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Firm is reviewing project-what is the profitability index
: A firm is reviewing a project that has an initial cost of $25,000. The project will produce an annual cash inflows, starting with year 1, $4,000, $6,000,$9,300 and finally in year 4, $15,050. What is the profitability index if the discount rate is 5 ..
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What is the after tax salvage value of the asset
: An asset used in a four-year project falls in the five-year MACRS class for tax purposes. The asset has an acquisition cost of $6,030,000 and will be sold for $1,230,000 at the end of the project. If the tax rate is 34 percent, what is the after tax ..
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Specific on the tools of monetary policy
: The economy is slowing down, not growing and unemployment is going up. If you are on the Federal Reserve Board of Governors what type of policy would you pursue? Please be specific on the tools of monetary policy.
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Calculate tammys total return on this investment
: Tammy Jackson purchased 187 shares of All-American Manufacturing Company stock at $34.50 a share. One year later, she sold the stock for $43 a share. She paid her broker a $36 commission when she purchased the stock and a $45 commission when she sold..
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Advantages to buying mutual funds over individual stocks
: Explain mutual funds. Explain three advantages to buying mutual funds over individual stocks. Please explain the difference between an actively traded fund vs. and indexed fund.
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Differentiate between accrual accounting and cash basis
: Bob’s personal wealth including investments in land, stocks, and bonds is about $14,000,000. He reported an interest income of $20,000 and dividend income of $6,000 last year. The $14,000,000 includes land worth $9,000,000 that Bob bought in 1966 for..
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Amortization schedule
: Set up an amortization schedule for a $42,000 loan to be repaid in equal installments at the end of each of the next 3 years. The interest rate is 6% compounded annually. Round all answers to the nearest cent. What percentage of the payment represent..
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Evaluating an extra dividend versus share repurchase
: Wally’s Penguins is evaluating an extra dividend versus a share repurchase. In either case, $5,500 would be spent. Current earnings are $1 per share, and the stock currently sells for $27 per share. There are 2,500 shares outstanding. Ignore taxes an..
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Excess cash to complete a stock repurchase
: Remington’s has a market value equal to its book value. Currently, the firm has excess cash of $1,200, other assets of $5,800, and equity valued at $3,750. The firm has 250 shares of stock outstanding and net income of $420. What will the new earning..
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