. the tax rate is 30

Assume that the CCIR is 4%. The spot price of the underlying assets for each option below is $15. A Put option with expiration in 12 months from now and strike price $5 (per share) is currently trading at $4.9. Is there a mispricing. If so, specify how you would exploit it. A Call option with expiration in 12 months from now and strike price $5

Bright Capital, Inc. is being liquidated. The company's assets can be sold for $20 million. It will cost $18 million for the company to meet all its previous obligations and to pay-off debt holders. The company has 30 million shares outstanding. If you own 2,197 shares, how much do you expect to receive in liquidating dividends? Ignore taxes.

Dustin, who is 48 years old, works for Pinnacle Inc., with a salary of $300,000, a car allowance, and a very niceexpense account. Pinnacle is a Fortune 1,000 company that sponsors a defined benefit plan that pays 2 percenttimes years of participation times the average of the three final years of compensation. In addition, Pinnaclesponsors a 401(k)

Stewart Inc.'s latest EPS was $3.50, its return on equity was 15.39 percent, it had 215,000 shares outstanding, and its debt-to-equity ratio was 44.6%. How much debt was outstanding?

Daryl treats his friends several times during the month and accumulates a debt of $727.56 on his credit card. His credit card and has an interest rate of 20.99%. If he makes payments of $30 per month how long it take him to pay for this generosity which his friends appreciate but he can't currently afford?

In the year 2019, Wells Fargo Securities analysts evaluate Liberty Property Trust's proposal for acquisition of $10 million rental apartment building as indicated in its 8-K filing (i.e. bolt-on acquisition). Wells Fargo forecasts that the building will generate $6 million each year in rent over the following six years (2020-2025). Total operating

You have just negotiated a 5 year mortgage on $200,000 amortized over 25 years at a rate of 6%. Assuming after five years the mortgage rate changes to 5%, what will be your new monthly payments after 5 years.

A newly issued bond pays its coupons once annually. Its coupon rate is 5.5, its maturity is 20 years, and its yield to maturity is 8.5. a. Find the holdingperiod return for a 1year investment period if the bond is selling at a yield to maturity of 7.5 by the end of the year. (Do not round intermediate calculations. Round your answer to 2 decimal

A cattle ranch started last year with $64000 in its cash account. Within the year, all the events that affected cash are summarized in the following table: Cash paid for operating expenses $210,000 Net increase in short-term debt $50,000 Cash paid for purchasing of breeding stock $45,000 Cash paid for income taxes $25,000 Withdrawals $20,000

Complete the following problems using the information given below Total Project Cost Lender Standards . . . . o Interest Rate o Amortization Rate o Debt service coverage ratio o Debttocost ratio Projected annual cash flow of project Investors Hurdle Rate Tax Rate Cap Rate Sale In Year 10 30,000,000 7.5 20 Yrs. 1.5 60 2,750,000 1. Calculate the

Your sales and cost accounting team have come up with upper and lower bound estimates for sales, prices and costs as shown in the table below. You are considering a project that requires an initial investment of 10,000. t is depreciable over four years using the straight line depreciation. The discount rate is 10. Your tax bracket is 34 and you

Following table is the data of past dividend payments. dividend (in millions) 2012$1.00 2013$1.50 2014$2.00 2015$2.35 2016$3.15 2017$4.00 2018$4.65 2019$5.25 2020$5.96 Using the past dividend data, you will forecast the future growth rate. The most recent dividend paid by New Technologies was an annual dividend of $5.96 million in total and there

(a) Find I and V in the four circuits in Figure 1.1 using the ideal diode. (b) Repeat using the constant voltage drop (second approximation) model with Von 0.7 V. 5V 20KQ (a) D1 5V OV 20kQ2 (b) D2 3V OV Figure 1.1 3V (c) D3 20kQ 5V D4 20kQ 5V (d)

In casting experiments performed using a titanium alloy and a zircon sand mold, it took 155 s for a cube shaped casting to solidify. The cube was 50 mm on a side. If the same alloy and mold type were used, find the total solidification time for a cylindrical casting in which the diameter30 mm and length 50 mm.

Duffert Industries has total assets of 1,080,000 and total current liabilities (consisting only of accounts payable and accruals) of 100,000. Duffert finances using only longterm debt and common equity. The interest rate on its debt is 7 and its tax rate is 40. The firms basic earning power ratio is 15 and its debtto capital rate is 40. What are

You want to open a coffee shop, which costs 50,000 now. There are two options. First, keep operating it yourself. It generates a positive cash flow of 25,000 per year. Second option, sell it after one year for 65,000. See the cash flows illustrated below. t 0 (1) 50,000 (2) 50,000 1 25,000 65,000 2 25,000 25,000 To decide which option is better,

Japan is expected to have inflation of 2% for the coming year, while the US is expected to have deflation of 3%. The spot exchange rate is yen 95/$. A Toyota made in Japan costs yen 4.75 million. a.) What is the best estimate of the spot rate 1-year from today? Explain your answer. b.) What will be the dollar cost of a car imported from Japan one

Income producing property that according to your assumptions and estimations is currently worth $4M on an unlevered basis when a 7.5% required rate of return is applied. One of the assumptions that you have made when arriving at that estimate is that you will sell the property in 6 years for a CAP of 8%, which translates to $4.4M at that future

EURUSD is trading at 1.0850, US 3 month interest rates are 1.25% whilst Euro 3 month rates are 2.25%. The exchange rate for the long leg of a 3 month swap will be?

One of the points of discussion between management and its consultants is the choice of the discount rate for this capital budgeting exercise. It was finally decided that the discount rate would be the companys WACC. Currently all of Highlands assets are exclusively financed by common equity and longterm debt (bonds). The companys balance sheet

Using a regression analysis, I need help forecasting total losses no incident rate or severity rate is needed. Show data, graphs and regression output. Accident Year Period Claims Frequency 5 9 10 15 25 2015 2016 2017 2018 2019 2 GAW N 3 4 5 Total Losses 96,900.00 102,500.00 236,100.00 356,700.00 495,600.00

Financial planners estimate you will require an income of $2500 per month to retire. You dial 1800 psychic and discover you will live another 15 years. How much money will you need to retire if your first withdrawal will be in one month?(interest is 9% compounded monthly) You have just purchased a new house for $250,000. You can afford to pay

ABC Company currently has a cash cycle of 229 days. The company went through a management change. The new management has changed the working capital policies for the company. The new policies will increase the inventory period by 37 days, increase the accounts receivable period by 23 days, and decrease the accounts payable period by 13 days.

Jeff, a 56-year-old professor, is subject to a 28% tax rate. He has had a family emergency and must withdraw $5,000 from his IRA to fund it. How much money will he owe the government for this withdrawal?

The following table shows three cash flow streams for Ace Inc.s new investment projects. All cash flows are in mil. Year 0 1 2 3 4 5 6 7 Cost of capital Project 1 79 20 25 30 35 40 NA NA 12 Project 2 80 25 25 25 25 25 25 25 15 Project 3 320 100 120 140 160 NA NA NA 12 a Find NPV and IRR of each project. b. Between Project 1 and 3, which project

Ian wants to 'experience life' and will wait to save until he is 40 years old. Mariah was taught to save even as a teenager and wants to keep up that habit. Starting now, at age 25, each with $250 in their account, Mariah puts $50 away every paycheck. She has found an online bank that pays 5% interest if she leaves the money in the bank. If Ian

Your firm is considering a project with the following timeline and cash flows: l Year 0: -$1,800 l Year 1: $880 l Year 2: $948 l Year 3: $1,231 l Year 4: $845 l Year 5: $1,586 If the appropriate cost of capital is 7 percent, what's the PI statistic for the project, and should the firm accept or reject the project?

Unicorn Ltds most recent free cash flow announced yesterday was 100 million and will grow at 5 percent, a rate that is expected to be constant. If the companys weighted average cost of capital is 15 percent, what is the fair value of the firm

You have access to two investment opportunities. Mutual Fund A, which promises 20% expected return with a variance of 0.36, and Mutual Fund B, which promises 15% expected return with a variance 0f 0.12. The covariance between the two is 0.084. 1. Suppose that you seek to construct a portfolio with an expected return equal to 18%. What proportions

Orchid, Inc. reported the following amounts at the end of the first year of operations Amount Item 200 Dividends declared 680 Total liabilities 600 Item Common stock Total expenses Total assets Amount 40 320 What are the retained earnings of Orchid at the end of the year, and what amount of revenue was earned during the year

Joe's Home Service sales is $2,830, cost of goods sold $2,170, inventory $506, and accounts receivable $431. How many days, on average does it take for Joe to sell his inventory?

I need $31000 in 11 years. I earn an annual interest 3 % the first 3 years, 3.6 % the next 2 years, & 4.3% for the end of 6 years. What do I need to deposit today?

The following table shows a potential investment which John Smith, the owner of Johnnys Garage, is considering. Based on this information, and using the NPV criteria, should Johnny proceed with the investment Why or why not Show your work completely. Johnnys Garage Alignment Machine Assumptions Cost Expected Life Projected Average Sales Price

ABC company makes 40 orders of chairs in a year and orders 12,334 chairs each time. The fixed order costs are $474.29 per order and the carrying cost per unit is $37.62. The chairs are sold out before they are restocked. What are the shortage costs if the company orders the optimal quantity (Economic Order Quantity)?

ABC company makes 52 orders of chairs in a year and orders 108 chairs each time. The fixed order costs are $435.33 per order and the carrying cost per unit is $23.14. The chairs are sold out before they are restocked. What are the carrying costs if the company orders the optimal quantity (Economic Order Quantity)? ABC Company used an investment

James has $3,000 in credit card debt, which charges 14% interest. How long will it take to pay off the card if he makes the minimum payment of $60 a month?

Analyze the portfolio shown below. Then, answer the questions using complete sentences. Portfolio A U.S. Treasury Certificate of Deposit 21 Bond 18 Checking Account 10 Common stock in developing firm 34 Junk Bond 17 Part 1 (6 points) Evaluate the diversity of this portfolio. Explain, using complete sentences, if this portfolio is not diverse,

Justin had a beginning balance of $100 on his credit card as of May 1 last month. On May 11 he charged a meal for $44. On May 21 he made a payment of $48. What was his average daily balance for the month?

The task is to make decision to implement a new computer network system to decrease the time between customer order and delivery. The cost will be 10% of last year's profits. How would you calculate this? Based on the following information: Revenues $ 39,117 Gross profit 17,474 Gross margin 44.7% Net income(1) 4,029

Suppose that stock prices satisfy P k1 Et Dtk(1r). Here r is the discount rate, D dividends and Et Dtk refers to the expectation of dividends made at time t for t k. Briefly motivate the intuition behind this model (think of how prices are definedformed). (b) Consider the model in (a) with Et Dtk D (constant). Obtain an expression for P in

Price a 65-day forward contract on wheat if you know that today's price is $1,717.22 and the risk free rate is 6.6%.

You are in charge and expected to make a presentation to Nascos topmanagement regarding une merits of the infrared heater project. Given the base case information provided above, estimate its cash flows over its life and provide measures of the projects desirability or lack thereof. (Explain in detail cash flow calculations for years 0 and 4.)

Rick Malcolm is an advisor to a board member who works at a private equity firm. He has told the CFO that sophisticated investors use a quick estimate of the cost of equity. He says that the cost of equity must be above the company's debt rate. The estimate is that 3% to 5% should be added to the company's long term interest rates. McCormick &