“Before there was Paris Hilton, there was Consuelo Vanderbilt Balsan – a Gilded Age heiress and socialite, renowned for her beauty and wealth. Now Ms. Balsan’s Hamptons home is currently worth $28 million. Calculate the annual compound growth rate of..
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Ogden Mear did an excellent job saving for retirement. He was able to save $1,000,000 in an account that pays 5 percent per year. His plan was to eventually withdraw all his money by paying himself in equal instalments every six months for the next 2..
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Information on Marshall Power Co., is shown below. Assume the company’s tax rate is 35 percent. Debt: 8,500 7.2 percent coupon bonds outstanding, $1,000 par value, 25 years to maturity, selling for 118 percent of par; the bonds make semiannual paymen..
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As the authorized purchasing manager for a large insurance firm, you must decide if it is good for the company to upgrade office computers. According to your budget the average cost of a desktop computer must be less than or equal to$2,100. Using a s..
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Taylor and Jordan are married and file a joint tax return claiming their two children, ages 12 and 9 as dependents. Their AGI for 2014 is $100,000. Taylor and Jordan's child tax credit for 2014 is:
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You are considering purchasing an apartment building for 1.2 million dollars. You expect the yearly cash inflows for the first three years to be $175,000 and year 4 and 5 will be $200000 and 250,000 respectively. At hte end of year 5 you sell the bui..
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A fire has destroyed a large percentage of the financial records of the Goodwin Industries. You have the task of piecing together information in order to release a financial report. You have found the return on equity to be 13.56 percent. If sales ..
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Yara owns a home that was recently appraised for $189,000. The balance on the existing mortgage is $84,450. If Yara’s bank is willing to loan up to 75% of the appraised value, find the potential amount of credit available on a home equity loan.
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Kahn Inc. has a target capital structure of 50% common equity and 50% debt to fund its $10 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 14%, a before-tax cost of debt of 11%, and a tax rate of 40%. What is the company's expected ..
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Kinky Copies may buy a high-volume copier. The machine costs $170,000 and will be depreciated straight-line over 5 years to a salvage value of $30,000. Kinky anticipates that the machine actually can be sold in 5 years for $37,000.
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The December 31, 2013, balance sheet of Schism, Inc., showed long-term debt of $1,430,000, $146,000 in the common stock account and $2,710,000 in the additional paid-in surplus account. The firm’s net capital spending for 2014 was $1,020,000, and the..
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Machinery costs $1 million today and $100,000 per year to operate. It lasts for 8 years. What is the equivalent annual annuity if the discount rate is 5%? Enter your answer in dollars and round to the cent.
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