Financial literacy

1.Lansing Surgical Supplies, Inc., sells on terms of 2/10, net 30. Gross sales f

1.Lansing Surgical Supplies, Inc., sells on terms of 2/10, net 30. Gross sales for the year are $1,300,000 and the collections department estimates that 30 percent of the customer…

1.Last year, Miguel contributed nondepreciable property with a basis of $50,000

1.Last year, Miguel contributed nondepreciable property with a basis of $50,000 and a fair market value of $75,000 to the Starling Partnership in exchange for a 25% interest in th…

1.Last year, you purchased 200 shares of stock for $3,400. The stock pays an ann

1.Last year, you purchased 200 shares of stock for $3,400. The stock pays an annual dividend of $0.04 per share. Today, you sold your shares for $3,740. What is your total percent…

1.Life Insurance Obtain a term life insurance quote on yourself and compare it t

1.Life Insurance Obtain a term life insurance quote on yourself and compare it to a whole life insurance quote on yourself. Based on what you've read about life insurance, which w…

1.Maple Media is considering a proposal to enter a new line of business. In revi

1.Maple Media is considering a proposal to enter a new line of business. In reviewing the prorposal, the company's CFO is considering the following facts: -The new business will r…

1.Marty purchased a new 5 year class asset on March of this year. The asset was

1.Marty purchased a new 5 year class asset on March of this year. The asset was listed property (not an auto). It was used for business 60% of the time and personal use for the re…

1.Measuring Systematic Risk: Beta Coefficients The management of a publicly trad

1.Measuring Systematic Risk: Beta Coefficients The management of a publicly traded firm is interested in determining the firm’s cost of equity capital using the security market li…

1.MegaCorp just issued a five-year, $20,000 bond with a coupon rate of j 2 =4.02

1.MegaCorp just issued a five-year, $20,000 bond with a coupon rate of j2=4.02%. What price would an investor be willing to pay for the bond if they wanted a return on their inves…

1.Merger Valuation Hastings Corporation is interested in acquiring Vandell Corpo

1.Merger Valuation Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% d…

1.Messman Manufacturing will issue common stock to the public for $25. The expec

1.Messman Manufacturing will issue common stock to the public for $25. The expected dividend and growth in dividends are $2.00 per share and 4%, respectively. If the flotation cos…

1.National Geographic is replacing an old printing press with a new one. The old

1.National Geographic is replacing an old printing press with a new one. The old press is being sold for $350,000 and it has a net book value of $75,000. Assume that National Geog…

1.Now, you are convinced that the price of Twitter stock will only go up over th

1.Now, you are convinced that the price of Twitter stock will only go up over the next 3 months, from today’s price (May 1, 2016) of $15. Set up a strategy to profit from this poi…

1.Olin Transmissions, Inc., has the following estimates for its new gear assembl

1.Olin Transmissions, Inc., has the following estimates for its new gear assembly project: price = $1677 per unit; variable costs = $298 per unit; fixed costs = $4016689; quantity…

1.On pretax and basis The S&P 500 Index outperformed the BlackRock Capital Appre

1.On  pretax and basis The S&P 500 Index outperformed the BlackRock Capital Appreciation Fund between 9/2003 and 9/2012. True or False? 2.You are given the following informati…

1.On the balance sheet, total assets must always equal the sum of total liabilit

1.On the balance sheet, total assets must always equal the sum of total liabilities plus equity. a. True b. False 2. Which of the following statements is CORRECT? a. The balance s…

1.One of the shortcomings of traditional managerial accounting systems is that a

1.One of the shortcomings of traditional managerial accounting systems is that a. very little emphasis is put on reducing costs b. too much effort is focused on product quality c.…

1.Organic Produce Corporation has 7.5 million shares of common stock outstanding

1.Organic Produce Corporation has 7.5 million shares of common stock outstanding, 500,000 shares of 7% preferred stock outstanding, and 175,000 of 8.2% semiannual bonds outstandin…

1.Organizations that decide to issue bonds generally go through a series of step

1.Organizations that decide to issue bonds generally go through a series of steps. Discuss the six steps. 2.An alternative to traditional equity and debt financing is leasing. Lea…

1.Over the past 5 years the earnings per share (EPS) of a local firm have grown

1.Over the past 5 years the earnings per share (EPS) of a local firm have grown from $0.62 to $0.91. If an investor in this firm is assumed to have a required rate of return of 14…

1.Over the past 5 years the earnings per share (EPS) of a local firm have grown

1.Over the past 5 years the earnings per share (EPS) of a local firm have grown from $0.62 to $0.91. If an investor in this firm is assumed to have a required rate of return of 14…

1.PQR, Inc. uses $ 1.2 Million in Total Assets to support it current operations.

1.PQR, Inc. uses $ 1.2 Million in Total Assets to support it current operations. Its capital structure is $ 700,000 Debt and $ 150,000 in Common Stock and $ 350,00 in Retained Ear…

1.Please explain the interest rates said ( interest rate parity:IRP ) theory, if

1.Please explain the interest rates said ( interest rate parity:IRP ) theory, if Mexico 6 - month interest rates for the United States, 7 % 5 %, according to the IRP the theory of…

1.Procter & Gamble reported the following information for its fiscal year end: O

1.Procter & Gamble reported the following information for its fiscal year end: On net sales of $47.902 billion, the company earned net income after taxes of $4.725 billion. It…

1.Project B requires an Initial (Year 0) Investment of $5,000,000; and will retu

1.Project B requires an Initial (Year 0) Investment of $5,000,000; and will return $1,115,000 for each year of its five year useful life. What is the project's Internal Rate of Re…

1.Project B requires an Initial (Year 0) Investment of $5,000,000; and will retu

1.Project B requires an Initial (Year 0) Investment of $5,000,000; and will return $1,115,000 for each year of its five year useful life. What is the project's Internal Rate of Re…

1.Provide two definitions for the term: Place, and provide an example for each d

1.Provide two definitions for the term: Place, and provide an example for each definition that displays its importance. 2.Define the concepts of logistics and JIT. Explain three k…

1.Puckett Inc. risk-adjusts its WACC to account for project risk. It uses a WACC

1.Puckett Inc. risk-adjusts its WACC to account for project risk. It uses a WACC of 8% for below-average risk projects, 10% for average-risk projects, and 12% for above-average ri…

1.Quantitative Problem: After a 4-for-1 stock split, Perry Enterprises paid a di

1.Quantitative Problem: After a 4-for-1 stock split, Perry Enterprises paid a dividend of $1.40 per new share, which represents a 8% increase over last year's pre-split dividend. …

1.Quantitative Problem: Currently, Meyers Manufacturing Enterprises (MME) has a

1.Quantitative Problem: Currently, Meyers Manufacturing Enterprises (MME) has a capital structure consisting of 35% debt and 65% equity. MME's debt currently has a 7% yield to mat…

1.Ratio Analysis of a firm\'s financial statements is only meaningful if ratios

1.Ratio Analysis of a firm's financial statements is only meaningful if ratios are compared to an appropriate standard OR they are part of a trend analysis of firm activities over…

1.Returns on shares of Lattice are predicted as follows: Lattice earns 0.10 retu

1.Returns on shares of Lattice are predicted as follows: Lattice earns 0.10 return in recession and 0.20 return in a boom. An economist attributes a 0.40 chance of a recession and…

1.Reverse stock splits will __________ Increase the total wealth of stockholders

1.Reverse stock splits will __________ Increase the total wealth of stockholders. Reduce retained earnings. Increase the number of shares to stockholders. Decrease the number of s…

1.Rock Hill Brewery is planning to issue 10-year bonds. The current market yield

1.Rock Hill Brewery is planning to issue 10-year bonds. The current market yield for such bonds is 8.125 percent. Assume that coupon payments are made semiannually. Management is …

1.Sasha owns two investments, A and B, that have a combined total value of 48,70

1.Sasha owns two investments, A and B, that have a combined total value of 48,700 dollars. Investment A is expected to pay 21,100 dollars in 1 year(s) from today and has an expect…

1.Several years ago, Bill Smith borrowed $125,000 to buy his house. He has a 15

1.Several years ago, Bill Smith borrowed $125,000 to buy his house. He has a 15 year, monthly payment mortgage with an interest rate of 8.75 percent per annum. Bill is thinking ab…

1.Sisters Corp expects to earn $5 per share next year. The firm’s ROE is 14% and

1.Sisters Corp expects to earn $5 per share next year. The firm’s ROE is 14% and its plowback ratio is 60%. If the firm’s market capitalization rate is 10%. Calculate the price wi…

1.Stock B has expected return of 16% and standard deviation of 35%. Stock C has

1.Stock B has expected return of 16% and standard deviation of 35%. Stock C has expected return of 12% and standard deviation of 22%. Their returns have correlation of 0.1474. For…

1.Summarize in 1 to 2 paragraphs (in notes area) what you have learned about you

1.Summarize in 1 to 2 paragraphs (in notes area) what you have learned about your company. Based on what you have learned would you be interested in investing in the stock of your…

1.Suppose 2-year Treasury bonds yield 4.5%, while 1-year bonds yield 3%. r* is 1

1.Suppose 2-year Treasury bonds yield 4.5%, while 1-year bonds yield 3%. r* is 1%, and the maturity risk premium is zero. Use minus sign for any negative expected inflation rate. …

1.Suppose that a stock is expected to pay a $1 dividend at the end of this year

1.Suppose that a stock is expected to pay a $1 dividend at the end of this year and that your required return on equity investments is 9%. Using a one-period model of stock price …

1.Suppose that the risk-free rate is 5% and the market portfolio has an expected

1.Suppose that the risk-free rate is 5% and the market portfolio has an expected return of 13% with a volatility of 18%. Monsters Inc. has a 24% volatility and a correlation with …

1.Suppose the current one-year Treasury Bill rate is 6%, the current three-year

1.Suppose the current one-year Treasury Bill rate is 6%, the current three-year Treasury Bond rate is 6.1%, and the current five-year Treasury Bond rate is 6.2%. According to the …

1.Suppose two factors are identified for the U.S. economy: the growth rate of in

1.Suppose two factors are identified for the U.S. economy: the growth rate of industrial production, IP, and the inflation rate, IR. IP is expected to be 3% and IR 6%. A stock wit…

1.Suppose you borrow $20,000 at t=0 and the interest rate on the loan is 12.3% p

1.Suppose you borrow $20,000 at t=0 and the interest rate on the loan is 12.3% p.a. You amortize the loan in three installments by making equal payments at t=7, t=8 and t=9. What …

1.Suppose you own two assets with the following payouts. (1) $250 at the end of

1.Suppose you own two assets with the following payouts. (1) $250 at the end of every year starting 1 year from now. The annual cost of capital for these cash flows is 12%. (2) $8…

1.Suppose you sell a fixed asset for $116,000 when its book value is $136,000. I

1.Suppose you sell a fixed asset for $116,000 when its book value is $136,000. If your company’s marginal tax rate is 35 percent, what will be the effect on cash flows of this sal…

1.Suppose you want to price a call option on WWW Inc. The current stock price of

1.Suppose you want to price a call option on WWW Inc. The current stock price of WWW is $60. The risk-free rate is 3%. What is the appropriate price of the 1 year call option of W…

1.T or F: The dividend payout ratio includes both stock dividends and cash divid

1.T or F: The dividend payout ratio includes both stock dividends and cash dividends. 2.T or F: Firms with extra money should always repurchase their own stock, thus increasing th…

1.TIME TO REACH A FINANCIAL GOAL You have $56,930.69 in a brokerage account, and

1.TIME TO REACH A FINANCIAL GOAL You have $56,930.69 in a brokerage account, and you plan to deposit an additional $3,000 at the end of every future year until your account totals…

1.The 6-month Treasury bill spot rate is 4 percent, and the 1-year Treasury bill

1.The 6-month Treasury bill spot rate is 4 percent, and the 1-year Treasury bill spot rate is 5 percent. The implied 6-month forward rate 6 months from now is which of the followi…