Finance

All new and solved questions in Finance category

1 answer
Cash budget
Singal Inc. is preparing its cash budget. It expects to have sales of $30,000 in January, $35,000 in February, and $35,000 in March. If 20% of sales are for cash, 40% are credit sales paid in the month after the sale, and another 40% are credit sales paid 2 months after the sale, what are the expect...
2 answers
Q7
Frank is an option speculator. He anticipates the Danish kroner to appreciate from its current level of $0.19 to $0.21. Currently, kroner call options are availablewith an exercise price of $0.18 and a premium of $0.02.If the future spot rate of the Danish kroner is indeed $0.21, what is his profit ...
1 answer
Given the following information, what is the standard deviation of the returns on a portfolio...
Given the following information, what is the standard deviation of the returns on a portfolio that is invested 40 percent in stock A, 35 percent in stock B, andthe remainder in stock C?State of Economy Prob. of State of Economy Rate of Return is state occursNormal .65 Stock A-14.3% Stock B- 16.7% St...
1 answer
Accounting in healthcare
Refer to Megatropolis Hospital’s financial statements below for calculating the ratios requested in questionsMegatropolis HospitalStatement of OperationsFor the Year Ended December 31, 2011Revenues, Gains, Other SupportNet patient service revenue$1,500,000Otherrevenue200,000TotalRevenue1,700,0...
1 answer
WACC problem
Rollins Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,000. The firm could sell, at par, $100 preferre...
no answer
The effective annual interest rate on a one-year, $1,000,000, 12% discount loan that requires a...
The effective annual interest rate on a one-year, $1,000,000, 12% discount loan that requires a 10% compensating balance isAnswer 15.4%.13.3%.13.6%.12.0%.none of the aboveshow work...
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NPV and discount rates
NPV versus IRR. Framing Hanley, LLC, has identified the following two mutually exclusive projects:Year Cash Flow (A) Cash Flow (B)0 -$50,000 -$50,0001 26,0000 14,0002 20,000 18,0003 16,000 22,0004 12,000 26,000At what discount rate would you be indifferent between these two projects?...
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Urgent
Blue Corporation, a manufacturing company, decided to develop anew line of merchandise. The project began in 2008. Blue had thefollowing expenses in connectionwith the project:20082009Salaries$300,000$400,000Materials80,00070,000Insurance10,00015,000Utilities7,0008,000Cost of inspection of materialF...
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The 2008 balance sheet of Maria's Tennis Shop, Inc
The 2008 balance sheet of Maria's Tennis Shop, Inc., showed $3 million in long-term debt, $746,200 in the common stock account, and $6.53 million in the additional paid-in surplus account. The 2009 balance sheet showed $3.3 million, $812,250, and $8.13 million in the same three accounts, respect...
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What would be the net annual cost of the following checking accounts
What would be the net annual cost of the following checking accounts?a. Monthly fee, $3.75; processing fee, 25 cents per checks written, and an average of 14 a month.b. Interest earnings of 4 percent with a $500 minimum balance, average monthly balance, $600; monthly service charge of $15 for fallin...
2 answers
Manigerial Finance Question on Futrue Value on an Annuity
Future Value of an annuity. Using the values below, answer the questions that follow:Amount of Annuity = $8,000Interest Rate= 5%Deposit Period= 7yrs.A. Calculate the future value assuming that(1) its an ordinary annuity(2) an annuity due *round answer to the nearest centB. Compare your findings in p...
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Time value of money
What is the present value of $1,600 per year, at a discount rate of 10 percent, if the first payment is received 5 years from now and the last payment is received 27years from now...
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The yield of bonds
Which of the following statements is CORRECT?a. The yield on a 3-year Treasury bond cannot exceed the yield on a 10-year Treasury bond.b. The yield on a 2-year corporate bond should always exceed the yield on a 2-year Treasury bond.c. The yield on a 10-year AAA-rated corporate bond should always exc...
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Finance 2
Tidewater Home Health Care, Inc. has a bond issue outstanding with eight years remaining to maturity,a coupon rate of 10 percent with interest paid annually, and a par value of $1,000. The current marketprice of the bond is $1,251.22.a. What is the bond's yield to maturity?b. Now, assume that th...
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Supernormal growth DDM
A firm expects to increase its annual dividend by 20 percent per year for the next two years and by 15 percent per year for the following two years. After that, thecompany plans to pay a constant annual dividend of $3 a share. The last dividend paid was $1.00 a share. What is the current value of th...
2 answers
Bank reserves
Assume that there are two banks, A and Z in the banking system. Bank A receives a primary deposit of $600,000 and it must keep reserves of 12 % against deposits. BankA makes a loan in the amount that can be safely lent.a. Show what bank A’s balance sheet of assets and liabilities would look li...
2 answers
Formula + explanation too
During a normal economy, the common stock of Douglass &Frank is expected to return 12.5 percent. During a recession, the expected return is -5 percent and duringa boom, the expected return is 18 percent. The probability of a normal economy is 65 percent while the probability of a recession is 25...
no answer
Optimal Capital Budget
Hampton Manufacturing estimates that is WACC is 12 percent if equity comes from retained earnings. However, if the company issues new stock to raise new equity, itestimates that its WACC will rise to 12.5 percent. The company believes that it will exhaust its retained earnings at $3,250,000 of capit...
no answer
Cost of common equity.
The Bouchard Company's EPS was $6.50 in 2008, up from $4.42 in 2003. The company pays out 40% of its earning as dividends, and its common stock sells for$36.00.a) Calculate the past growth rate in earnings. (Hint: This is a 5-year growth period)b) The last dividend was D0=0.4($6.5)=$2.6. Calcula...
5 answers
Pizza A had earnings after taxes of $600,000 in the year 2008, and 300,000 shares outstanding....
Pizza A had earnings after taxes of $600,000 in the year 2008, and 300,000 shares outstanding. In year 2009, earnings after taxes increased to $750,000, and 25,000 newshares were issued for a total of 325,000 shares. What is the EPS figure for 2008?...

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