Financial literacy

5. (15 pts) The site for a major county public works project is under considerat

5. (15 pts) The site for a major county public works project is under consideration. Four sites have met all the county's criteria for the project, and a benefit-cost analysis is …

5. (20 points) Consider the following list of projects (data in millions): PW (1

5. (20 points) Consider the following list of projects (data in millions): PW (15%) $716 $757 $179 oPW $544 $616 $40 Alternative Payback Investment $471 $465 $405 2 4 2 Assume tha…

5. (20 points) Wallazon (ticker WAZ) is a new firm that specializes in the sale

5. (20 points) Wallazon (ticker WAZ) is a new firm that specializes in the sale of highly profitable walls on-line to generate excess free cash flows to (i) subsidize Wallazon web…

5. (4 Points) Assume that you can invest in two securities: Stock A and Stock Z.

5. (4 Points) Assume that you can invest in two securities: Stock A and Stock Z. There are five possible outcomes next period. The probability of each outcome and the return offer…

5. (4 points) Which of the following statements is CORRECT? If a project has \"n

5. (4 points) Which of the following statements is CORRECT? If a project has "normal" cash flows, then its MIRR must be positive. Ifa project has "normal" cash flows, then it will…

5. (6 points) A bank has $95 million of assets with duration of 10 years, and li

5. (6 points) A bank has $95 million of assets with duration of 10 years, and liabilities worth $86 million with duration of 2 years. Since the bank is concerned about preserving …

5. (6 points) A bank has $95 million of assets with duration of 10 years, and li

5. (6 points) A bank has $95 million of assets with duration of 10 years, and liabilities worth $86 million with duration of 2 years. Since the bank is concerned about preserving …

5. (6 points) A bank has $95 million of assets with duration of 10 years, and li

5. (6 points) A bank has $95 million of assets with duration of 10 years, and liabilities worth $86 million with duration of 2 years. Since the bank is concerned about preserving …

5. (6 pts) Consider the following investments: Net Cash Floww Project 1 Project2

5. (6 pts) Consider the following investments: Net Cash Floww Project 1 Project2 Project 3 $2,000 1,500 2,000 -$1,000 500 2,500 $5,000 7,500 600 0 Assume that MARR = 15% a) Comput…

5. (Capital rationing) Consider the following capital budgeting projects: PROFIT

5. (Capital rationing) Consider the following capital budgeting projects: PROFITABILITY INDEX PROJECT OUTLAY NPV PV RANK (1 = HIGHEST PD $150 60 $210 105 405 60 260 9 1.40 1.35 1.…

5. (Dual-class shares): VMware (VMW) discloses the following information VMW Vot

5. (Dual-class shares): VMware (VMW) discloses the following information VMW Votes share | # of shares outstanding # of shares outstanding held million v EMC (million A share B sh…

5. (Lecture note page 23-26, 34-37, see Excel version of the example for detail

5. (Lecture note page 23-26, 34-37, see Excel version of the example for detail Capital eqipment costing $430,000 today has $80,000 accounting salvage value at the end of fifth ye…

5. (Providing downside protection - Writing a covered call) Today is December 7,

5. (Providing downside protection - Writing a covered call) Today is December 7, 2015. Suppose that you decide to write a covered call on 100 shares of Merck (MRK) common stock th…

5. (Related to Checkpoint 5.2) (Compound interest with non-annual periods) You j

5. (Related to Checkpoint 5.2) (Compound interest with non-annual periods) You just received a bonus of $1,000 a. Calculate the future value of $1,000, given that it will be held …

5. (Related to Checkpoint 5.2) (Compound interest with non-annual periods) You j

5. (Related to Checkpoint 5.2) (Compound interest with non-annual periods) You just received a bonus of $1,000 a. Calculate the future value of $1,000, given that it will be held …

5. (Related to Checkpoint 5.2) (Compound interest with non-annual periods) You j

5. (Related to Checkpoint 5.2) (Compound interest with non-annual periods) You just received a bonus of $4,000 a. Calculate the future value of $4,000, given that it will be held …

5. (TCO 2) Which of the following sources of capital is not likely to be used by

5. (TCO 2) Which of the following sources of capital is not likely to be used by companies in the development stage? (Points : 4) Family loans Bank loans Venture capital Corporate…

5. (TCO 2) Which of the following statements is true? Select all that apply: (Po

5. (TCO 2) Which of the following statements is true? Select all that apply: (Points : 3) The optimal credit policy minimizes the total cost of granting credit. Firms should avoid…

5. (TCO 2) Which of the following statements is true? Select all that apply: (Po

5. (TCO 2) Which of the following statements is true? Select all that apply: (Points : 3) The optimal credit policy minimizes the total cost of granting credit. There is an opport…

5. (TCO 5) The financial futures market has evolved recently because of (Points

5. (TCO 5) The financial futures market has evolved recently because of (Points : 4) volatility and risk in the foreign exchange markets. the volatility of interest rates. appeal …

5. (TCO 5) Which of the following is not true regarding the cost of retained ear

5. (TCO 5) Which of the following is not true regarding the cost of retained earnings? (Points : 4) it is relevant to the WACC does not require new funds to be raised has associat…

5. (TCO G) Based on the corporate valuation model, Bernile Inc.\'s value of oper

5. (TCO G) Based on the corporate valuation model, Bernile Inc.'s value of operations is $750 million. Its balance sheet shows $50 million of short-term investments that are unrel…

5. (calculating the cost of common stock, or common equity per the dividend grow

5. (calculating the cost of common stock, or common equity per the dividend growth model approach) Your firm’s common stock is selling for $37.00 a share and it paid a dividend la…

5. 14.28 points You did not receive full credit for this question in a previous

5. 14.28 points You did not receive full credit for this question in a previous attempt Chapter 9-Assignment Your firm is contemplating the purchase of a new S794,500 computer-bas…

5. 15 points. Below is information on interest rates, inflation rates, and a spo

5. 15 points. Below is information on interest rates, inflation rates, and a spot and 1-year forward exchange rate for the US dollar and the British Pound Interest rate (1-yr Infl…

5. 5. BETA AND REQUIRED RATE OF RETURN A stock has a required return of 15%; the

5. 5. BETA AND REQUIRED RATE OF RETURN A stock has a required return of 15%; the risk-free rate is 3.5%; and the market risk premium is 4%. What is the stock's beta? Round your an…

5. A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corpora

5. A Treasury bond that matures in 10 years has a yield of 6%. A 10-year corporate bond has a yield of 9%. Assume that the liquidity premium on the corporate bond is 0.4%. What is…

5. A capital budgeting project has a positive net present value. The internal ra

5. A capital budgeting project has a positive net present value. The internal rate of return of the project MUST A. be less than the cost of capital. B. be greater than the cost o…

5. A company uses the percent of sales method to determine its bad debts expense

5. A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following sel…

5. A company wants to obtain funds to meet its financing needs short term. For t

5. A company wants to obtain funds to meet its financing needs short term. For that, it agrees with a financial institution to sell 5 treasury bills of nominal 1000 euros, which i…

5. A company «X» is planning to issue bonds with Face Value of 1000 rubles and a

5. A company «X» is planning to issue bonds with Face Value of 1000 rubles and annual coupon rate of 8%. Bonds will mature in 5 years. coupons are paid annually. The number of out…

5. A firm has determined that the net present values (NPVs) for three projects a

5. A firm has determined that the net present values (NPVs) for three projects are $10,000, $15,000 and negative $5,000, respectively. The projects have the same risk. Which of th…

5. A firm will exercise its option to call a bond if interest rates rise. Questi

5.  A firm will exercise its option to call a bond if interest rates rise. Question 5 options: a) True b) False 6. A Euro-bond is denominated in the currency of a European nation.…

5. A hydraulie fracturing project has an initial cost of S30 million. The projec

5. A hydraulie fracturing project has an initial cost of S30 million. The project will yield 120,000 barrels of crude oil per year for 5 years. Crude oil sells for $60 per barrel …

5. A loan shark offers to lend money at terms you cannot refuse. You borrow prin

5. A loan shark offers to lend money at terms you cannot refuse. You borrow principal P dollars, then each day the loan shark adds a service fee of 25 cents to what you owe, follo…

5. A new furnace will cost $27,000 to install and will require maintenance of $1

5. A new furnace will cost $27,000 to install and will require maintenance of $1,500 a year. But it is more efficient than your old furnace and will reduce your heating oil consum…

5. A portfolio is currently worth $600,000 and has a beta of 1.0. A stock index

5. A portfolio is currently worth $600,000 and has a beta of 1.0. A stock index is currently at 1200. Put options with a strike price of 1100 will be used to provide portfolio ins…

5. A portfolio is invested 40% in stock A, 30% in stock B, and 30% in stock C. A

5. A portfolio is invested 40% in stock A, 30% in stock B, and 30% in stock C. Assuming that the returns are normally distributed, what is the 68% probability range of returns for…

5. A project has the following estimated data: price = $74 per unit; variable co

5. A project has the following estimated data: price = $74 per unit; variable costs = $47 per unit; fixed costs = $22,500; required return = 8 percent; initial investment = $24,00…

5. A project that provides annual cash flows of $18,000 for ten years costs $86,

5. A project that provides annual cash flows of $18,000 for ten years costs $86,000 today.    What is the NPV for the project if the required return is 9 percent? (Do not round in…

5. A put and call option are written on the same underlying stock and they are b

5. A put and call option are written on the same underlying stock and they are both exactly at the money. Both are European options with the same expiration date, which is several…

5. A put option in finance allows you to sell a share of stock in the future at

5. A put option in finance allows you to sell a share of stock in the future at a given price. There are different types of put options. A European put option allows you to sell a…

5. A tem-year corpoate bond has a 7 percent coupon rate. What should be the bond

5. A tem-year corpoate bond has a 7 percent coupon rate. What should be the bond's price today if the required return is 8 percent and the bond pays interest annually? Face value …

5. According to the “Bird-in-the-Hand” theory, a. stockholders prefer to have ne

5. According to the “Bird-in-the-Hand” theory, a. stockholders prefer to have net income reinvested in the company as retained earnings. b. stockholders prefer capital gains retur…

5. Acetate, Inc., has equity with a market value of $23.9 million and debt with

5. Acetate, Inc., has equity with a market value of $23.9 million and debt with a market value of $7.17 million. Treasury bills that mature in one year yield 5 percent per year, a…

5. Albertson, Inc., a food company, recently issued a 2-year note that pays a 3%

5. Albertson, Inc., a food company, recently issued a 2-year note that pays a 3% coupon rate (paid annually) and expires on August 15, 2019. The current price of this note is 100-…

5. An $11,000, 12%, 40 day note, dated Nov. 3, is discounted at9% on Nov. 30. Th

5. An $11,000, 12%, 40 day note, dated Nov. 3, is discounted at9% on Nov. 30. The proceeds of the note would be: A) $11,182.90 B) $11,000.00 C) $11,110.44 D) $11,114.10 Please sho…

5. An important financial institution that assists in the initial sale of securi

5. An important financial institution that assists in the initial sale of securities in the primary market is the: (Points : 3)        investment bank        commercial bank      …

5. An insurance agent makes this offer: If you pay him $50,000 today, we will pa

5. An insurance agent makes this offer: If you pay him $50,000 today, we will pay you annual annuity payments of $5,000 for 15 years . If you can earn 5.13% on alternative investm…

5. An investment of $1,250,000 is made in equipment that qualifies as 7-year equ

5. An investment of $1,250,000 is made in equipment that qualifies as 7-year equipment for MACRS- GDS depreciation. Measured in constant dollars, the investment yields annual retu…