Calculate the degree of operating given: sales of 25,000; variable costs of 13,000, operating income of 7,000 for year one, and sales of 40,000, variable costs of 15,000 and operating income of 16,000 for year 2. (Specifically, calculate difference b..
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Fabric Outlet has 17,500 shares of stock outstanding with a par value of $1 per share. The current market value of the firm is $1,280,000. The balance sheet shows a balance of $142,000 in the capital in excess of par value account and retained earnin..
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You just won a very special kind of lottery. Instead of receiving a large lump sum now, for tax reasons this lottery makes equal yearly payments of $ 5,760 for the rest of your life! The only catch is that you have to wait 2 years for the first payme..
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You are comparing two investment options that each pay 6 percent interest, compounded annually. Both options will provide you with $12,000 of income. Option A pays $2,000 the first year followed by two annual payments of $5,000 each. Option B pays th..
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You are considering investing $1,800 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 4% and a risky portfolio, P, constructed with two risky securities, X and Y. The optimal weights of X and Y in P are 60% and 4..
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Chick-Fil-A bonds currently sells for $1,025. They have a 9 year maturity, and 8% annual coupon, and a par value of $1,000. Assume that the yield to maturity remains constant for the next 3 years. What is the price 3 years from today?
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A construction company is investigating two forming options for a new hotel project. - The overhead of the project amounts to $90,000 per month. What is the most economical option?
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Which of the following ethical strategies can be potentially dangerous for multinational companies in normal business operations? If you were using the 9-Cell industry attractiveness/Business Strength Matrix, what is correct?
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A company's 8% coupon rate, semiannual payment, $1,000 par value bond that matures in 20 years sells at a price of $615.14. The company's federal-plus-state tax rate is 30%. What is the firm's after-tax component cost of debt for purposes of calculat..
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An investment has an installed cost of $532, 800. The cash flows over the four-year life of the investment are projected to be $216,850, $233,450, $200,110, and $148, 820.
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Time value of money and the lottery. A friend of yours by the name of Pam has asked you for financial advice. She recently won a state lottery and was asked by the lottery officials to choose between the following payout options:
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During 2009, Raines Umbrella Corp. had sales of $748,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $563,000, $100,000, and $126,000, respectively. In addition, the company had an interest expense of $100..
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