Fly Away, Inc., has balance sheet equity of $5.5 million. At the same time, the income statement shows net income of $803,000. The company paid dividends of $445,665 and has 100,000 shares of stock outstanding. If the benchmark PE ratio is 19, what i..
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Assume a clinical laboratory is considering a new test. Here are the key assumptions: annual fixed direct costs = $20,000, annual overhead allocation = $10,000, variable cost per test = $5, and expected volume = 5,000 tests. What price should be set ..
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You likely have read about the Sarbanes-Oxley Act. Why do you suppose Congress passed this law? In your opinion, is the law providing any benefit for the average investor? Do you think if we have enough such laws, it will eventually be impossible ..
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The X company is considering the acquisition of a new processor that has an estimated installed cost of $57,000. The processor has an expected life of 5 years and will be depreciated over a 5 year ACRS life to a zero salvage value. Evaluate the purch..
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Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $37, $312, and $94, respectively. If Baker undergoes a 2-for-1 stock split, what is the new divisor for the price-weighted index? (Round your answer to 6 decimal plac..
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A northern hardwood stand regenerates naturally, with no regeneration cost. Every 65 years, it can be harvested to yield 12/mbf/ac of hardwood sawtimber at $300/mbf and 12 cd/ac of pulpwood at $5 per cord. The annual management expenses are $2.50/ac...
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Assume that Wiley Health System, a for-profit hospital, has $1,000,000 in taxable income for 2015, and its tax rate is 30 percent. What is the firm's net income?
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You must evaluate a proposed spectrometer for the R&D department. The base price is $260,000, and it would cost another $39,000 to modify the equipment for special use by the firm. The equipment falls into the MACRS 3-year class and would be sold aft..
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What is the price of a U.S. Treasury bill with 100 days to maturity quoted at a discount yield of 1.40 percent? Assume a $1 million face value.
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We receive a mortgage loan for 20 years.. The mortgage rate is 6% per annum. Additionally, the monthly payment we ought to make to the bank to amortize the loan is $2, 500. Secondly, compute the remaining amount we still owe the bank, if we pay an ad..
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Steady As She Goes, Inc., will pay a year-end dividend of $3.70 per share. Investors expect the dividend to grow at a rate of 5% indefinitely. If the stock currently sells for $37 per share, what is the expected rate of return on the stock?
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If you determine that the appropriate risk premium is 6.74% and you observe that the risk-free rate, RF, is currently 5.25%, - what is the firm's current required return, rAzure?
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