The firm has an after- tax cost of capital of 12%, and its tax rate is 40%. Last year the firm had $12 million of sales, with operating margin of 28%, while depreciation expense was $800,000, and interest expense $200,000. The firm had capital employ..
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Your firm is contemplating the purchase of a new $550,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $54,000 at the end of that time. At what level of pretax cost ..
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Suppose that the 3month risk-free rate of interest in the US was 2%. on the date the spot exchange rate between the US dollar the Euro was 1.1136 and the forward exchange rate for 3 months hence was 1.1228. According to interest rate parity, what wou..
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You purchased 1000 shares of stock in Cumberland Software for $3 per share on January 1, 2006. Over the next four years you received 7 cents per share annually in dividends. On December 31, 2009 you sell all your shares of Cumberland Software for $16..
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Allen Air Lines must liquidate some equipment that is being replaced. The equipment originally cost $22 million, of which 70% has been depreciated. The used equipment can be sold today for $7.7 million, and its tax rate is 35%. What is the equipment'..
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Six years ago the Singleton Company issued 16-year bonds with a 14% annual coupon rate at their $1,000 par value. The bonds had a 9% call premium, with 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of return ..
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During the year, Belyk Paving Co. had sales of $2,382,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,443,000, $436,800, and $491,800, respectively. In addition, the company had an interest expense of $2..
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A man is planning to retire in 25 years. He wishes to deposit a regular amount every three months until he retires, so that, beginning one year following his retirement, he will receive annual payments of $80,000 for the next 15 years. How much must ..
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Identify a national commercial bank (not the holding company) – one with total assets exceeding $10 billion. Ensure it is a commercial bank (not a savings bank, not a credit card company), or your assignment will not be considered. Note also, we are ..
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How, if at all, would you justify the use of the criminal law to control unfair trading practices? What are the advantages and disadvantages of imposing strict liability for criminal offences in the field of consumer protection?
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______________ is when derivatives are used to try and make money by taking on risk. A swap is a method for reducing financial risk. Which of the following statements about swaps is not correct? Suppose you believe that Du Pont’s stock price is going..
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Swenson’s is considering two mutually exclusive projects, Projects A and B, and has determined that the crossover rate for these projects is 11.7 percent.
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