Your Factory Has Been Offered A Contract To Produce A Part For A New
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 $ 5.03 million per year. Your up-front setup costs to be ready to produce the part would be $ 8.01 million. Your discount rate for this contract is 7.7 %. a. What is the IRR? b. The NPV is $ 5.02 million, which is positive so the NPV rule says to accept the project. Does the IRR rule agree with the NPV rule?
Why Is It Sometimes Misleading To Compare A Company’s Financial Ratios With Those Of
Why is it sometimes misleading to compare a company’s financial ratios with those of other firms that operate in the same industry?
You Are A Shareholder In A C Corporation. The Corporation Earns $ 1.87$1.87 Per
You are a shareholder in a C corporation. The corporation earns $ 1.87$1.87 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. Assume the corporate tax rate is 40 @% and the personal tax rate on (both dividend and non-dividend) income is 30 0%. How much is left for you after all taxes are paid? The amount that remains is $nothing per share. (Round to the nearest cent.)
You Are A Shareholder In An S Corporation. The Corporation Earns $ 1.75$1.75 Per
You are a shareholder in an S corporation. The corporation earns $ 1.75$1.75 per share before taxes. As a pass through entity, you will receive $ 1.75$1.75 for each share that you own. Your marginal tax rate is 25 %%. How much per share is left for you after all taxes are paid? Amount that remains is $nothing per share. (Round to the nearest cent.)
What Is The Most Important Type Of Decision That The Financial Manager Makes? (Select
What is the most important type of decision that the financial manager makes? (Select the best choice below.) A. The financial manager’s most important job is to make the firm’s investment decisions. B. The financial manager’s most important job is to make the firm’s financing decisions. C. The financial manager’s most important job is to make the firm’s payment decisions. D. The financial manager’s most important job is to make the firm’s dividend decisions.
Corporate Managers Work For The Owners Of The Corporation. Consequently, They Should Make Decisions
Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather than in their own interests. What strategies are available to shareholders to help ensure that managers are motivated to act this way? Shareholders can do the following: (Select all the choices that apply.) A. Write contracts that ensure that the interests of the managers and shareholders are closely aligned. B. Ensure that employees are paid a percentage of the company’s net income. C. Ensure that underperforming managers are fired. D. Ensure that employees are paid with company stock and/or stock options. E. Mount hostile takeovers
What Is The Difference Between A Public And Private Corporation? (Select From The Drop-down
What is the difference between a public and private corporation? (Select from the drop-down menus.) The shares of a ▼ public private corporation are traded on an exchange (or “over the counter” in an electronic trading system) while the shares of a ▼ private public corporation are not traded on a public exchange.
What Is The Difference Between A Primary And A Secondary Market? (Select From The
What is the difference between a primary and a secondary market? (Select from the drop-down menus.) The ▼ primary market secondary market refers to a corporation issuing new shares of stock and selling them to investors. After this initial transaction between the corporation and investors, the shares continue to trade in a ▼ primary market secondary market between investors without the involvement of the corporation.
How Are Limit Orders And Market Orders Different? (Select The Best Answer Below.) A.
How are limit orders and market orders different? (Select the best answer below.) A. A limit order limits the price that you are willing to buy at. It will be executed when there is a limited supply at that price. A market order is to be executed immediately at the best outstanding limit order. B. A market order specifies a price that you are willing to buy or sell at. It will be executed when there is demand or supply at that price. A limit order is to be executed immediately at the best outstanding limit order. C. A limit order specifies a price that you are willing to buy or sell at. It will be executed when there is demand or supply at that price. A market order is to be executed immediately at the best outstanding limit order. D. A limit order specifies a price that you are willing to buy or sell at and is executed immediately. It A market order will be executed when there is demand or supply at the best outstanding limit order.
How Do Financial Institutions Help With Risk-bearing? (Select All The Choices That Apply.) A.
How do financial institutions help with risk-bearing? (Select all the choices that apply.) A. Insurance companies spread out risk by pooling premiums together from policy holders and pay the claims of those who have an accident, fire, medical need or die. This process spreads the financial risk of these events out across a large pool of policyholders and the investors in the insurance company. B. Mutual funds and pension funds take your savings and spread them out among the stocks and bonds of many different companies, limiting your exposure to any one company. C. Investment companies will deny any attempt by an investor to concentrate their investment in one single company as this would violate their role in spreading out risk. D. Financial institutions not only assist with the risk-bearing of savers and investors, but must also be concerned about their own risk, spreading their loans out among a variety of clientele.
What Role Do Investment Banks Play In The Economy? (Select All The Choices That
What role do investment banks play in the economy? (Select all the choices that apply.) A. Investment banks advise companies in major financial transactions such as buying or selling companies or divisions. B. Investment banks assist companies in raising capital by issue of stocks and bonds on behalf of corporate clients. C. Investment banks provide financial planning advice to individual investors. D. Investment banks are the primary vendors of mutual funds.
Describe Trading Practices In Dealer Markets, Specialist-directed Stock Exchanges, And Electronic Communication Networks.
Describe trading practices in dealer markets, specialist-directed stock exchanges, and electronic communication networks.
Since Its Inception In 1961, The Value Of The South African Rand (ZAR) Has
Since its inception in 1961, the value of the South African Rand (ZAR) has been affected by the political and economic changing conditions. The political turmoil and racial discrimination led many nations to impose sanctions against South African white governments, leading to gradual depreciations of the rand. By the time that the first indigenous government assumed power in 1994, the value of the rand against the British Pound (GBP) reached 5.41. The most massive impacts were seen in 2002, after the 9/11 terror attacks and the land reform laws. The global financial crisis has also severely depreciated the rand. Ever since, the rand has been declining, indicating that it is no longer a currency that traders have an appetite for. It is for this reason that the ZAR is one of the most over-sold currencies of the world. Year ZAR/GBP 1961-1982 2 1982-1985 1.95 1985 2.99 1986-1988 3.47 1989-1993 4.51 1994 5.41 1999 9.07 2001 21.3 2002 13.85 2005 10.2 2008 17.82 2010 12.01 2015 18.27 1. What was the rate of depreciation from the time of the inception of the rand till the indigenous government assumed power? 2. What was the percentage change from 1994 to 2015?
Delta IBM Jan-83 0.04 0.027 Feb-83 0.027 0.01 Mar-83 -0.016 0.028 Apr-83 -0.043
Delta IBM Jan-83 0.04 0.027 Feb-83 0.027 0.01 Mar-83 -0.016 0.028 Apr-83 -0.043 0.15 May-83 -0.045 -0.041 Jun-83 0.012 0.081 Jul-83 -0.259 0.001 Aug-83 0.08 0.001 Sep-83 0.041 0.062 Oct-83 0.039 -0.001 Nov-83 0.12 -0.066 Dec-83 -0.028 0.039 Jan-84 -0.013 -0.065 Feb-84 -0.117 -0.026 Mar-84 0.065 0.034 Apr-84 -0.085 -0.002 May-84 -0.07 -0.044 Jun-84 -0.012 -0.019 Jul-84 0.045 0.047 Aug-84 0.04 0.127 Sep-84 0.008 0.004 Oct-84 0.161 0.012 Nov-84 -0.026 -0.023 Dec-84 0.156 0.011 Jan-85 -0.01 0.108 Feb-85 0.087 -0.009 Mar-85 -0.003 -0.052 Apr-85 -0.123 -0.004 May-85 0.179 0.025 Jun-85 0.021 -0.038 Jul-85 0.008 0.062 Aug-85 -0.066 -0.028 Sep-85 -0.112 -0.022 Oct-85 -0.083 0.048 Nov-85 0.02 0.085 Dec-85 0.03 0.113 Jan-86 0.122 -0.026 Feb-86 -0.055 0.003 Mar-86 0.076 0.004 Apr-86 0.059 0.031 May-86 -0.043 -0.018 Jun-86 -0.07 -0.039 Jul-86 0.018 -0.096 Aug-86 0.018 0.055 Sep-86 0.026 -0.031 Oct-86 0.134 -0.081 Nov-86 -0.018 0.037 Dec-86 -0.01 -0.056 Jan-87 0.161 0.073 Feb-87 0.133 0.092 Mar-87 -0.129 0.076 Apr-87 -0.121 0.067 May-87 0.151 0.006 Jun-87 0.014 0.016 Jul-87 0.043 -0.009 Aug-87 -0.037 0.053 Sep-87 -0.067 -0.105 Oct-87 -0.26 -0.187 Nov-87 -0.137 -0.087 Dec-87 0.121 0.043 Above is the monthly returns of Delta and IBM. Assume that the risk free (monthly) rate is 0.0015. Using the calculations (the mean for each stock is the expected return) plot (i) Return-Standard Deviation diagram and (ii) Sharpe ratio across different weights.) The weight for one asset ranges from -1 to 2. Comment. What is the weight of the optimal risky portfolio? Comment.
Chantel Cohen Works For ABC Retailers And Is Seeking Managements Approval To Install An
Chantel Cohen works for ABC retailers and is seeking managements approval to install an automatic mail-response system. using the correct proposal format, write Jamie Oliver, Chantels manager requesting a decision to be made with regard to the installation of an automatic mail-response system. INCLUDE: -CORRECT FORMAT -THE PROBLEM -THE SOLUTION -COST ANALYSIS -CONCLUSION
You Have An Opportunity To Invest$ 50 000 Now In Return For $ 60
You have an opportunity to invest$ 50 000 now in return for $ 60 900 in one year. If your cost of capital is 8.4 % what is the NPV of this investment?
You Have An Opportunity To Invest $ 108 000 Now In Return For $
You have an opportunity to invest $ 108 000 now in return for $ 80 200 in one year and $ 29 200 in two years. If your cost of capital is 9.1 %, what is the NPV of this investment?
Your Factory Has Been Offered A Contract To Produce A Part For A New
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 $ 5.15 million per year. Your up-front setup costs to be ready to produce the part would be $ 7.92 million. Your discount rate for this contract is 7.7 %. a. What does the NPV rule say you should do? b. If you take the contract, what will be the change in the value of your firm?
John Howard Reportedly Was Paid $ 440 000 To Write His Book Lazarus Rising.
John Howard reportedly was paid $ 440 000 to write his book Lazarus Rising. The book took three years to write. In the time he spent writing, Howard could have been paid to make speeches. Given his significance as Australia’s second-longest serving Prime Minister, assume that he could earn $ 280 000 per year (paid at the end of the year) speaking instead of writing. Assume his cost of capital is 9.6 % per year. a. What is the NPV of agreeing to write the book (ignoring any royalty payments)? b. Assume that, once the book is finished, it is expected to generate royalties of $ 190 000 in the first year (paid at the end of the year) and these royalties are expected to decrease at a rate of 30 % per year in perpetuity. What is the NPV of the book with the royalty payments?
Superfast Bikes Is Thinking Of Developing A New Composite Road Bike. Development Will Take
Superfast Bikes is thinking of developing a new composite road bike. Development will take six years and the cost is $ 198 400 per year. Once in production, the bike is expected to make $ 295 110 per year for 10 years. The cash inflows begin at the end of year 7. Assuming the cost of capital is 9.2 %: a. Calculate the NPV of this investment opportunity. Should the company make the investment? b. Calculate the IRR and use it to determine the maximum deviation allowable in the cost of capital estimate to leave the decision unchanged. c. How long must development last to change the decision? Assume the cost of capital is 14.7 %. d. Calculate the NPV of this investment opportunity. Should the company make the investment? e. How much must this cost of capital estimate deviate to change the decision? f. How long must development last to change the decision?
AdventureParks Ltd Is Evaluating The Construction Of A New Theme Park. The Theme Park
AdventureParks Ltd is evaluating the construction of a new theme park. The theme park would cost $ 495 million, but would operate for 20 years. AdvertureParks expects annual cash flows from operating the theme park to be $ 70.6 million and its cost of capital is 12.0 %. a. Prepare an NPV profile of the purchase. b. Identify the IRR on the graph. c. Should AdventureParks go ahead with the purchase? d. How far off could AdventureParks’ cost of capital estimate be before your purchase decision would change?
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