Financial literacy

You are about to buy your first home. You will take out a $300,000 mortgage for

You are about to buy your first home. You will take out a $300,000 mortgage for 30 years, monthly payments, with a fixed rate of 6%. (Please show your work.) A) What is your month…

You are about to purchase your first home. The price of the house is $180K, the

You are about to purchase your first home. The price of the house is $180K, the annual property taxes are estimated at $2,400 and the casualty insurance is estimated at $1,800 per…

You are about to set sail on your long-term goal of sailing the seven seas over

You are about to set sail on your long-term goal of sailing the seven seas over a eight-year period. You anticipate expenses to run $400,000 per year and that you will be earning …

You are about to start to consider a batch of new capital budgeting projects. Be

You are about to start to consider a batch of new capital budgeting projects. Before you begin, you need to estimate your company’s Weighted-Average-Cost-of-Capital (WACC). The fi…

You are advising a client with two bond investments. Bond A is a zero coupon wit

You are advising a client with two bond investments. Bond A is a zero coupon with face value 1000 maturing in 8 years . Its current price is 676.84. Bond B has an annual coupon ra…

You are advising a friend who is attempting to decide whether or not to drop one

You are advising a friend who is attempting to decide whether or not to drop one of the courses they are currently enrolled in. If they drop, they will forfeit the money spent on …

You are also considering another project which has a physical life of 3 years; t

You are also considering another project which has a physical life of 3 years; that is, the machinery will be totally worn out after 3 years. However, if the project were terminat…

You are among the OTC market makers in the stock of Bio-Engineering, Inc. and qu

You are among the OTC market makers in the stock of Bio-Engineering, Inc. and quote a bid of 102.25 and an ask of 102.5. Suppose you have a zero inventory. a) On Day 1 you receive…

You are an \"up-and-coming\" analyst at a local manufacturing company that upper

You are an "up-and-coming" analyst at a local manufacturing company that upper management has been considering for a management position. Your company and the current management a…

You are an accountant at a CPA firm that is auditing the accounting records of Y

You are an accountant at a CPA firm that is auditing the accounting records of YYZ Company. You have been tasked along with the accounting department to identify the limitations o…

You are an airline trying to hedge fuel prices. You decide to hedge with crude o

You are an airline trying to hedge fuel prices. You decide to hedge with crude oil futures, as you figure that higher oil prices imply higher fuel prices. You need to short crude …

You are an analyst at a large firm. The Chief Financial Officer presents the fol

You are an analyst at a large firm. The Chief Financial Officer presents the following free cash flow data for ABC Corp (in millions of $). Year Cash Flow 2010   1600 2011   2600 …

You are an analyst evaluating Up-and-Coming Airlines Inc., a very hot potential

You are an analyst evaluating Up-and-Coming Airlines Inc., a very hot potential acquisition candidate your company is considering. Up-and-Coming currently has no debt and you esti…

You are an analyst for a large public pension fund and you have been assigned th

You are an analyst for a large public pension fund and you have been assigned the task of evaluating two different external portfolio managers (Y and Z). You consider the followin…

You are an analyst for a large public pension fund and you have been assigned th

  You are an analyst for a large public pension fund and you have been assigned the task of evaluating two different external portfolio managers (Y and Z). You consider the follow…

You are an analyst for a large public pension fund and you have been assigned th

You are an analyst for a large public pension fund and you have been assigned the task of evaluating two different external portfolio managers (Y and Z). You consider the followin…

You are an assistant to a senator who chairs an ad hoc committee on reforming ta

You are an assistant to a senator who chairs an ad hoc committee on reforming taxes on telecommunication services. Based on your research, AT&T has spent over $15 million on r…

You are an economist for the Vanda-Laye Corporation, which produces and distribu

You are an economist for the Vanda-Laye Corporation, which produces and distributes outdoor cooking supplies. The company has come under new ownership and management and will be u…

You are an entrepreneur starting a biotechnology firm. If your research is succe

You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $22 milion. If your research is unsuccessful, it will be wort…

You are an entrepreneur starting a biotechnology firm. If your research is succe

You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $34 million. If your research is unsuccessful, it will be wor…

You are an entrepreneur starting a biotechnology firm. If your research is succe

You are an entrepreneur starting a biotechnology firm. If your research is successful, the technology can be sold for $27 million. If your research is unsuccessful, it will be wor…

You are an entrepreneur starting a technology fir·lf your research 1s successful

You are an entrepreneur starting a technology fir·lf your research 1s successful the echno ogy can be sold for $31 lion. I your researchi unsuccessful, it will be worth nothing. T…

You are an executive at WX Resorts and you have executive stock options as part

You are an executive at WX Resorts and you have executive stock options as part of your compensation. You hold 1,000 options that expire six months from today at a strike price of…

You are an expert security software programmer who works in top secret for the n

You are an expert security software programmer who works in top secret for the national government of the country of Zulu. Late one afternoon, you come across an ominous email in …

You are an industry analyst for the telecom sector. You are analyzing financial

You are an industry analyst for the telecom sector. You are analyzing financial reports from two companies: TT&T; Inc. and PhoneZ Corp. Corporate tax for both firms is 35%. Yo…

You are an intern in a CPA firm. Your manager walks into your cubicle and says,

You are an intern in a CPA firm. Your manager walks into your cubicle and says, “One of our clients is thinking about investing in a company. He wants to know how he should accoun…

You are an investor and are looking for opportunities where you can invest or sh

You are an investor and are looking for opportunities where you can invest or short sell in the coming 3-5 years (you have a medium to a long term horizon) . You are certain that …

You are an investor and you expect a US recession. Which of the following would

You are an investor and you expect a US recession. Which of the following would you expect to occur in the bond market during a US recession? (There is just one correct answer.) a…

You are an investor and you want to achieve the highestpossible return on your m

You are an investor and you want to achieve the highestpossible return on your money. Which would be best for you to do,everything else equal? a. Set aside funds on a quarterly ba…

You are an investor considering the purchase of an upscale office/warehouse “fle

You are an investor considering the purchase of an upscale office/warehouse “flex” building. The terms of the purchase are a price of $6,150,000 with 80% of the purchase price fin…

You are an investor in common stock, and you currently hold a well-diversified p

You are an investor in common stock, and you currently hold a well-diversified portfolio which has an expected return of 12 percent, a beta of 1.2, and a total value of $ 17 ,000.…

You are an investor with a large sum of money (or a company looking for an inves

You are an investor with a large sum of money (or a company looking for an investment), and buying either Home Depot or shares of stock in Home Depot. Determine, based on the comp…

You are an oil producer and you believe that oil prices are so insane these days

You are an oil producer and you believe that oil prices are so insane these days they ought to decline in the medium- to long-run. You see a December light sweet crude futures set…

You are an outdoor concert manager that is evaluating whether to have an outdoor

You are an outdoor concert manager that is evaluating whether to have an outdoor concert in Boston in April. The weather can be either good or bad, and the turnout for the concert…

You are an owner of a large land in Al-Wusta region. A geology expert from Schlu

You are an owner of a large land in Al-Wusta region. A geology expert from Schlumberger has told you that there is a chance of getting oil from your land. Based on his experience …

You are analyzing 2 projects. Details are as follows: Probability Exp. Return Po

You are analyzing 2 projects. Details are as follows: Probability                 Exp. Return                                     Poland           Costa Rica Best case    .30     …

You are analyzing ABC Company, a computer manufacturer. You notice that inventor

You are analyzing ABC Company, a computer manufacturer. You notice that inventory turnover this year is significantly lower than prior years. You also notice that accounts receiva…

You are analyzing Jillians Jewelry (JJ) stock for a possible purchase. JJ just p

You are analyzing Jillians Jewelry (JJ) stock for a possible purchase. JJ just paid a dividend of $1.00 yesterday. You expect the dividend to grow at the rate of 7% per year for t…

You are analyzing Jillians Jewelry (JJ) stock for a possible purchase. JJ just p

You are analyzing Jillians Jewelry (JJ) stock for a possible purchase. JJ just paid a dividend of $1.00 yesterday. You expect the dividend to grow at the rate of 7% per year for t…

You are analyzing Jillian’s Jewelry (JJ) stock for a possible purchase. JJ just

You are analyzing Jillian’s Jewelry (JJ) stock for a possible purchase. JJ just paid a dividend of $1.50 yesterday. You expect the dividend to grow at the rate of 8% per year for …

You are analyzing Tiffany Corp, an upscale retailer. The regression estimate of

You are analyzing Tiffany Corp, an upscale retailer. The regression estimate of the firm's beta is 0.75. Standard error of beta estimate is 0.50. The average unlevered beta of com…

You are analyzing a disressed bond with one year to maturity. The bond has a fac

You are analyzing a disressed bond with one year to maturity. The bond has a face value of $100 and pays a coupon rate 5 percent per year, with annual coupons. The bond is current…

You are analyzing a project and have developed the followingestimates. The depre

You are analyzing a project and have developed the followingestimates. The depreciation is $72,000 a year and the tax rate is35 percent. What is the operating cash flow? Unit Sale…

You are analyzing a project and have developed the followingestimates. The depre

You are analyzing a project and have developed the followingestimates. The depreciation is $72,000 a year and the tax rate is35 percent. What is the operating cash flow? Unit Sale…

You are analyzing a project and have prepared the following data: Year Cash Flow

You are analyzing a project and have prepared the following data: Year                  Cash Flow 0                        -$ 169,000 1                         $ 46,200 2         …

You are analyzing a project with an initial cost of £50,000. The project is expe

You are analyzing a project with an initial cost of £50,000. The project is expected to return £12,000 the first year, £36,000 the second year, and £40,000 the third and final yea…

You are analyzing a stock for inclusion in your portfolio. You are valuing it ba

You are analyzing a stock for inclusion in your portfolio. You are valuing it based the worth of its peers and you believe P/S and net profit margin are the best indicators for va…

You are analyzing a stock that has a beta of 1.18. The risk-free rate is 4.1% an

You are analyzing a stock that has a beta of 1.18. The risk-free rate is 4.1% and you estimate the market risk premium to be 7.3%. If you expect the stock to have a return of 10.9…

You are analyzing an expansion opp for Brahma, the Brazilian beverage firm, in B

You are analyzing an expansion opp for Brahma, the Brazilian beverage firm, in Brazil. The firm estimates that it will have to invest 1 billion Brazilian real today and that it wi…

You are analyzing the Operating cash flow for a proposed project. The equipment

You are analyzing the Operating cash flow for a proposed project. The equipment has a depreciable life of 6 years, the proposed life is 8 years. All revenue and operating expenses…