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Hoobastank Co. is comparing two different capital structures. Plan I would result in 1,000 shares of stock and $30,000 in debt. Plan II would result in 2,000 shares of stock and $15,000 in debt. The
The cost-plus pricing approach's major advantage is a. it considers customer demand. b. that sales volume has no effect on per unit costs. c. it is simple to compute. d. none of these.
Students will select a current health care economic issue such as managed care, health care spending, prescription drugs, impact of current legislation on health care, medical care for aging populat
What is the firm's weighted-average cost of capital at various combinations of debt and equity, given the above information?
If X is a normal good, then a fall in price must lead to a rise in consumption, but if X is an inferior good then a fall in price may lead to a rise in consumption. Answer TRUE or FALSE and justify
Problem: Is it realistic to separate costs into fixed and variable components? Can it be done realistically? Can computer analyses do an easier job?
Does the company's financial manager use variable costing or full costing when it evaluates its products?
Now, the economy has entered a recession, and the government has pledged to flight a prolonged war on terrorism. How is the forecast likely to change?
Question 1. Which crop does the farmer plant? I know it has something do with expected value being higher.
Do you see any correlation between the loss of unions and the lack of wage gains over the past two decades. While GDP has grown more than 3% over the past few years, real wage gains have been stagna
What is the difference in the projected ROEs between the restricted and relaxed policies?
Can someone please describe the following project evaluation processes for me: Payback, NPV, PI, IRR. Is any one evaluation process better the others? Why?
Why can the distinction between fixed costs and variable costs be made in the short run? Distinction between fixed costs and variable costs can be made in the short run because a change in degree ca
You drive 5000 miles a year and buy gasoline at the price of $2/gal. Except for differences in annual costs, you are indifferent between driving a 10 year old Buick ($400/yr, 20 miles per gal) or a
If a firm uses external financing as a plug item, has a new capital budget of $3 million, a net income of $4 million, and a plowback ratio of 35%, how much should be raised in external funds?
Thompson corp has proposed project with normal cash flows. In other words, there is an up-front cost followed over time by a series of positive cash flows.
Simpson corporation is considering the purchase of an asset whose risk is greater than the current risk of the firm, based on any method for assessing risk. In evaluating this asset, the decision ma
Now, "overlay" several indifference curves onto the picture. Describe the shape of these curves -- why are they that shape. How can you find the utility-maximization point. Describe why other points
Question 1. Using the payback method, screen out any investment project that fails to meet the company's payback period requirement. Question 2. Using the net present value method, determine which
Impose a progressive tax such that the tax rate is 0 percent when GDP is $100, 5 percent at $200, 10 percent at $300, 15 percent at $400 and so forth. Determine and graph the new consumption schedul
In this election year, issues of campaign finance and political strategy are prominent. Suppose that you are in charge of a campaign to win a party's nomination. You can spend money on a variety of
When evaluating potential projects, which of the following factors should be incorporated as part of a project's estimated cash flows?
1. What would be the incremental cost of carrying receivables if this change were made? 2. What are the incremental pre-tax profits from this proposal?
Oliver Stone and Rock Company uses a process of capital rationing in its decision making. The firm's cost of capital is 12 percent. It will invest only $80,000 this year. It has determined the inter
Calculate the project's expected NPV, standard deviation, and coefficient of variation.