Financial literacy

1.) I have an investment that will pay me $20 every quarter for the next 5 years

1.) I have an investment that will pay me $20 every quarter for the next 5 years. Assuming that I want a 12% return compounded quarterly, what price should I pay for the investmen…

1.) If $100 is deposited in an account at the end of each year for 20 years at 3

1.) If $100 is deposited in an account at the end of each year for 20 years at 3.25% interest compounded annually, how much will be in the account at the end of twenty years? How …

1.) If there is bad information on your credit report, what is the best thing yo

1.) If there is bad information on your credit report, what is the best thing you can do? a. make on time payments b. keep your balances owed low c. get as much positive history b…

1.) If yout total assets equal $87,000 and your total liabilities equal $10,000;

1.) If yout total assets equal $87,000 and your total liabilities equal $10,000; your solvency ratio is? 2.) Jack and Jill have a montly income of $5000, but they pay $1000 per mo…

1.) In 1752, Britain consolidated all gov debt into a single issue called \"cons

1.) In 1752, Britain consolidated all gov debt into a single issue called "consol" bonds. Consol bonds were perpetual and initially paid an annual coupon of 3.5%. Since issue, the…

1.) Information about questions: ABC stock runs from 36-41 on big news. 1a) It i

1.) Information about questions: ABC stock runs from 36-41 on big news. 1a) It is December 18, and the ABC Jan 40 calls are now trading at $2.30. Is this option likely to be exerc…

1.) Initially, you have lost 20,000 dollars in the stock market and you continue

1.) Initially, you have lost 20,000 dollars in the stock market and you continue to lose 350 dollars per month. In how many months will it be before your losses total 33,040 dolla…

1.) It costs a beekeeper $2.42 to make each pint jar of honey, and she sells the

1.) It costs a beekeeper $2.42 to make each pint jar of honey, and she sells the jars to stores at a price of $3.51 each (netting $1.09 per pint jar). Her other monthly costs are …

1.) Jonesboro Corporation issued preferred stock with a stated dividend of 10% o

1.) Jonesboro Corporation issued preferred stock with a stated dividend of 10% of par. Preferred stock of this type currently yields 8%, and the par value is $100. Assume dividend…

1.) Kanye Company is evaluating the purchase of a rebuilt spot-welding machine t

1.) Kanye Company is evaluating the purchase of a rebuilt spot-welding machine to be used in the manufacture of a new product. The machine will cost $175,000, has an estimated use…

1.) Let be a generic function as discussed in class. dollar duration is: 2.)cons

1.) Let be a generic function as discussed in class. dollar duration is: 2.)consider a bond with maturity 4 year, 100 face value, coupon 5%, and yield 5%. compute a dollar duratio…

1.) MARKET/BOOK RATIO Jaster Jets has $10 billion in total assets. Its balance s

1.) MARKET/BOOK RATIO Jaster Jets has $10 billion in total assets. Its balance sheet shows $2.8 billion in current liabilities, $3 billion in long-term debt, and $4.2 billion in c…

1.) Ninja Co. issued 14-year bonds a year ago at a coupon rate of 7.4 percent. T

1.) Ninja Co. issued 14-year bonds a year ago at a coupon rate of 7.4 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.7 percent, what is the current bo…

1.) Nocioni Company issued $1,000,000 of bonds on January 1, 2012. - Prepare the

1.) Nocioni Company issued $1,000,000 of bonds on January 1, 2012. - Prepare the journal entry to record the issuance of the bonds if they are issued at 100%, 98% and 103%. - Prep…

1.) Old Time Savings Bank pays 3% interest on its savings accounts. If you depos

1.) Old Time Savings Bank pays 3% interest on its savings accounts. If you deposit $1,800 in the bank and leave it there, how much interest will you earn in the first year? The se…

1.) Personal After-Tax Corporate bonds issued by Johnson Corporation currently y

1.) Personal After-Tax    Corporate bonds issued by Johnson Corporation currently yield 8%. Municipal bonds of equal risk currently yield 6%. At what tax rate would an investor be…

1.) Phillips Equipment has 80,000 bonds outstanding that are selling at par. Bon

1.)Phillips Equipment has 80,000 bonds outstanding that are selling at par. Bonds with similar characteristics are yielding 7.5 percent. The company also has 750,000 shares of 7 p…

1.) Phone Home, Inc. is considering a new 5-year expansion project that requires

1.) Phone Home, Inc. is considering a new 5-year expansion project that requires an initial fixed asset investment of $2.484 million. The fixed asset will be depreciated straight-…

1.) Project K costs $75,000, its expected cash inflows are $15,000 per year for

1.) Project K costs $75,000, its expected cash inflows are $15,000 per year for 9 years, and its WACC is 10%. What is the project's NPV? Round your answer to the nearest cent. 2.)…

1.) SAS 99 requires auditors to identify risks that need further examination in

1.) SAS 99 requires auditors to identify risks that need further examination in order to determine the full extent of a possible fraud. (a) Name three of these risks and give exam…

1.) Should you focus on cash flows or accounting profits in making the capital-b

1.) Should you focus on cash flows or accounting profits in making the capital-budgeting decision? Should you be interested in incremental cash flows, incremental profits, total f…

1.) South Penn Trucking is financing a new truck with a loan of $10,000 to be re

1.) South Penn Trucking is financing a new truck with a loan of $10,000 to be repaid in 5 annual end of year installments of $2,504.56. What annual interest rate is the company pa…

1.) Suppose 1-year T-bills currently yield 7.00% and the future inflation rate i

1.) Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be constant at 3.20% per year. What is the real risk-free rate of return, r*? Disrega…

1.) Suppose you are running a capital budgeting analysis on a project with an es

1.) Suppose you are running a capital budgeting analysis on a project with an estimated cost of $2 million. The project is considered similar to the existing lines of businesses f…

1.) The Capital Market Line is considered an equilbrium model in that when an as

1.) The Capital Market Line is considered an equilbrium model in that when an asset is not on the line, market forces come into play to drive the asset back onto the CML. (True or…

1.) The Nelson Company has $1,687,500 in current assets and $675,000 in current

1.) The Nelson Company has $1,687,500 in current assets and $675,000 in current liabilities. Its initial inventory level is $405,000, and it will raise funds as additional notes p…

1.) The Shrieves Corporation has $25,000 that it plans to invest in marketable s

1.) The Shrieves Corporation has $25,000 that it plans to invest in marketable securities. It is choosing among AT&T bonds, which yield 8.75%, state of Florida muni bonds, whi…

1.) The assets of Dallas & Associates consist entirely of current assets and net

1.)  The assets of Dallas & Associates consist entirely of current assets and net plant and equipment.  The firm has total assets of $2.5 million and net plant and equipment e…

1.) The expected return on Kiwi Computers is 16.6 percent. If the risk-free rate

1.) The expected return on Kiwi Computers is 16.6 percent. If the risk-free rate is 4 percent and the expected return on the market is 10 percent, then what is Kiwi's beta? A.) 2.…

1.) The futures contracts on the SPX (S&P 500 Index) has a value of $250X the cu

1.) The futures contracts on the SPX (S&P 500 Index) has a value of $250X the current index value. Today, the index is at 2630 so the futures contracts has a value of $657,500…

1.) The next dividend payment by Blue Cheese, Inc., will be $1.56 per share. The

1.) The next dividend payment by Blue Cheese, Inc., will be $1.56 per share. The dividends are anticipated to maintain a growth rate of 4 percent forever. The stock currently sell…

1.) The president of Real Time Inc. has asked you to evaluate the proposed acqui

1.) The president of Real Time Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer's price is $ 80,000, and it falls into the MACRS 3-year clas…

1.) Time to reach a financial goal You have $44,524.78 in a brokerage account, a

1.) Time to reach a financial goal You have $44,524.78 in a brokerage account, and you plan to deposit an additional $4,000 at the end of every future year until your account tota…

1.) Ultimately, a firm\'s cost of capital is determined by: (select the best ans

1.) Ultimately, a firm's cost of capital is determined by: (select the best answer) a. What the board of directors of the company decides it should be b. Its cost of debt and equi…

1.) Uneven cash flow stream Find the present values of the following cash flow s

1.) Uneven cash flow stream Find the present values of the following cash flow streams at 7% compounded annually. Round your answers to the nearest cent. Stream A $   Stream B $  …

1.) WACC Shi Importer’s balance sheet shows $300 million in debt, $50 million in

1.) WACC    Shi Importer’s balance sheet shows $300 million in debt, $50 million in preferred stock, and $250 million in total common equity. Shi’s tax rate is 40%, rd= 6%, rps= 5…

1.) What advantage can broadband service bring to under-served areas of the worl

1.) What advantage can broadband service bring to under-served areas of the world? Is the Internet important for economic development? Why or why not? 2.) Prepare positions (give …

1.) What are the differences between the activity of “hedging” and the activity

1.) What are the differences between the activity of “hedging” and the activity of “speculating”? Using examples to demonstrate the differences 2.) A stock index currently stands …

1.) What investment accumulates more interest--15% compounded semiannually, or 1

1.) What investment accumulates more interest--15% compounded semiannually, or 14% compounded daily? The 15% option earns one percentage point more than the 14% option over a year…

1.) What is the EOQ for a firm that annually sells 8,000 units when the cost of

1.) What is the EOQ for a firm that annually sells 8,000 units when the cost of placing an order is $4 and the carrying costs are $3 a unit. 2.) DEF stock cost $80 and pays a $4 a…

1.) What is the limitation of using point estimates of exchange rates in the cap

1.) What is the limitation of using point estimates of exchange rates in the capital budgeting analysis? List the various techniques for adjusting risk in multinational capital bu…

1.) What is the maximum price you would pay for a common stock given that the ri

1.) What is the maximum price you would pay for a common stock given that the risk free rate of return is 4%, the current dividend is $6.00, the return on the average stock in the…

1.) What is the net present value of the following real estate investment discou

1.) What is the net present value of the following real estate investment discounted at 12%? *Year one - $10,000 *Year two - $12,000 *Year three - $8,000 *Year four - $5,000 2.) F…

1.) What is the present value of $1,500 received for 24 months in arrears, follo

1.) What is the present value of $1,500 received for 24 months in arrears, followed by $1,200 received for 36 months in arrears, if the annual discount rate appropriate is 9.25%? …

1.) Which financing will result in an issuer cost being less that the return bei

1.) Which financing will result in an issuer cost being less that the return being earned by the investor? a.Debt b.Common stock c.Retained earnings d.Preferred stock 2.) A compan…

1.) Which of the following is TRUE about payback period analysis? If a project w

1.) Which of the following is TRUE about payback period analysis? If a project will payback in the project life, then it must be a positive NPV project. Making investment decision…

1.) Which of the following is most likely a fixed cost? A.) Incometaxes, B.) The

1.) Which of the following is most likely a fixed cost? A.) Incometaxes, B.) The cost of merchandise sold, C.) Depreciation taken on equipment, D.) The cost of commissioned sales …

1.) Which of the following project(s) may have more than one IRR? year 0 1 2 3 4

1.) Which of the following project(s) may have more than one IRR? year 0 1 2 3 4 5 6 7 A -1,000,000 230,000 340,000 90,000 120,000 180,000 200,000 80,000 B -500,000 230,000 450,00…

1.) Winston Washers\'s stock price is $85 per share. Winston has $10 billion in

1.) Winston Washers's stock price is $85 per share. Winston has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term deb…

1.) You are currently earning 12% compounded semiannually. Your investment compa

1.) You are currently earning 12% compounded semiannually. Your investment company is switching all accounts to daily compounding. What rate will give you the same effective annua…