A proposed new project has projected sales of $135,000, costs of $69,000, and depreciation of $13,800. The tax rate is 30 percent. Calculate operating cash flow using the four different approaches.
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The World Income Appreciation Fund has current assets with a market value of $4.8 billion and has 130 million shares outstanding. What is the net asset value (NAV) for this mutual fund? The World Income Appreciation Fund has current assets with a mar..
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Dobson Dairies has a capital structure, which consists of 60 percent long-term debt and 40 percent common stock. Assume the firm will be able to use retained earnings to fund the equity portion of its capital budget. What is the company’s weighted av..
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KCCO, Inc., has current assets of $5,200, net fixed assets of $25,200, current liabilities of $4,250, and long-term debt of $9,400. What is the value of the shareholders’ equity account for this firm? How much is net working capital?
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Assume that CAPM is valid. A share of stock is now selling for $105. It will pay a dividend of $7 per share at the end of the year. Its beta is 1. What do investors expect the stock to sell for at the end of the year? Assume the risk-free rate is 7% ..
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Two identical firms, A and B, have the same revenue of $10 million and equal variable and fixed costs for the current year. At the start of the year, they both owned $20,000,000 in equipment which follows a depreciation schedule of 5% per year. Ove..
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On January 1, 2015, Canden Company started to make annual deposits in order to accumulate $1,000,000 by January 1, 2019. This fund will earn annual interest of 9%. Required: What are the four annual deposits that Canden should make at the beginning o..
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Suppose that the tax rate on asset income is Tc and tax is leived on nominal interest income. Assume that the tax applies to the real returns on capital. what is the after tax real interest rate on bonds? consider permanet, unanticipated increase in ..
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Miller Brothers Hardware paid an annual dividend of $1.15 per share last month. Today, the company announced that future dividends will be increasing by 2.6 percent annually. If you require a 12 percent rate of return, how much are you willing to pay..
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Royal Troon Inc is planning to lease a computer for $6,500 per annum, payable in advance, for a period of 4 years. The lease will cover maintenance expenses. Royal Troon’s chairman feels that if he buys the same computer he should be able to sell it ..
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Balance Sheet as of December 31, 2013 (Thousands of Dollars) Cash $ 1,080 Accounts payable $ 4,320 Receivables 6,480 Accruals 2,880 Inventories 9,000 Line of credit 0 Total current assets $16,560 Notes payable 2,100 Net fixed assets 12,600. Use the f..
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On January 3d, 2007, Daimler-Chrysler expects to ship 10,000 cars from its Hyundai affiliated plant in Korea to the US, which it will sell through its US dealers on 240-day terms at $10,000 each. What is one other way they might they hedge their won/..
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