Julia Price Wants to Drive a BMW It has been almost 15 years since Julia graduated with a major in aeronautical engineering, and now she makes “buckets of money” working as a project manager for a large defence contracting company. While she is not v..
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In the most recent fiscal year, its sales were $18 million with $2,500,000 in after tax profits. Historically, the firm shipped out its goods with a 30 day pay period allowed, with no cash discount offered. In looking over the numbers, Beth (CEO) fel..
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You purchased 300 shares of General Electric stock at a price of $75.45 four years ago. You sold all stocks today for $66.45. During that period the stock paid dividends of $2.70 per share. What is your annualized holding period return (annual percen..
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A friend of yours just bought a new sports car with a $4,000 down payment, and her $25,000 car loan is financed at an interest rate of 0.25% per month for 48 months. After 2 years, the "Blue Book" value of her vehicle in the used-car marketplace is $..
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You purchase a stock today for $32.38. You think a similar risk investment should earn 11.6%. You plan to hold the stock for 3 years. If you sell the stock for $40.00, would you reach your required investment goal?
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On January 1, 2009 Herbert acquired all of the outstanding stock of Rambis for $500,000. Annual excess amortization of $20,000 resulted from this acquisition. what is the adjustment to Herbert’s Investment account and beginning Retained Earnings. wha..
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You own a bond with a par value of $1000 that pays a $100 annual coupon. The bond matures in 15 years. Your required rate of return is 12% p.a. Calculate the value of the bond
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Briefly explain the structure of current insurance regulation. Specifically, explain whether the federal government regulates insurance or whether each state has regulatory responsibilities. Describe the impact of the key law that determined how the ..
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In December 1995 Boise Cascade’s stock had a beta of 0.95. The Treasury bill rate at the time was 5.8% and the Treasury bond rate was 6.4%. Assume the term structure of interest gives a 200 bp (basis point – a basis point is 1/100 of a %) spread betw..
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Find the WACC for a firm with the following characteristics. A few years ago the firm issued $4,000,000 debt with a coupon rate of 4%; currently that debt is trading with a yield to maturity of 5.5% and a value of $3,500,000. The firm plans on keepin..
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Muncy, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $819,822, $863,275, $937,250, $1,020,110, $1,212,960, and $1,225,000 over the next six years. If the appropriate disco..
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While Mary Corens was a student at the University of Tennessee, she borrowed $12,000 in student loans at an annual interest rate of 8.80%. If Mary repays $1,500 per year, how long (rounded up to the nearest year) will it take her to repay the loan?
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