The most recent financial statements for Dockett, Inc., are shown here (assuming no income taxes): Income Statement Sales $ 8,600 Costs 5,630 Net income $ 2,970. Assets and costs are proportional to sales. Debt and equity are not. No dividends are pa..
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After reviewing the firm’s financial statements, it was determined that the firm’s ROE was 15%. The debt ratio is 30%, and the total asset turnover TAT, is 2.4 times. What is the profit margin? First you must determine the equity ratio ______%, and o..
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Huskers Inc. is considering to build a bowling ball manufacturing facility. Find the NPV and IRR of the project using the information given below: Cost of test marketing already spent: $300,000. Current after-tax market value of the proposed factory ..
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A bank offers an investment opportunity, which requires you to invest 10,000 today and the bank promises to return 15,000 in 10 years. What is the embedded interest rate offered by the bank? You require $500,000 at the end of your retirement, which i..
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You own a bond with the following features: 7 years to maturity, face value of $1000, coupon rate of 3% (annual coupons) and yield to maturity of 2.8%. Just after you purchase the bond, the yield to maturity rises to 5.4%. What is the capital gain or..
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The corporate bond of Blue Sky Industrial currently sells at $1,094.00. The bond has an annual coupon rate of 6% and a face value of $1,000. What is the current yield of the bond? A bond with 3 years remaining to maturity has an annual coupon rate of..
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Billingsley, Inc. is borrowing $60,000 for five years at an APR of 8 percent. The principal is to be repaid in equal annual payments over the life of the loan with interest paid annually. Payments will be made at the end of each year. What is the tot..
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You have decided to refinance your mortgage. You plan to borrow whatever is outstanding on your current mortgage. The current monthly payment is $2,356 and you have made every payment on time. The original term of the mortgage was 30 years, and the m..
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Doug decided to purchase the run-down one-bedroom home next door to clean up the neighbourhood and, hopefully, make a profit. As he starts into repairs, he discovers rotting floorboards throughout the first floor, running up his repair cost an additi..
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If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we now have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock p..
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A $1,000 par value bond is currently selling in the marketplace. It had an original maturity of 25 years and was sold 11 years ago. Its coupon rate is 8% and you are to determine its current price, given bonds of comparable risk have a yield to matur..
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A company had beginning inventories as follows: Direct Materials, $900; Work-in-Process, $1,100; Finished Goods, $1,900. It had ending inventories as follows: Direct Materials, $1,000; Work-in-Process, $1,200; Finished Goods, $2,000. Material Purchas..
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