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Transfer pricing is the pricing of assets, funds, services, etc., transferred among related organizations.
A regular customer of Anderson's always places an order on the last day of the month, but did not do so in January.
Sam and Sue are married and age 65. Sam has a full time job that pays $80,000 and Sue's full time job pays $85,000.
From the Wall Street Journal, a website such as Yahoo! Finance, or some other source, obtain a current estimate of the risk-free rate .
Katie donates blood to a hospital on a regular basis (3 times a week). For each donation, she receives $175.
What are the red flags present that suggest the possibility of fraud? Are there conditions present suggested by the fraud triangle that may facilitate fraud?
By how much would the value of the company increase if it accepted the better project (plane)?
The Perez Company has the opportunity to invest in one of two mutually exclusive machines that will produce a product it will need for the foreseeable future.
Assume that Filkins' cost of capital is 14 percent. Should the firm replace its old knitting machine, and, if so, which new machine should it use?
Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project?
If you were told that each project's cost of capital was 12 percent, which project should be selected?
Now suppose all three firms have the same standard deviation of basic earning power (EBIT/Total assets).
What would the weighted average cost of capital be at the optimal capital structure?
Define the Real rate of return, versus nominal rate of return.
Explain how net operating working capital is recovered at the end of a project's life, and why it is included in a capital budgeting analysis.
Carter Air Lines is now in the terminal year of a project. The equipment originally cost $20 million, of which 80 percent has been depreciated.
You have been asked by the president of your company to evaluate the proposed acquisition of a new spectrometer for the firm's R&D department.
If total costs consisted of a fixed cost of $10,000 per year and variable costs of $95 per unit, and if only the variable costs were expected to increase .
Assume that this project has average risk. Construct a decision tree and determine the project's expected NPV.
Now conduct a sensitivity analysis to determine the sensitivity of NPV to changes in the sales price, variable costs per unit, and number of units sold.
What factors should a company consider when it decides whether to invest in a project today or to wait until more information becomes available?
Using decision tree analysis, should Kim proceed with the project today or should it wait a year before deciding?
Using decision tree analysis, does it make sense to wait 2 years before deciding whether to drill?
Does using decision tree analysis indicate that it makes sense to purchase the paper company?