Financial literacy

A five-year project has an initial fixed asset investment of $315,000, an initia

A five-year project has an initial fixed asset investment of $315,000, an initial NWC investment of $25,000, and an annual OCF of $35,000. The fixed asset is fully depreciated ove…

A five-year project has an initial fixed asset investment of $325,000, an initia

A five-year project has an initial fixed asset investment of $325,000, an initial NWC investment of $33,000, and an annual OCF of $32,000. The fixed asset is fully depreciated ove…

A five-year project has an initial fixed asset investment of $340,000, an initia

A five-year project has an initial fixed asset investment of $340,000, an initial NWC investment of $36,000, and an annual OCF of $35,000. The fixed asset is fully depreciated ove…

A five-year project has an initial fixed asset investment of $345,000, an initia

A five-year project has an initial fixed asset investment of $345,000, an initial NWC investment of $37,000, and an annual OCF of -$36,000. The fixed asset is fully depreciated ov…

A five-year project has an initial fixed asset investment of $355,000, an initia

A five-year project has an initial fixed asset investment of $355,000, an initial NWC investment of $39,000, and an annual OCF of -$38,000. The fixed asset is fully depreciated ov…

A floor is created by combining a... purchased put option with a long position i

A floor is created by combining a... purchased put option with a long position in the underlying stock. purchased put option with a short position in the underlying stock. purchas…

A football team is considering signing a star quarterback to $8 million per year

A football team is considering signing a star quarterback to $8 million per year for a total of 4 years with an initial signing bonus of $1.2 million. (The signing bonus is paid i…

A for acuisitions is synergy. Synergy includes: A revenue enhancements. B. cost

A for acuisitions is synergy. Synergy includes: A revenue enhancements. B. cost reductions. C. lower taxes. D. All of these. E. None of these. Use the tollowing Iinformation to an…

A for profit nursing home chain has paid a $4 per share dividend for many years

A for profit nursing home chain has paid a $4 per share dividend for many years and expectations are the dividends will continue at that level for years to come. If investors requ…

A foreign exchange arbitrageur notices that the Japanese yen to U.S. dollar spot

A foreign exchange arbitrageur notices that the Japanese yen to U.S. dollar spot exchange rate is ¥108/$ and the three-month forward exchange rate is ¥107.30/$. The three-month $ …

A foreign exchange dealer has $1 million for a short-term money market investmen

A foreign exchange dealer has $1 million for a short-term money market investment. That is, he wants minimal risk in his investment, but he still wants to maximize the available r…

A foreign exchange dealer has $1 million for a short-term money market investmen

A foreign exchange dealer has $1 million for a short-term money market investment. That is, he wants minimal risk in his investment, but he still wants to maximize the available r…

A foreign exchange trader at Goldman Sachs can invest $1.2 million, or the forei

A foreign exchange trader at Goldman Sachs can invest $1.2 million, or the foreign currency equivalent of the bank's short term funds, in a covered interest arbitrage with British…

A foreign exchange trader at J.P. Morgan Chase, can invest S5 million, or the fo

A foreign exchange trader at J.P. Morgan Chase, can invest S5 million, or the foreign currency equivalent of the bank's shortterm funds, in a covered interest arbitrage with Denma…

A foreign exchange trader faces the following quotes: Spot rate (¥/€) 148.0 3-mo

A foreign exchange trader faces the following quotes: Spot rate (¥/€) 148.0 3-month forward rate (¥/€) 145.0 3-month Japanese yen interest rate (annualized) 1.0% 3-month European …

A foreign investor bough 2 millions lot (1 lot: 100 shares) share of stock at $9

A foreign investor bough 2 millions lot (1 lot: 100 shares) share of stock at $9,500/share. After 6 months, the price has risen to $10,200/share and pay dividend at $100/share. In…

A forklift will last for only 2 more years. It costs $5,000 a year to maintain.

A forklift will last for only 2 more years. It costs $5,000 a year to maintain. For $20,000 you can buy a new lift that can last for 10 years and should require maintenance costs …

A forklift will last for only 2 more years. It costs $5,300 a year to maintain.

A forklift will last for only 2 more years. It costs $5,300 a year to maintain. For $23,000 you can buy a new lift that can last for 10 years and should require maintenance costs …

A forklift will last for only 2 more years. It costs $5,800 a year to maintain.

A forklift will last for only 2 more years. It costs $5,800 a year to maintain. For $20,000 you can buy a new lift that can last for 9 years and should require maintenance costs o…

A forklift will last for only 3 more years. It costs $6,000 a year to maintain.

A forklift will last for only 3 more years. It costs $6,000 a year to maintain. For $17,000 you can buy a new lift that can last for 8 years and should require maintenance costs o…

A former employee of Chrysler-Benz is vested in the company’s pension plan. The

A former employee of Chrysler-Benz is vested in the company’s pension plan. The pension benefit would pay him $220/month for the remainder of his life starting next month. The com…

A forward exchange contract a. gives the owner the right, but not the obligation

A forward exchange contract a. gives the owner the right, but not the obligation, to buy aforeign currency at a fixed exchange rate for a fixed period oftime. b. gives the owner t…

A forward exchange contract a. requires delivery within two working days, of one

A forward exchange contract a. requires delivery within two working days, of one currency for a specified amount of another currency b. gives the owner the right to purchase a for…

A forward rate agreement for $3,000,000 was entered into a month ago for a three

A forward rate agreement for $3,000,000 was entered into a month ago for a three months period of time that will begin nine months from today. Current zero rates are provided in t…

A founder (F) develops a startup (SU) in his garage. A neighboring angel (A) off

A founder (F) develops a startup (SU) in his garage. A neighboring angel (A) offers $1M for 25% of SU. They (F&A;) decide - arbitrarily- to have SU comprised of 4,000 shares a…

A founder, F, develops a product in his/her garage. F and some family and friend

A founder, F, develops a product in his/her garage. F and some family and friends money (call the total FFF) have invested $1MM of their money in this startup (SU). They award the…

A four month (120 day) call option on a certain stock has an exercise (strike) p

A four month (120 day) call option on a certain stock has an exercise (strike) price of $62 and is currently selling for $10. If the corresponding put option for this same stock (…

A four year project costs $1.7 million and has straight-line depreciation. Sales

A four year project costs $1.7 million and has straight-line depreciation. Sales of 190 units per year are projected, with a unit sales price of $18,000. Variable costs per unit a…

A freestanding imaging center is considering adding a new modality to its busine

A freestanding imaging center is considering adding a new modality to its business. They can either purchase a CT scanner or an MRI scanner. The CT scanner will cost $800,000, wil…

A frequent criticism of the management of publicly-owned American companies is t

A frequent criticism of the management of publicly-owned American companies is that they are too short-term oriented, too focused on fast returns, and that this negatively impacts…

A friend announces a plan to benchmark the performance of his small-cap stocks w

A friend announces a plan to benchmark the performance of his small-cap stocks with the S&P 500. Which of the following concerns should dominate your thoughts? A. The risk and…

A friend asked you to help him determine the operating cash flow for a new drink

A friend asked you to help him determine the operating cash flow for a new drink business at padre island for spring break and he needs to take the NPV analysis to a bank for fina…

A friend asked you to help him determine the operating cash flow for a new drink

A friend asked you to help him determine the operating cash flow for a new drink business at padre island for spring break and he needs to take the NPV analysis to a bank for fina…

A friend asks to borrow $49 from you and in return will pay you $52 in one year.

A friend asks to borrow $49 from you and in return will pay you $52 in one year. If your bank is offering a 5.6% interest rate on deposits and loans: a. How much would you have in…

A friend asks to borrow $52 from you and in return will pay you $55 in one year

A friend asks to borrow $52 from you and in return will pay you $55 in one year if your bank is offering a 61% interest rate on deposits and loans: a. How much would you have in o…

A friend came into your office and said that his bank was out to kill small busi

   A friend came into your office and said that his bank was out to kill small businesses. You asked him what he meant by this remark, and he said that he read an article that sai…

A friend of yours is trying to value the equity of a company and, knowing that y

A friend of yours is trying to value the equity of a company and, knowing that you have read this book, has asked for your help. So far she has tried to use the FCFE approach. She…

A friend of yours is trying to value the equity of a company and, knowing that y

A friend of yours is trying to value the equity of a company and, knowing that you have read this book, has asked for your help. So far she has tried to use the FCFE approach. She…

A friend of yours tells you that in China two year zero coupon U.S. treasury bon

A friend of yours tells you that in China two year zero coupon U.S. treasury bonds, 100 par sell for $95. What is the annualized risk-free rate in this example? You happen to noti…

A friend of yours wants to start saving for his anticipated retirement and make

A friend of yours wants to start saving for his anticipated retirement and make equal annual deposits into his retirement account. He intends to retire in 30 years and believes he…

A friend of yours wants to start saving for his anticipated retirement and make

A friend of yours wants to start saving for his anticipated retirement and make equal annual deposits into his retirement account. He intends to retire in 30 years and believes he…

A friend says that she expects to earn 13.00% on her portfolio with a beta of 2.

A friend says that she expects to earn 13.00% on her portfolio with a beta of 2.25. You have a two-asset portfolio including stock X and a risk-free security. The expected return …

A friend wants to retire in 30 years when he is 65. At age 35, he can invest $50

A friend wants to retire in 30 years when he is 65. At age 35, he can invest $500/month that earns 5% each year. But he is thinking of waiting 15 years when he is age 50, and then…

A friend wants to work for 2 years then return to school full time for a master’

A friend wants to work for 2 years then return to school full time for a master’s degree. OPTION A: He can invest $1,000/month in a mutual fund that earns 6% annually, for 2 years…

A fully amortizing loan has the following terms and conditions: Interest Rate: 6

A fully amortizing loan has the following terms and conditions: Interest Rate: 6 % per annum Term: 20 years Original Loan Amount: $395,000 1) If the lender expects the loan to be …

A fund manager has a portfolio worth $50 million with a beta of 1.35. The manage

A fund manager has a portfolio worth $50 million with a beta of 1.35. The manager is concerned about the performance of the market over the next three months and plans to use four…

A fund manager has £500m to invest of which 80% is invested into an equity fund.

A fund manager has £500m to invest of which 80% is invested into an equity fund. The remaining 20% is invested in a separate cash fund. On the last day of each quarter, further mo…

A fund of funds divides its money between five hedge funds that earn 5%, 1%, 10%

A fund of funds divides its money between five hedge funds that earn 5%, 1%, 10%, 15%, and 20% before fees in a particular year. The fund of funds charges 1 plus 10% and the hedge…

A fund of funds divides its money between five hedge funds that earn –5%, 1%, 10

A fund of funds divides its money between five hedge funds that earn –5%, 1%, 10%, 15%, and 20% before fees in a particular year. The fund of funds charges 1 plus 10% and the hedg…

A funds manager manages a diversified Australian share portfolio, but is concern

A funds manager manages a diversified Australian share portfolio, but is concerned that stock prices in the market will fall over the next three months. The manager decides to hed…