Financial literacy

1) Keys Printing plans to issue a $1,000 par value, 20-year noncallable bond wit

1) Keys Printing plans to issue a $1,000 par value, 20-year noncallable bond with a 7.00% annual coupon, paid semiannually. The company's marginal tax rate is 40.00%, but Congress…

1) Kwame is interested in buying shares on the stock market but has limited fund

1) Kwame is interested in buying shares on the stock market but has limited funds. He currently has Ghs5500 but to give him leverage and hopefully make more money, he borrowed an …

1) LDI can produce 63,000 parts per year. At this level, the degree of operating

1) LDI can produce 63,000 parts per year. At this level, the degree of operating leverage is 2.85. Fixed costs are $140,000 annually. What is the operating cash flow at this level…

1) Landon Stevens is evaluating the expected performance of two common stocks, F

1) Landon Stevens is evaluating the expected performance of two common stocks, Furhman Labs, Inc., and Garten Testing, Inc. The risk-free rate is 5.9 percent, the expected return …

1) Las Paletas Corporation has two different bonds currently outstanding. Bond M

1) Las Paletas Corporation has two different bonds currently outstanding. Bond M has a face value of $10,000 and matures in 20 years. The bond makes no payments for the first six …

1) Last year you sold 30,000 units for $10/unit and encountered a fixed cost of

1) Last year you sold 30,000 units for $10/unit and encountered a fixed cost of $150,000, and a variable cost of $3/unit. Next year you expect sales to drop to 25,000 with the sam…

1) Lavon has his money invested into an asset that has averaged the following re

1) Lavon has his money invested into an asset that has averaged the following returns the last three years: +22%, -8%, +13%. Most likely what type of asset is he invested in? A) C…

1) Layla has owned her home for 12 years and expects to live in it for 5 more ye

1)  Layla has owned her home for 12 years and expects to live in it for 5 more years. She originally borrowed $200,000 at 5% for 30 years to buy the home. She still owns $130,000 …

1) Lebron received $50,000 of compensation from his employer and he received $40

1)   Lebron received $50,000 of compensation from his employer and he received $400 of interest from a municipal bond. What is the amount of Lebron's gross income from these items…

1) Lifeline, Inc., has sales of $590,000, costs of $268,000, depreciation expens

1) Lifeline, Inc., has sales of $590,000, costs of $268,000, depreciation expense of $68,500, interest expense of $35,500, and a tax rate of 40 percent. Required: What is the net …

1) List the 4 decisions involved or constructing an investment strategy. 2)In ad

1) List the 4 decisions involved or constructing an investment strategy. 2)In addition to measuring profitability, efficiency and risk, the specific uses of financial ratios in th…

1) Long-term care insurance will be needed by an increasing number of Americans

1) Long-term care insurance will be needed by an increasing number of Americans in the next few decades. But why isn't it popular now? Are there any problems with the current U.S.…

1) Lycan, Inc., has 7.4 percent coupon bonds on the market that have 6 years lef

1) Lycan, Inc., has 7.4 percent coupon bonds on the market that have 6 years left to maturity. The bonds make annual payments. Required: If the YTM on these bonds is 9.4 percent, …

1) Management accounting plays a role in a planning new products. b evaluating o

1) Management accounting plays a role in a planning new products. b evaluating operational processes. c controlling costs. d all of the above. 2) Management accounting, managers a…

1) Market capitalism is typically less efficient than managerial capitalism. Tru

1) Market capitalism is typically less efficient than managerial capitalism. True / False 2) From the viewpoint of the Business Roundtable, shareholders such as employees have pri…

1) Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co

1) Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $4,900, $9,900, and $16,100 over the next three years, respectively. A…

1) McGilla Golf has decided to sell a new line of golf clubs. The clubs will sel

1) McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $900 per set and have a variable cost of $500 per set. The company has spent $159,000 for a m…

1) Michelo Corporation invested $100,000 to acquire 20,000 shares of Vatsala Tec

1) Michelo Corporation invested $100,000 to acquire 20,000 shares of Vatsala Technologies on March 1, 2015. On June 3, 2015, Vatsala pays a cash dividend of $0.25 per share. The i…

1) Mullineaux Corporation has a target capital structure of 65 percent common st

1) Mullineaux Corporation has a target capital structure of 65 percent common stock, 10 percent preferred stock, and 25 percent debt. Its cost of equity is 11 percent, the cost of…

1) Muncy, Inc., is looking to add a new machine at a cost of $4,133,250. The com

1) Muncy, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $819,322, $863,275, $937,250, $1,018,610, $1…

1) Negus Enterprises has an inventory conversion period of 50 days, an average c

1) Negus Enterprises has an inventory conversion period of 50 days, an average collection period of 35 days, and a payable deferral of 25 days. Assume that cost of goods sold is 8…

1) Net cash from operations increaed, yet cash as reported on the balance shee d

1) Net cash from operations increaed, yet cash as reported on the balance shee decresed. Which of the following factors could explain this situation? A) the comoany cut its divide…

1) Nicole wants to purchase a new car, which has a total cost of $35,482. She pl

1) Nicole wants to purchase a new car, which has a total cost of $35,482. She plans to put a down payment of $5000 and will pay the rest by taking on a 5.75 percent (APR) five-yea…

1) Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materia

1) Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $12.50 per unit, and the variable labor cost is $7.20 per unit.    a. What is the variab…

1) Niles, an accountant, certifies several audit reports on Optimal Operational

1) Niles, an accountant, certifies several audit reports on Optimal Operational Processes, Inc., Niles’s client, knowing that the company intends to use the reports to borrow mone…

1) Noncash expenses include: a. depreciation expenses b. salaries of administrat

1) Noncash expenses include: a. depreciation expenses b. salaries of administrative personnel c. foremen's salaries d. packaging expenses 2) Which two ratios would be most helpful…

1) One year from today you will receive the first of six annual $6,000 payments.

1) One year from today you will receive the first of six annual $6,000 payments. The current interest rate is 8%. This will continue until the end of year 1. The rate will be 9% f…

1) Optimal capital structure is: a. the mix of permanent sources of funds used b

1) Optimal capital structure is: a. the mix of permanent sources of funds used by the firm in a manner that will maximize the company’s common stock price. b. the mix of all items…

1) PDQ Corp. has sales of $3,000,000; the firm’s cost of goods sold is $1,425,00

1) PDQ Corp. has sales of $3,000,000; the firm’s cost of goods sold is $1,425,000; and its total operating expenses are $700,000. The firm’s interest expense is $230,000, and the …

1) Payback period = 4 + 66000000/210000000 = 4.31 Years NPV = $ 28,451,509.51 IR

1) Payback period = 4 + 66000000/210000000 = 4.31 Years NPV = $ 28,451,509.51 IRR = 13.25% MIRR = 12.51% 12.51% Question is:Most spreadsheets do not have a built-in formula to cal…

1) Pharsalus Inc. just paid a dividend (i.e., D0) of $ 3.34 per share. This divi

1) Pharsalus Inc. just paid a dividend (i.e., D0) of $ 3.34 per share. This dividend is expected to grow at a rate of 2.5 percent per year forever. The appropriate discount rate f…

1) Piscain Pay Inc. expects to pay a dividend of $410,000 at the end of the year

1) Piscain Pay Inc. expects to pay a dividend of $410,000 at the end of the year and projects a growth in dividends of 6.46 percent per year. If k is 14.75 percent and it expects …

1) Please show work 1-a) If I purchase a bond with a coupon rate lower than the

1) Please show work 1-a) If I purchase a bond with a coupon rate lower than the present market return rate for similar risk investments I will be purchasing the bond at which of t…

1) Portfolio Return Year-to-date, Company X had earned a -2 percent return. Duri

1) Portfolio Return Year-to-date, Company X had earned a -2 percent return. During the same time period, Company Y earned 10 percent and Company Z earned 15 percent. If you have a…

1) Prepare a common size balance sheet by expressing each item on the balance sh

1) Prepare a common size balance sheet by expressing each item on the balance sheet as a percent of total asset. Based on your common size balance sheet, what is total non-current…

1) Prepare a common size income statement by expressing each item of the income

1) Prepare a common size income statement by expressing each item of the income statement as a percent of total revenue. Based on your common size Income Statement, what is net in…

1) Price the bonds from the following with ANNUAL coupon payments. A) Par value-

1) Price the bonds from the following with ANNUAL coupon payments. A) Par value-$1,000 Coupon rate-11% Years to maturity-20 Yield to maturity-10% Price - ? B) Par value-$5,000 Cou…

1) Project K costs $51,788.84, its expected cash inflows are $12,000 per year fo

1) Project K costs $51,788.84, its expected cash inflows are $12,000 per year for 8 years, and its WACC is 12%. What is the project's IRR? Round your answer to two decimal places.…

1) Property insurance policies cover lots of damages loss caused directly or ind

1) Property insurance policies cover lots of damages loss caused directly or indirectly. But not all. There are still some loss excluded regardless of any other cause or event con…

1) Q Corp is currently selling for $33 per share. Its dividends have been growin

1) Q Corp is currently selling for $33 per share. Its dividends have been growing at a constant 2.5% per year. Next year it expects to pay a dividend of $1.75. What is its expecte…

1) Quinlan Electrical has quite a few positive NPV projects from which to choose

1)              Quinlan Electrical has quite a few positive NPV projects from which to choose. The problem is that it has more of these projects than it can finance without issuin…

1) RATE OF RETURN Stock A 0.30 0.12 0.01 0.06 Stock B 0.45 0.10 0.15 -0.30 Stock

1) RATE OF RETURN Stock A 0.30 0.12 0.01 0.06 Stock B 0.45 0.10 0.15 -0.30 Stock C 0.33 0.15 0.05 -0.09 Probability Economy Boom Good 0.30 0.40 0.25 Poor0.05 Bust For your portfol…

1) RRR Inc. has $1,000,000 in debt. Using free cash flows and WACC and a estimat

1) RRR Inc. has $1,000,000 in debt. Using free cash flows and WACC and a estimated growth rate, you calculate the total value of the firm to be $2,000,000. If there are 100,000 co…

1) Read the information about home equity lines of credit on page 108-109 in you

1) Read the information about home equity lines of credit on page 108-109 in your textbook (especially the "by the numbers" in lower right on page 109) and complete the following …

1) Rebalancing strategies Suppose you initially have $100 in stock and $35 in T-

1) Rebalancing strategies Suppose you initially have $100 in stock and $35 in T-bills creating a portfolio with total assets of $135. Suppose the stock market index initially at t…

1) Recently, Glenda Estes was interested in purchasing a Honda Acura. The salesp

1) Recently, Glenda Estes was interested in purchasing a Honda Acura. The salesperson indicated that the price of the car was either $27,600 cash, or $6,900 at the end of each of …

1) Recently, Jamie and Jake each bought new cars. Both received a loan from a lo

1) Recently, Jamie and Jake each bought new cars. Both received a loan from a local bank with a nominal interest rate of 12% where payments are made at the end of each month, and …

1) Red Corp issues $1,000,000, 8% five year bonds with interest paid semiannuall

1) Red Corp issues $1,000,000, 8% five year bonds with interest paid semiannually. The current market rate of interest is 10%. • Required: Compute the price of the bond Compute th…

1) Refer to Table 19.1. The NPV for the British investment is estimated at _____

1) Refer to Table 19.1. The NPV for the British investment is estimated at ________. A) $3,092 B) $6,420 C) ?3,092 D) $0 Answer: A 2) Refer to Table 19.1. The NPV for the European…

1) Remember, the Goal of Management was to Maximize Shareholder Wealth . How can

1) Remember, the Goal of Management was to Maximize Shareholder Wealth. How can we best use capital budgeting techniques to maximize shareholder value? a) Take projects with the s…