Question 1 If someone bought a bond for $1000.00 at 10% interest for 10 years, neeeded to sell it one year later, the market value is now at 8%. How much would his bond be worth to sell? Please show me how you got the answer.

What are the rights of capital providers (crdit and shareholders) with liqu…

1.) What behavioral bias explains, at least in part, the housing bubble crash of 2008?

2.)What are two things you would want to look at before investing in corporate bonds?

3.)Is now a good time to invest in cyclical or non-cyclical stocks? Why?

4.)What is a covered call strategy? When and how might you use it?

5.)What are two risks distinct to international investing?

6.)List and explain 6 considerations to make when deciding on an asset allocation for a client

Answer what you can, please.

20+ finance word problems with answers, explanatioons are as follows:

E 2E 3D 4E 5E 6C 7A 8C 9B 10B 11D 12E 13B 14A 15C 16E 17A 18C

Please show me explanations of the problems attached. Have made a payment

Please identify yourselves by name and student number on what you submit. You may work in groups of up to 4 students, no exceptions.Question 1 (10 marks)A little research is required to answer this question: Build America Bonds (BABs) were a new form of municipal bond introduced during the Obama administration under the Recovery Act in 2009. Amongst others, the State of Maine has issued the following municipal bonds:Assume both bonds were issued at the same time and both mature on June 1, 2018.Both bonds have credit ratings of Aa2/AA by Moody’s & S&P respectively.

Section I: Overview of Corporate Finance 1. Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the
corporate managers? A. articles of incorporation B. corporate breakdown C. agency problem D. bylaws E. legal liability 2. Which of the following questions are
addressed by financial managers? I. How should a product be marketed? II. Should customers be given 30 or 45 days to pay for their credit purchases? III.
Should the firm borrow more money? IV. Should the firm acquire new equipment? A. I and IV only B. II and III only C. I, II, and III only D. II, III, and IV
only E. I, II, III, and IV 3. Which one of the following is a capital budgeting decision? A. determining how many shares of stock to issue B. deciding whether
or not to purchase a new machine for the production line C. deciding how to refinance a debt issue that is maturing D. determining how much inventory to keep
on hand E. determining how much money should be kept in the checking account 4. Decisions made by financial managers should primarily focus on increasing which
one of the following? A. size of the firm B. growth rate of the firm C. gross profit per unit produced D. market value per share of outstanding stock E. total
sales Section II: Financial Statements, Taxes and Cash Flow 6. The book value of a firm is: A. equivalent to the firm’s market value provided that the firm has
some fixed assets. B. based on historical cost. C. generally greater than the market value when fixed assets are included. D. more of a financial than an
accounting valuation. E. adjusted to the market value whenever the market value exceeds the stated book value. 7. Which of the following are expenses for
accounting purposes but are not operating cash flows for financial purposes? I. interest expense II. taxes III. costs of goods sold IV. depreciation A. IV only
B. II and IV only C. I and III only D. I and IV only E. I, II, and IV only 8. A firm has $520 in inventory, $1,860 in fixed assets, $190 in accounts
receivables, $210 in accounts payable, and $70 in cash. What is the amount of the current assets? A. $710 B. $780 C. $990 D. $2,430 E. $2,640 9. Crandall Oil
has total sales of $1,349,800 and costs of $903,500. Depreciation is $42,700 and the tax rate is 34 percent. The firm does not have any interest expense. What
is the operating cash flow? A. $129,152 B. $171,852 C. $179,924 D. $281,417 E. $309,076 \

I need the solutions to these problems.

1. How would an increase in debt affect the cost of capital

2. Identify optimal cost of capital for an organization.

three tabs at the bottom for three different questions

1. An oil drilling company must choose between two mutually exclusive extraction projects, and each costs $12 million. Under Plan A, all the oil would be extracted in 1 year, producing a cash flow at t=1 of $14.4 million. Under Plan B, cash flows would be $2.1 million per year for 20 years. The firm’s WACC is 12 %
a. Costruct NPV profiles for Plans A and B, identify each project’s IRR, and show the approximate crossover rate.
b. Is it logical to assume that the firm would take on all available independent, average-risk projects with returns greater than 12%? Is all available projects with returns greater than 12% have been undertaken does this mean that cash flows from past investments have an opportunity cost of only 12 % because all the company can do with these cash flows is to replace money that has cost of 12%? Does this imply that the WACC is the correct reinvestment rate assumption for a project’s cash flows?

2. A company is considering two mutually exclusive expansion plans. Plan A requires a $40 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.4 million per year for 20 years. Plan B requires a $12 million expenditure to build a somewhat less efficient, more labor-intensive plant with expcted cash flows of $2.72 million per year for 20 years. The firm’s WACC is 10 %.
a. Calculate each project’s NPV and IRR
b. Graph the NPV profiles on Plan A and Plan B and approximate the crossover rate.
c. Why is NPV better than IRR for making capital budgeting decisions that add to shareholder value?

3. A store has 5 years remaining on its lease in a mall. Rent is $2000 per month, 60 payments remain, and the next payment is due in 1 month. The mall’s owner plans to sell the property in a year and wants rent at that time to be high so that the property will appear more value. Therefore, the store has been offered a “great deal”(owner’s words) on a new 5 year lease. The new lease calls for no rent for 9 months, then payments of $2600 per month for the next 51 months. The lease cannot be broken, and the store’s WACC is 12%( or 1% per month)
a. Should the new lease be accepted? (Hint: Make sure you use 1% per month)
b. If the store owner decided to bargain with the mall’s owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and old leases? (Hint: Find FV of the old lease’s original cost at t=9; then treat this as the PV of 51-period annuity whose payments represent the rent during months 10 to 60.)
c. The store owner is not sure of the 12% WACC-it could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?(Hint: Calculate the differences between the two payment streams; then find its IRR)

4. A mining company is deciding whether to open a strip mine, which costs 2 million. Net cash inflows of 12 million would occur at the end of Year 1. The land must be returned to its natural state at a cost of $12 million, payable at the end of Year 2.
a. Plot the project’s NPV profile.
b. Should the project be accepted if WACC =10%? If WACC=20%? Explain your reasoning
c. Think of some other capital budgeting situation in which negative cash flows during or at the end of the project’s life might lead to multiple IRRs.
d. What is the project’s MIRR at WACC =10%? At WACC=20%? Does MIRR lead to the same accept/reject decision for this project as the NPV method? Does the MIRR method always lead to the same accept/reject decision as NPV? (Hint: Consider mutually exclusive projects that differ in size.)

highlighted items in the attached filesare the assignment

1. An increase in current liabilites will have which one of the following effects, all else held constant? Assume all ratios have postitive values.

a. increase in the cash ratio

b. increase in the net working capital to total asset ratio

c. decrease in the quick ratio

d. decrease in the cash coverage ratio

e. increase in the current ratio

2. A firm has an interval measure of 48. This means that the firm has sufficient liquid assets to do which one of the following?

a. pay all of its debts that are due within the next 48 hours

b. pay all of its debts that are due within the next 48 days

c. cover its operating costs for the next 48 hours

d. cover its operating costs for the next 48 days

e. meet the demands if its customers for the next 48 hours

3. Which one of the following ratios identifies the amount of assets a firm needs in order to generate $1 in sales?

a. current ratio

b. equity multiplier

c. retention ratio

d. capital intensity ratio

e. payout ratio

4. The cost of preffered stock:

a. is equal to the divident yeild

b. is equal to the yeild to maturirty

c. is highly dependent on the dividend growth rate

d. is independent of the stock’s price

e. decreases when tax rates increase

I am studying for an upcoming Finance test and I am stuck on a few problems. I have the answers, but I’m not able to see how the book was able to get the answers that they got. If someone could please help me out with these problems I would really appreciate it. If you could do the problems in MS Excel that would be very helpful so that I can see the formulas that were used to achieve the answers.

Alex
808-383-0819

1.
A firm has the opportunity to invest in a new
device that will replace two of the firm’s older machines. The new device cost
$570,000 and requires an additional outlay of $30,000 to cover installation and
shipping.The new device will cause the
firm to increase its net working capital (NWC) by $20,000.Both of the old machines can be sold, the
first for $100,000 (book value is $95,000) and the second machine for $150,000
(book value is $75,000).The original
cost of the first machine was $200,000 and the original cost of the second was
$140,000.The firm’s tax rate is
40%.Compute the net investment for this
project.(Show all of your calculations)(10 points)

2.
Five
years ago, the Mori Foods Company acquired a bean processing machine.The machine cost $30,000 and is being
depreciated using the straight-line method, (equal amounts per year over the
life of the machine), the machine has a ten-year useful life.

The new processor is now available.
The firm’s tax rate is 40%.What
are the tax implications after the selling the old processor at the following
prices. (Show all calculations)(5 points)

a.
$15,000

b.
$5,000

c.
$26,000

d.
$32,000

3.
Central Laundry and Cleaners is considering
replacing an existing piece of machinery with a more sophisticated
machine.The old machine was purchased 3
years ago at a cost of $50,000, and it being depreciated under MACRS using the
5-year recovery period.The machine has
5 years usable life remaining.The new
machine will cost $76,000 and requires $4,000 installation. Cost.The new machine will also be depreciated
under MACRS using a 5-year recovery period. They can sell the old machine for
$55,000.The firm has a 40% tax rate and
revenues and expenses for each machine are as follows:

New Machine

Year 1Revenue$750,000

Year 2Revenue$750,000

Year 3Revenue
$750,000

Year 4Revenue$750,000

Year 5Revenue$750,000

Expense will be $720,000 each year.

The Old Machine will have revenues of:

Year 1$674,000

Year 2$676,000

Year 3$680,000

Year 4$678,000

Year 5$674,000

Each year expenses are $660,000.

A)
Calculate
the initial investment associated with placement of the old machine.

B)
Determine
the incremental operating cash inflows associated with the proposed
replacement.(Be sure to consider the
depreciation in year 6)

C)
Depict
on a time the relevant cash flows found in parts a and b.(15 points)

4.
You must analyze two projects, X and Y.Each project cost $10,000 and the firm’s
cost of capital is 12%.The expected
cash flows are:

ProjectXYear 1- $6,500; Year 2-$3,000; Year 3-
$3,000; Year 4- $1,000

ProjectYYear 1- $3,500; Year 2- $3,500; Year 3-
$3,500; Year 4- $3,500

a.
Calculate
each project’s NPV, IRR and payback period
(6 points)

b.
Which
project should be accepted if they are independent?(2 points)

c.
Which
project should be accepted if they are mutually exclusive?(2 points)

d.
Plot
the NPV profile of these two projects if the cost of capital was 0%, 5%, 10% and
15% (5 points)

e.What is the approximate crossover
rate (%) of these two projects.Explain
the crossover point! (5 points)

Show your calculations for NPV and IRR and depict the
crossover point in your graph.

Suppose the real risk-free rate is 3.50%. Inflation is expected to be 2% next year, 3% the following year and then 3.5% thereafter. There is a maturity premium
of 0.08% per year to maturity i.e., MRP = 0.08%(t), where t is the years to maturity. Liquidity premiums of 0.5% and default risk premiums of 0.85% are
standard. What would be the nominal return on a 10 year Treasury bond and a corporate bond with the same maturity?

Question 1

1. Suppose investments of differing maturities are currently offering the following rates of return. According to the pure expections theory of the term structure of interest rates, what must the market expect a 2-year security to yield2 years from now?

   1-year securities yield 8.47%

   2-year securities yield 5.1%

   3-year securities yield9.8%

   4-year securities yield 7.7%

   Answer

1 points

Question 2

1. If the market’s current required rate of return (i.e., yield) is 8.51%,what is the current price of a 26-year $1,000 par-value bond that pays a 7.13% coupon over 40 period(s) per year? (Round to the nearest cent.)Answer

1 points

Question 3

1. As an investor whose marginal tax rate is 64%, you are trying to decide between two securities: a 15-year $1,000 par value municipal bondpriced to yield 2.69% and a corporate bond with the same maturity, liquidity, and default risk. Calculate the corporate bond before-tax yield to maturity at which point you are indifferent between the two investment options.

   Answer

1 points

Question 4

1. If the market’s current required rate of return (i.e., yield) is 9% and there are 10 periods per year,what is the current price of a 5-year $1,000 par-value discount bond? (Round to the nearest cent.)

   Answer

1 points

Question 5

1. Suppose 1-year securities are currently yielding 4.47%. Further, suppose your crystal ball has forecasted the following 1-year rates: 1.42% 1 year from now, 6.27% 2 years from now, and 6.69% 3 years from now.According to the pure expectations theory of the term structure of interest rates, what annual return does the market expecta 3-year security to generate 1 year from now?

   Answer

1 points

Question 6

1. What is the Macaulay’s duration of a 20-year $1,000 par value bond that pays a 6.89% coupon over 23 period(s) per year and is priced to yield 5.59%?(Roundto 2 decimal places.)Answer

1 points

Save and Submit

1.As fixed costs increase, ___________ increases.

	degree of operating leverage
	degree of financial leverage

	leverage
	earnings per share

2.The break-even quantity of output is used to:

	all of the above
	determine the quantity of output that the firm must sell to cover all of its operating costs

	maximize a firm’s EBIT
	calculate the quantity of output that the firm must sell to cover its financing costs

3.Wahoo, Inc. is currently on schedule to sell 200,000 units of its most popular product. The firm’s average selling price per unit is $16.00.
Variable cost per unit is $11.00. Interest expense is running at $50,000 per year, while fixed costs total $800,000. What is the firm’s break-even point in
sales?

	$980,000
	$3,240,000

	$2,560,000
	$1,720,000

4.Under which of the following conditions would the usage of fixed costs in the operation of a business be most beneficial?

	When interest rates are rising
	When a business is expected to experience a period of declining sales

	During an economic recession
	When a business is expanding and sales revenues are rising

5.Blumberg Inc. has an unlevered beta of 1.10. The firm currently has no debt, but is considering changing its capital structure to be 40%
debt and 60% equity. Its corporate tax rate is 40%, rRF = 5% and the market risk premium is 4%. What is Blumberg’s cost of equity?

	10.56%
	11.16%

	10.96%
	10.76%

6.Young Enterprises has $2 million in assets, $400,000 of EBIT, and has a 40% tax rate. The firm also has a debt-to-assets ratio of 50% and
pays 12% interest on its debt. What is Young’s ROE?

	11.16%
	10.56%

	10.76%
	16.8%

I need these 7 questions answered ASAP please.