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Your firm is considering leasing a new computer. The lease lasts for 9 years. The lease calls for 10 payments of $1,000 per year with the first payment occurring immediately. The computer would cost $7,650 to buy and would be straight-line depreciated to a zero salvage value over 9 years. The actual salvage value is negligible because of technological obsolescence. The firm can borrow at a rate of 8%. The corporate tax rate is 30%. What is the NPV of the lease relative to the purchase?
How much additional 14% debt can Mac issue now to maintain its time interest earned ratio at 3.2? Assume for this calculation that earnings before interest and taxes remains at its present level.
Give a logical brief explanation, based on reinvestment rates and opportunity costs, as to why the NPV method is better that the IRR method when the firm's cost of capital is constant at some value such as 10%.
The Bingo company is in the process of estimating which of the following two projects that they may invest in. The details are provided below:
What tools or techniques would you use in examine business strategies, financial reporting & disclosure policies, financial performance, forecasts & fundamental values?
Consider the following financial statement information for the Schwertzec Corporation:
The fire department has a number of failures with oxygen masks & is Assessing its possibility of outsourcing the preventive maintenance to the manufacturer.
What is meant by this term and how should the CFO be involved in this area? Also, how does "risk management" relate to treasury responsibilities?
Suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ±10 percent.
Computation of Degree of operating leverage and financial leverage & combined leverage and EPS if sales level declined.
On July 1, 2009, Houghton Company borrowed 200,000 euros from a foreign lender evidenced by an interest-bearing note due on July 1, 2010. The note is denominated in euros.
A company is estimating two mutually exclusive projects that have unequal lives. Evaluate the projects using the equivalent annual annuity approach (EAA), recommend which project they should select.
Storico Cleaning, Corporation, had additions to retained earnings for the year just ended of $510,000. The company paid out $130,000 in cash dividends, and it has ending total equity of $6.8 million.
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