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Five years ago you took out a 30-year mortgage with an APR of 6.5% for $200,000. If you were to refinance the mortgage today for 20 years at an APR of 4.25% , how much would you save in total intere
According to the expectations theory of the term structure, what are the expected future one year rates starting at the end of years 2, 3, 4 and 5?
AirJet Best Parts Inc. is now considering that the appropriate discount rate for the new machine should be the cost of capital and would like to determine it. You will assist in the process of obtai
Suppose A has $5M in marketable securities, $200M in liabilities, and 20M shares of stock. What is A's share price?
What will their Shares Outstanding be if they issue $1,500,000 in debt? a. 40,615 b. 55,615 c. 62,374 d. 73,023
Mos Company is attempting to establish a current assets policy. Fixed assets are $1M and the firm intends to maintain a 50% debt to assets ratio. Mos has no current liabilities. The interest rate is
Based on the following information calculate the holding period return.
Based on the following information, calculate the coefficient of variation and select the best investment based on the risk/reward relationship.
Assume that you have been hired as a consultant by CGT, a major producer of chemicals and plastics, including plastic grocery bags, styrofoam cups, and fertilizers, to estimate the firm's weighted a
Explain in detail how the four kinds of float (billing, collections, transit and disbursement) can be used to maximize the efficiency of incoming revenues and outgoing expenditures? What kinds of po
Compute the annual approximate interest cost of not taking a discount using the following scenarios. What conclusion can be drawn from the calculations?
If the NPV is zero for a potential project, does that always mean that the project should be rejected?
Tally Ho Inn has annual sales of $737,000. Earnings before interest and taxes is equal to 21 percent of sales. For the period, the firm paid $7,900 in interest. What is the profit margin if the tax
Had it cut costs and increased its net income in this amount, by how much would the ROE have changed?
1. Why is health care more costly in the United States than in other rich countries? 2. How do high health care costs hurt the United States? 3. How is your health insurance likely to change in the
By how much will the net income change as a result of the change in depreciation? The company uses the same depreciation calculations for tax and stockholder reporting.
Identify the alternatives for investing cash on a short-term basis, and discuss the general characteristics of each.
It needs to spend $10 million on new fixed assets and $16 million to increase its current assets, and it expected its accounts payable to increase by $2 million and its accruals to increase by $4 mi
Elegant designers have generated sales of $625,000 for the current year. If they can grow their sales at a rate of 12% every year, how long will they take to triple their sales?
BAGS, Inc. manufactures and sells golf balls. For 2010 it sold 1.0 million golf balls and ended the fiscal year with the following income statement.
The capital asset pricing model (CAPM) contends that there is systematic and unsystematic risk for an individual security. Which is the relevant risk variable and why is it relevant? Why is the othe
Why do the line from the Risk Free Rate that is tangent to the efficient frontier defines the dominant set of portfolio possibilities?
How a zero coupon bond provide profit? How a zero coupon bond provide profit?
What are the components of debt, preferred stock and common stock? and What is the WACC?