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2. Use the PW method to evaluate four independent projects. Select as many as

Question: 2. Use the PW method to evaluate four independent projects. Select as many as three of the four projects. The MARR is 12% per year, and up to $16,000 in capital investment funds are available. (10) Project 3 1 2 4 Investment, $ -5000 5 – 8,000 5 -9,000 3 – 10,000 4 Life, years Year 1 2 3 4 5 AN- 1000 1700 2400 3000 3800 NCF Estimates, $ per year 500 5000 500

Show transcribed image text 100% (1 rating)Present worth (PW) of the given projects is calculated below using the spreadsheet NPV fx. Amt. in $ Year Proj…View the full answerTranscribed image text: 2. Use the PW method to evaluate four independent projects. Select as many as three of the four projects. The MARR is 12% per year, and up to $16,000 in capital investment funds are available. (10) Project 3 1 2 4 Investment, $ -5000 5 – 8,000 5 -9,000 3 – 10,000 4 Life, years Year 1 2 3 4 5 AN- 1000 1700 2400 3000 3800 NCF Estimates, $ per year 500 5000 500 5000 500 2000 500 10,500 0 0 0 17,000

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Busn 379 Week 6 Taxation Of S Corporations And Their Shareholders college essay help service

BUSN 379 Week 6 : Taxation of S Corporations and Their Shareholders – Homework

***100% All correct answers***

1. (TCOs 1 and 8) Kim owns 100% of the stock of Cardinal Corporation. In the current year Kim transfers an installment obligation, tax basis of $30,000, and fair market value of $200,000 for additional stock in Cardinal worth $200,000. As a result of the transfers, (Points : 5)

Kim recognizes no taxable gain on the transfer.

Kim has a taxable gain of $170,000.

Kim has a taxable gain of $180,000.

Kim has a basis of $200,000 in the additional stock she received in Cardinal Corporation.

None of the above

2. (TCOs 1 and 8) Carl transfers land to Cardinal Corporation for 90% of the stock in Cardinal Corporation worth $20,000 plus a note payable to Carl in the amount of $40,000 and the assumption by Cardinal Corporation of a mortgage on the land in the amount of $100,000. The land, which has a basis to Carl of $70,000, is worth $160,000.

Amount realized:

Stock $20,000

Note $40,000

Release of mortgage $100,000

$160,000

Less: Basis of land ($70,000)

Realized gain $90,000

Recognized gain ($30,000 + $40,000) $70,000

Cardinal Corporation will have a basis of $140,000 in the land [$70,000 (Carl’s basis in the land) + $70,000 (gain recognized by Carl with respect to the transfer of the land)]. (Points : 5)

Carl will have a gain on the transfer of $70,000.

Carl will have a gain on the transfer of $30,000.

Cardinal Corporation will have a basis in the land transferred by Carl of $70,000.

Cardinal Corporation will have a basis in the land transferred by Carl of $160,000.

None of the above

3. (TCOs 1, 8, and 9) Eagle Corporation owns stock in Hawk Corporation and has taxable income of $160,000 for the year before considering the dividends received deduction. Hawk Corporation pays Eagle a dividend of $200,000, which was considered in calculating the $160,000. What amount of dividends received deduction may Eagle claim if it owns 15% of Hawk’s stock? (Points : 5)

$0

$112,000

$140,000

$160,000

None of the above

4. (TCOs 1 and 8) During 2010, Sparrow Corporation, a calendar year C corporation, had operating income of $510,000, operating expenses of $370,000, a short-term capital loss of $25,000, and a long-term capital gain of $80,000. How much is Sparrow’s tax liability for 2010? (Points : 5)

$46,100

$59,300

$69,050

$76,050

None of the above

5. (TCOs 1 and 9) Beige Corporation (a calendar year taxpayer) has taxable income of $150,000, and its financial records reflect the following for the year.

Federal income taxes paid $75,000

Net operating loss carry forward deducted currently $35,000

Gain recognized this year on an installment sale from a prior year $22,000

Depreciation deducted on tax return (ADS depreciation would have been $5,000) $20,000

Interest income on Iowa state bonds $4,000

What is Beige Corporation’s current E & P? (Points : 5)

$68,000

$77,000

$103,000

$107,000

None of the above

6. (TCOs 1 and 9) Yellow Corporation has a deficit in accumulated E & P of $600,000 and has current E & P of $450,000. On July 1, Yellow distributes $500,000 to its sole shareholder, Eugene, who has a basis in his stock of $105,000. As a result of the distribution, Eugene has (Points : 5)

dividend income of $450,000 and no adjustment to stock basis.

dividend income of $105,000 and reduces his stock basis to zero.

dividend income of $450,000 and reduces his stock basis to $55,000.

no dividend income, reduces his stock basis to zero, and has a capital gain of $500,000.

None of the above

7. (TCOs 1 and 10) Identify a disadvantage of an S corporation. (Points : 5)

Generally, trusts cannot be shareholders.

Losses flow through to the shareholders.

The AMT on corporations is avoided.

Tax-exempt income flows through to the shareholders.

None of the above

8. (TCOs 1 and 10) Samantha owned 1,000 shares in Evita, Inc. an S corporation, that uses the calendar year. On October 11, 2010, Samantha sells all of her Evita stock. Her basis at the beginning of 2010 was $60,000. Her share of the corporate income for 2010 was $22,000, and she receives a distribution of $37,000 between January 1 and October 11, 2010. What is her basis at the time of the sale? (Points : 5)

$45,000

$60,000

$75,000

$82,000

9. (TCOs 1 and 10) Fred is the sole shareholder of an S corporation in Fort Deposit, Alabama. At a time when his stock basis is $10,000, the corporation distributes appreciated property worth $100,000 (basis of $10,000). There is no built-in gain. What is Fred’s taxable gain? (Points : 5)

$0

$10,000

$90,000

$100,000

None of the above

10. (TCOs 1 and 10) Apple, Inc. a cash basis S corporation in Orange, Texas, formerly was a C corporation. Apple has the following assets and liabilities on January 1, 2010, the date the S election is made:

Adjusted Basis Fair Market Value

Cash $200,000 $200,000

Accounts receivable -0- $105,000

Equipment $110,000 $100,000

Land $1,800,000 $2,500,000

Accounts payable -0- $110,000

During 2010, Apple collects the accounts receivable and pays the accounts payable. The land is sold for $3 million, and taxable income for the year is $590,000. What is Apple’s built-in gains tax?

(Points : 5)

$0

$206,500

$590,000

$695,000

None of the above

Busn 379 Week 2 Homework 1 Tco 3 You Have Been Approved For A college essay help service

2. Use the PW method to evaluate four independent projects. Select as many as

BUSN 379 Week 2 Homework

1. (TCO 3) You have been approved for a $70,000 loan toward the purchase of a new home at 15% interest. The mortgage is for 30 years. How much are the approximately annual payments of the loan? Hint: Assume you pay yearly. (Points : 3)

$7425

$8690

$9203

None of the above

2. (TCO 3) First Choice Bank pays 9% APR compounded quarterly on its business loans. National Emerald Bank pays 16% APR compounded daily. The EAR for First Choice and National Emerald Bank are: (Points : 3)

9.31% and 17.35%, respectively

9% and 17.50%, respectively

9.31% and 17.50%, respectively

9% and 17.35%, respectively

3. (TCO 3) LED Computer Electronics is considering an investment that will have cash flows of $5,000, $6,000, $7,000 and $10,000 for years 1 through 4. What is the approximate value of this investment today if the appropriate discount rate is 9% per year? (Points : 3)

$22,250

$30,520

$22,120

None of the above

4. (TCO 3) Which of the following will increase the total amount of interest earned on an investment assuming that all interest is reinvested? Select all answers that apply: (Points : 4)

increasing the frequency of the interest payments

decreasing the frequency of the interest payments

increasing the interest rate

decreasing the interest rate

5. (TCO 3) If you borrow $50,000 today at 10% interest for eight years. How much of your second payment will be applied towards the principal of the loan?(Points : 3)

$5,000

$4,372

$4,809

can not be determined with the information given

6. (TCO 3) Match the following terms with the examples as appropriate:

(Points : 4)

7. (TCO 3) You are interested in saving to buy a new machine that costs $1,105. You can deposit $250 in your bank today. If your bank pays 8% annual interest on its accounts, how long will it take you to save for the new machine? (Points : 4)

about 19 years

about 9 years

about 4.5 years

Can not be determined

8. (TCO 3) What are some real-life scenarios where you can apply the time value of money? (Points : 6)

Real-life scenarios include: Taking out a loan of any sort. That is, car loans, mortgages, bonds, student loans etc. Pension plans and annuities use the time value of money to compute future annuity payments. Various insurance plans are valued using the time value of money and the probability of the event occurring. The value of a project is computed by discounting its future cash flows. The value of a stock is computed as a discount of future dividends.

Busn 379 Week 7 Short Term Funding And Management Homework Es college essay help service

BUSN 379 Week 7 : Short-Term Funding and Management – Homework ES

***100% All correct answers****

Page 1

1. (TCO 2) Select any actions that increase the cash account. Select all that apply: (Points : 3)

payment is received on a receivable

An interest payment on a notes payable is made

A payment due is received from a client

An old machine is sold for cash

2. (TCO 2) Which one of the following will decrease the operating cycle? (Points : 3)

increasing the days’ sales in inventory

decreasing the accounts payable period

decreasing the cash cycle

increasing the accounts receivable turnover rate

decreasing the accounts payable turnover rate

3. (TCO 2) Assume Green Leaf Nursery anticipated sales of $500 in the first quarter. Accounts receivable at the beginning of the year was $300. Assuming a collection period of 30 days, which is the approximate beginning balance for the second quarter? (Points : 3)

$550

$630

$250

$170

None of the above

4. (TCO 2) Which of the following does not reduce collection float? (Points : 3)

deposit collections at least daily.

make sure all checks it receives are properly dated and signed.

utilize the benefits of the Check Clearing Act for the 21st Century.

consolidate all lockboxes into one lockbox located near the home office.

5. (TCO 2) Which of the following statements is true? Select all that apply: (Points : 3)

The optimal credit policy minimizes the total cost of granting credit.

There is an opportunity cost associated with not offering credit.

An increase in a firm’s average collection period generally indicates that at least some customers are taking longer to pay.

The costs of the credit application process and the costs expended in the collection process are not carrying costs of granting credit.

Character refers to the ability of a firm to meet its credit obligations out its operating cash flows.

The optimal credit policy is the policy that produces the largest amount of sales for a firm.

6. (TCO 2) You place an order for 100 units of inventory Part A at a unit price of $522. The supplier offers terms of 1/25, net 40. How much should you remit if you take the discount? (Points : 3)

$52,200

$39,150

$51,678

None of the above

7. (TCO 2) Auto Parts sells 1,600 electric parts per month and then reorders another 1,600 parts. If the relevant carrying cost per electric part is $4 and the fixed order cost is $650, what is the total carrying cost and the restocking cost, respectively? (Points : 3)

$6,400 and $33,800

$3,200 and $33,800

$6,400 and $7,800

$3,200 and $7,800

None of the above

8. (TCO 2) Company ABC has expected sales of 12,000 units this year, an ordering cost of $6 per order and carrying costs of $1.60 per unit. What is the EOQ? (Points : 3)

310 units

300 units

150 units

155 units

None of the above

9. (TCO 2) The _________ is the time it takes to acquire and sell inventory. (Points : 3)

cash cycle

operating cycle

inventory period

accounts receivable period

accounts payable period

10. (TCO 2) List three ways in which the firm can expedite payments and accounts receivables. (Points : 3)

Busn 379 Week 7 100 All Answers 1 Question Tco 2 Select Any Actions college essay help service

BUSN 379 Week 7 ***100% All correct answers***

1. Question : (TCO 2) Select any actions that increase the cash account. Select all that apply:

payment is received on a receivable

An interest payment on a notes payable is made

A payment due is received from a client

An old machine is sold for cash

Points Received: 3 of 3

Comments:

2. Question : (TCO 2) Which one of the following will decrease the operating cycle?

increasing the days’ sales in inventory

decreasing the accounts payable period

decreasing the cash cycle

increasing the accounts receivable turnover rate

decreasing the accounts payable turnover rate

Points Received: 3 of 3

Comments:

3. Question : (TCO 2) Assume Green Leaf Nursery anticipated sales of $500 in the first quarter. Accounts receivable at the beginning of the year was $300. Assuming a collection period of 30 days, which is the approximate beginning balance for the second quarter?

$550

$630

$250

$170

None of the above

Points Received: 3 of 3

Comments:

4. Question : (TCO 2) Which of the following does not reduce collection float?

deposit collections at least daily.

make sure all checks it receives are properly dated and signed.

utilize the benefits of the Check Clearing Act for the 21st Century.

consolidate all lockboxes into one lockbox located near the home office.

Points Received: 3 of 3

Comments:

5. Question : (TCO 2) Which of the following statements is true? Select all that apply:

The optimal credit policy minimizes the total cost of granting credit.

There is an opportunity cost associated with not offering credit.

An increase in a firm’s average collection period generally indicates that at least some customers are taking longer to pay.

The costs of the credit application process and the costs expended in the collection process are not carrying costs of granting credit.

Character refers to the ability of a firm to meet its credit obligations out its operating cash flows.

The optimal credit policy is the policy that produces the largest amount of sales for a firm.

Points Received: 3 of 3

Comments:

6. Question : (TCO 2) You place an order for 100 units of inventory Part A at a unit price of $522. The supplier offers terms of 1/25, net 40. How much should you remit if you take the discount?

$52,200

$39,150

$51,678

None of the above

Points Received: 3 of 3

Comments:

7. Question : (TCO 2) Auto Parts sells 1,600 electric parts per month and then reorders another 1,600 parts. If the relevant carrying cost per electric part is $4 and the fixed order cost is $650, what is the total carrying cost and the restocking cost, respectively?

$6,400 and $33,800

$3,200 and $33,800

$6,400 and $7,800

$3,200 and $7,800

None of the above

Points Received: 3 of 3

Comments:

8. Question : (TCO 2) Company ABC has expected sales of 12,000 units this year, an ordering cost of $6 per order and carrying costs of $1.60 per unit. What is the EOQ?

310 units

300 units

150 units

155 units

None of the above

Points Received: 3 of 3

Comments:

9. Question : (TCO 2) The _________ is the time it takes to acquire and sell inventory.

cash cycle

operating cycle

inventory period

accounts receivable period

accounts payable period

Points Received: 3 of 3

Comments:

10. Question : (TCO 2) List three ways in which the firm can expedite payments and accounts receivables.

Points Received: 3 of 3

Comments:

Busn 379 Week 1 Business Ethics Homework Es Page Tco Why Is Maximization college essay help service

BUSN 379 Week 1 : Business Ethics – Homework ES

Page 1

1. (TCO 1) Why is maximization of the current value per share a more appropriate financial management goal than profit maximization? (Points : 3)

Because by maximizing the current stock value you also maximize the company’s profit for the year.

Because this criterion is non-ambiguous.

Because financial managers always act in the best interest of shareholders.

B and C

2. (TCO 1) Market value is important to the financial manager because: (Points : 3)

It reflects the value of the asset based on generally-accepted accounting principles.

Is a crucial component of the balance sheet and can impact the financial statements.

Market values reflect the amount someone is willing to pay today for an asset.

The market value of an asset reflects its historical cost.

3. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:

Cost of goods sold…………………………. $1.2 million

Administrative expenses…………………… $250,000

Marketing and selling expenses…………… $175,000

Depreciation…………………………………. $500,000

Interest expense……………………………. $200,000

Dividends paid………………………………. $150,000

(TCO 1) Suppose that Sports Baseball has 30,000 shares of stock. What is the dividends per share figure?

(Points : 3)

5.0

8.75

5.25

8.50

4. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:

Cost of goods sold…………………………. $1.2 million

Administrative expenses…………………… $250,000

Marketing and selling expenses…………… $175,000

Depreciation…………………………………. $500,000

Interest expense……………………………. $200,000

Dividends paid………………………………. $150,000

(TCO 1) Assuming a tax rate of 30%, the percentage of dividends per net income is approximately ______ and operating cash flow is _________ than net income.

Hint: You need to calculate the net income and divide dividends by the net income.

(Points : 3)

30% and lower

60% and lower

30% and higher

60% and higher

5. For this question, use the information for Sports Baseballs, Inc. Sports Baseballs, Inc. is a corporation that manufacturers and sells baseballs across several states in the Southeast. It had sales of $2.7 million during the last year. Expenses were as follows:

Cost of goods sold…………………………. $1.2 million

Administrative expenses…………………… $250,000

Marketing and selling expenses…………… $175,000

Depreciation…………………………………. $500,000

Interest expense……………………………. $200,000

Dividends paid………………………………. $150,000

(TCO 1) Select all items that will be included in Sports Baseballs, Inc. Balance Sheet. For this exercise you will be choosing more than one option for your answer:

(Points : 3)

Cash on hand

Fixed assets

Net sales

Administrative expenses

Taxes

Long-term debt

Dividends paid

Marketing expenses

Consulting revenues

6. (TCO 1) Which one of the following activities best exemplify working capital management. For this exercise you will be choosing more than one option for your answer: (Points : 6)

Identify three good investment opportunities for the firm.

Obtain a short-term loan to purchase materials.

Assess the level of inventory to be kept on hand.

Sale long-term bonds to raise funds for a new machine.

Determine the return of a potential project.

Calculate the cash flows for a project.

Manage payments to suppliers.

7. (TCO 1) Match the following terms with the examples as appropriate:

(Points : 4)

Potential Matches:

1 : McDonald’s work to redesign packaging items with recyclable materials.

2 : Microsoft’s monopolistic behavior.

3 : Martha Stewart’s sale of ImClone stock as result of information provided by the company’s CEO before an announcement was made public that significantly decrease ImClone’s stock price.

4 : Parmalat’s deliberate fraudulent accounting practices.

5 : established an oversight board responsible for improving auditing standards within companies.

8. (TCO 1) Can you provide some examples of recent well-known unethical behavior cases? Explain the situation in one or two sentences. (Points : 5)

Busn 379 Week 4 Capital Budgeting Midterm Page 1 Tco Which One college essay help service

BUSN 379 – Week 4 : Capital Budgeting – Midterm

page 1

1. (TCO 1) Which one of the following actions best matches the primary goal of financial management? (Points : 3)

increasing the net working capital while lowering the long-term asset requirements

improving the operating efficiency, thereby increasing the market value of the stock

increasing the firm’s market share

reducing fixed costs and increasing variable costs

increasing the liquidity of the firm by transferring short-term debt into long-term debt

2. (TCO 1) When analyzing alternative capital structures for a firm, a financial manager must consider which of the following? (Points : 3)

type of loan

amount of funds needed

cost of funds

mix of debt and equity

all of the above

3. (TCO 1) Book values are different from market values because: (Points : 3)

Book values reflect the value of the asset based on generally-accepted accounting principles.

Book values are used in the company’s balance sheet.

Book values do not reflect the amount someone is willing to pay today for an asset.

All of the above

None of the above

4. (TCO 1) The income statement reflects: (Points : 3)

Income and expenses at the time when those items affect the cash flows of a firm.

Income and expenses in accordance with GAAP.

The cash flows in accordance with GAAP.

The flow of cash into and out of a firm during a stated period of time.

The flow of cash into and out of a firm as of a particular date.

5. (TCO 1) Tato’s Pizza has sales of $625,000. They paid $43,000 in interest during the year and depreciation was $79,000. Administrative costs were $100,000 and other costs were $160,000. Assuming a tax rate of 35 percent, what is Tato’s Pizza net income?

(Points : 3)

$157,950

$322,000

$243,000

$200,000

6. (TCO 1) Home Best Hardware had $315,000 in taxable income last year. Using the tax rates provided in Table 2.3, what are the company’s income taxes? (Points : 3)

$122,850

$106,100

$94,500

None of the above

7. (TCO 1) Pizza A had earnings after taxes of $600,000 in the year 2008, and 300,000 shares outstanding. In year 2009, earnings after taxes increased to $750,000, and 25,000 new shares were issued for a total of 325,000 shares. What is the EPS figure for 2008? (Points : 3)

$2.0

$2.21

$0.50

$0.47

8. (TCO 1) An income statement: (Points : 3)

reveals the net cash flows of a firm over a stated period of time.

reflects the financial position of a firm as of a particular date.

shows the revenue and expenses based upon selected accounting methods.

records revenue only when cash is received for the product or service provided.

records expenses based on the recognition principle.

9. (TCO 1) Green Leaf Nursery has EBIT of $250,000, interest of $30,000, taxes of $50,000, and depreciation of $80,000. What is the company’s operating cash flow? (Points : 3)

$297,200

$280,000

$340,000

$270,000

$250,000

10. (TCO 3) Mark deposited $1,000 today, in an account that pays eight percent interest, compounded semi-annually. Which one of the following statements is correct concerning this investment? (Points : 3)

Mark will earn more interest in year 4 than he will in year 3.

Mark will receive equal interest payments every six months over the life of the investment.

Mark would have earned more interest if he had invested in an account paying 8 percent simple interest.

Mark would have earned more interest if he had invested in an account paying annual interest.

Mark will earn less and less interest each year over the life of the investment.

11. (TCO 3) Mr. Smith will receive $8,500 a year for the next 14 years from a contract. If the interest rate on this investment is eight percent, what is the approximate current value of these future payments? (Points : 3)

$70,070

$53,500

$110,200

$96,700

12. (TCO 3) KED Engineering acquired an additional business unit for $310,000. The seller agreed to accept annual payments of $67,000 at an interest rate of 6.5 percent. How many years will it take KED Engineering to pay for this purchase? (Points : 3)

4.70 years

5.68 years

6.21 years

7.84 years

8.12 years

13. (TCO 3) Fine Oak Woodworks is considering a project that has cash flows of $6,000, $4,000, and $3,000 for the next three years. If the appropriate discount rate of this project is 10 percent, which of the following statements is false? (Points : 3)

The current value of the project’s inflows is $13,000

The approximate current value of the project’s inflows is $11,000

The project’s inflows are higher than zero

The project should be accepted because its present value is positive

14. (TCO 4) You are considering two investments. Investment I is in a software company, and Investment II is an engineering company. The investments offer the following cash flows:

Year Software Company Engineering Company

1 $5,000 $15,000

2 $3,000 $8,000

3 $4,000 $9,000

4 $3,600 $11,000

If the appropriate discount rate is 10 percent, what is the approximate present value of the Engineering Company investment? (Points : 3)

$33,200

$34,500

$42,000

$43,500

15. (TCO 3) North Bank offers you an APR of 9.76 percent compounded semiannually, and South Bank offers you an effective rate of 9 percent on a business loan. Which bank should you choose and why? (Points : 3)

South Bank because its effective rate is higher.

North Bank because the APR is lower.

South Bank because its effective rate is lower.

North Bank because its effective rate is lower.

Page: 2

1. (TCO 3) Which one of the following will increase the future value of a lump sum invested today? (Points : 3)

decreasing the amount of the lump sum

increasing the rate of interest

paying simple interest rather than compound interest

paying interest only at the end of the investment period

shortening the investment time period

2. (TCO 3) Which one of the following best exemplifies a perpetuity? (Points : 3)

a mortgage of $860 a month for 30 years

$2,000 annual payments from a trust fund indefinitely

social security payments of $2,500 a month for life

student loan payments of $600 a month for three years

$250 a month over the life of a lease

3. (TCO 3) Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond if the YTM is 11 percent? Assume annual payments. (Points : 3)

$1080

$1085

$925

$1000

4. (TCO 6 and 8) A bond’s debenture will include which of the following? (Points : 3)

description of any loan collateral

call provisions

total amount of the bond issue

protective covenants

all of the above

none of the above

5. (TCO 3) Bonds issued by Blue Sky Airlines have a face value of $1,000 and currently sell for $850. The annual coupon payments are $80. If the bonds have 10 years until maturity, what is the approximate YTM of the bonds? (Points : 3)

10.50%

11.50%

11.75%

12%

6. (TCO 3) The preferred stock of Bean Coffee pays an annual dividend of $5.60. It has a required rate of return of eight percent. What is the price of the preferred stock? (Points : 3)

$700

$70

$5.20

$6.05

None of the above

7. (TCO 3) Intelligence Research, Inc. will pay a common stock dividend of $1.60 at the end of the year. The required rate of return by common stockholders is 13 percent. The firm has a constant growth rate of nine percent. What is the current price of the stock? (Points : 3)

$35

$40

$27

$29

8. (TCO 3) Royal Electric paid a $4 dividend last year. The dividend is expected to grow at a constant rate of six percent over the next four years. Common stockholders require a 13 percent return. What are the values of the dividends for years 1, 2 and 3, respectively? (Points : 3)

$4, $4.5 and $4.8

$4.24, $4.76 and $5.05

$4.24, $4.49, $4.76

$4, $4.50, $5.05

9. (TCO 6) The market where new securities are offered is called the _____ market. (Points : 3)

primary

main

secondary

principal

dealer

10. (TCO 6) The smallest firms listed on NASDAQ are in the NASDAQ _____ Market. (Points : 3)

National

Capital

Regional

Global Select

Global

11. (TCO 6) The yield to maturity on a bond is: (Points : 3)

equal to the coupon rate divided by the current market price.

another name for the current yield.

equal to the annual interest divided by the face value.

the current required market rate.

another name for the coupon rate.

12. (TCO 6) A call provision in a bond agreement grants the issuer the right to: (Points : 3)

repurchase the bonds prior to maturity at a pre-specified price.

replace the bonds with equity securities.

repurchase the bonds, after maturity at a pre-specified price.

change the coupon rate, provided the bondholders are notified in advance.

buy back the bonds on the open market prior to maturity.

13. (TCO 8) Which of the following is true regarding bonds? (Points : 3)

Bonds do not carry default risk.

Bonds are sensitive to changes in the interest rates.

Moody’s and Standard and Poor’s provide information regarding a bond’s interest rate risk.

Municipal bonds are free of default risk.

None of the above is true

14. (TCO 6) Which of the following is not a floating-rate bond? (Points : 3)

A bond that adjusts the coupon payments based on an interest rate index, such as the T-bill.

An EE Savings Bond issued by the U.S. government.

A bond that does not have any coupons until maturity.

A bond that adjusts the coupon and face value payment based on inflation.

TIPS

15. (TCO 6) Which of the following is true regarding convertible bonds? Select all that apply: (Points : 3)

Are relatively common

Can be exchanged for a fixed number of shares at maturity only

Can be exchanged for a fixed number of shares before maturity

Allow the holder to require the issuer to buy the bond back

Page: 3

1. (TCO 1) In a general partnership, each partner is personally liable for: (Points : 3)

the partnership debts that he or she personally obtained for the firm.

his or her proportionate share of all partnership debts, regardless of which partner incurred that debt.

the total debts of the partnership, even if he or she was unaware of those debts.

the debts of the partnership, up to the amount he or she invested in the firm.

all personal and partnership debts incurred by any partner, even if he or she was unaware of those debts.

2. (TCO 1) Trademarks are classified as: (Points : 3)

short-term assets.

current liabilities.

long-term debt.

tangible fixed assets.

intangible fixed assets.

3. (TCO 1) Can you provide some examples of recent, well-known unethical behavior cases? Explain the situation in one or two sentences. (Points : 8)

4. (TCO 3) How can we apply the concept of time value of money in evaluating a mortgage? Present at least two scenarios. Briefly explain your rationale. (Points : 8)

5. (TCO 8) Are U.S. Treasury securities risk-free? Why or why not? Explain your rationale? (Points : 8)

6. (TCO 6) What are some of the features of zero-coupon bonds that make them attractive to certain investors? Which type of investors will be most interested in these bonds? (Points : 10)

Busn 379 Midterm Exam 1 Tco What Is The Goal Of Financial Management college essay help service

BUSN 379 Midterm Exam

1. (TCO 1) What is the goal of financial management for a sole proprietorship? (Points : 3)

decrease long-term debt to reduce the risk to the owner

maximize net income given the resources of the firm

maximize the market value of the equity

minimize the tax impact on the proprietor

minimize costs and increase production

2. (TCO 1) Working capital management includes which of the following? (Points : 3)

establishing the inventory level

deciding when to pay suppliers

determining the amount of cash needed on a daily basis

establishing credit terms for customers

all of the above

3. (TCO 1) Book values are different from market values because: (Points : 3)

Book values reflect the value of the asset based on generally-accepted accounting principles.

Book values are used in the company’s balance sheet.

Book values do not reflect the amount someone is willing to pay today for an asset.

All of the above

None of the above

4. (TCO 1) The income statement reflects: (Points : 3)

Income and expenses at the time when those items affect the cash flows of a firm.

Income and expenses in accordance with GAAP.

The cash flows in accordance with GAAP.

The flow of cash into and out of a firm during a stated period of time.

The flow of cash into and out of a firm as of a particular date.

5. (TCO 1) Tato’s Pizza has sales of $625,000. They paid $43,000 in interest during the year and depreciation was $79,000. Administrative costs were $100,000 and other costs were $160,000. Assuming a tax rate of 35 percent, what is Tato’s Pizza net income?

(Points : 3)

$157,950

$322,000

$243,000

$200,000

6. (TCO 1) Home Best Hardware had $315,000 in taxable income last year. Using the tax rates provided in Table 2.3, what are the company’s income taxes? (Points : 3)

$122,850

$106,100

$94,500

None of the above

7. (TCO 1) Pizza A had earnings after taxes of $390,000 in the year 2008, and 300,000 shares outstanding. In year 2009, earnings after taxes increased by 20 percent to $468,000 and 25,000 new shares were issued for a total of 325,000 shares. What is the EPS figure for 2009? (Points : 3)

$1.30

$1.44

$0.77

$0.69

8. (TCO 1) The financial statement that summarizes a firm’s operations over a period of time is called a(n): (Points : 3)

income statement.

cash flow statement.

production report.

balance sheet.

periodic operating statement.

9. (TCO 1) Print Imaging has EBIT of $150,000, interest of $30,000, taxes of $50,000, and depreciation of $50,000. What is the company’s operating cash flow? (Points : 3)

$120,000

$180,000

$170,000

$150,000

$120,000

10. (TCO 3) You opened a new certificate of feposit with $13,000. Your broker indicated that this investment pays five percent interest, compounded quarterly. Which one of the following statements is correct concerning this investment? (Points : 3)

You will receive equal interest payments every three months over the life of the investment.

You could earn more interest by investing in an account paying five percent simple interest.

You would have earned more interest if you had invested in an account paying annual interest.

You will earn less and less interest each year over the life of the investment.

You will earn more interest in year 3, than you will in year 2.

11. (TCO 3) Mr. Smith will receive $7,500 a year for the next 14 years from his trust. If the interest rate on this investment is eight percent, what is the approximate current value of these future payments? (Points : 3)

$61,800

$53,500

$113,400

$97,200

12. (TCO 3) Your neighbor just received a credit offer in an e-mail. The company is offering him $6,000 at 12.8 percent interest. The monthly payment is only $110. If he accepts this offer, how long will it take him to pay off the loan? (Points : 3)

81.00 months

81.50 months

83 months

82.17 months

90.70 months

13. (TCO 3) Fine Oak Woodworks is considering a project that has cash flows of $6,000, $4,000, and $3,000 for the next three years. If the appropriate discount rate of this project is 10 percent, which of the following statements is false? (Points : 3)

The current value of the project’s inflows is $13,000

The approximate current value of the project’s inflows is $11,000

The project’s inflows are higher than zero

The project should be accepted because its present value is positive

14. (TCO 4) You are considering an investment that will have the following cash flows: $54,000, $66,000, $(60,000), $57,000, and $120,000. The appropriate discount rate is 11 percent. What is the value of this investment? Note that the cash flow in brackets is negative. (Points : 3)

$160,000

$167,106

$162,500

Cannot be determined because one of the cash flows is negative

15. (TCO 3) North Bank offers you an APR of 13.17 percent compounded monthly, and South Bank offers you an effective rate of 13.75 percent on a business loan. Which bank should you choose and why? (Points : 3)

South Bank because its effective rate is higher.

North Bank because the APR is lower.

South Bank because its effective rate is lower.

North Bank because its effective rate is lower.

Busn 379 Final Exam Corporate Finance Multiple Choice Questions college essay help service

BUSN 379 Final Exam

Corporate Finance – Multiple Choice Questions – Part II

1. Which one of the following activities best exemplify working capital management?

Sale long-term bonds to raise funds for a new machine.

Determine the return of a potential project.

Calculate the cash flows for a project.

Manage payments to suppliers.

2. Book values are different from market values because:

Book values reflect the value of the asset based on generally-accepted accounting principles.

Book values are used in the company’s balance sheet.

Book values do not reflect the amount someone is willing to pay today for an asset.

All of the above

None of the above

3. Use the following tax table to answer this question:

Taxable income Tax rate

0 – 50,000 15%

50,001 – 75,000 25%

75,001 – 100,000 34%

100,001 – 335,000 39%

335,001 – 10,000,000 34%

McKenzie, Inc. earned $144,320 in taxable income for the year. What is the company’s approximate average tax rate?

27%

29%

31%

33%

35%

4. Regional Bank offers you an APR of 19 percent compounded semiannually, and Local Bank offers you an EAR of 20.10 percent for a new automobile loan. You should choose ______________ because its _______ is lower.

Regional Bank, APR

Local Bank, EAR

Regional Bank, EAR

Local Bank, APR

5. You deposited $11,000 in your bank account today. Which of the following will decrease the future value of your deposit, assuming that all interest is reinvested? Assume the interest rate is a positive value. Select all that apply:

a decrease in the interest rate

increasing the initial amount of your deposit

increasing the frequency of the interest payments

decreasing the length of the investment period

6. You want to have $15,000 for a down payment on a house five years from now. If you can earn 13 percent, compounded annually, on your savings, how much do you need to deposit today to reach your goal?

$7,858.11

$8,141.40

$9,803.58

$12,464.28

$14,213.25

7. The new home that you want to buy costs $249,500. You plan to make a cash down payment of 20 percent and finance the balance over 10 years at 6.75 percent. What will be the amount of your monthly mortgage payment?

$2,291.89

$2,809.10

$3,287.46

$3,412.67

$4,145.68

8. Which type of loan is comparable to the present value of a future lump sum?

effective annual rate

amortized

interest-only

annual percentage

pure discount

9. Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond, if the YTM is 11 percent? Assume annual payments.

$1080

$1085

$925

$1000

10. The market where new securities are offered is called the _____ market.

primary

main

secondary

principal

dealer

11. Which one of the following statements concerning financial leverage is correct?

Financial leverage increases profits and decreases losses.

Financial leverage has no effect on a firm’s return on equity.

Financial leverage, refers to the use of common stock.

Financial leverage magnifies both profits and losses.

Increasing financial leverage will always increase the earnings per share.

12. SmithKline Company’s bonds are currently selling for $1,157.75 per $1000 par-value bond. The bonds have a 10 percent coupon rate and will mature in 10 years. What is the approximate yield to maturity?

6.96%

7.69%

11.0%

12.1%

13. Which of the following is true regarding bonds?

Most bonds do not carry default risk.

Municipal bonds are free of default risk.

Bonds are not sensitive to changes in the interest rates.

Moody’s and Standard and Poor’s provide information regarding a bond’s interest rate risk.

None of the above is true

14. Which one of the following bonds is the most sensitive to interest rate movements?

zero-coupon, five year

seven percent annual coupon, five year

zero-coupon, 10 year

five percent semi-annual coupon, 10 year

five percent annual coupon, 10 year

15. A sinking fund is an account managed by a bond trustee for the sole purpose of:

paying interest payments on a semi-annual basis.

redeeming bonds early.

repaying the face value at maturity.

paying the expenses required to reissue outstanding bonds.

paying the “balloon payment” at maturity.

1. Which of the following is true regarding put bonds?

Have coupons that depend on the company’s income

Can be exchanged for a fixed number of shares before maturity only

Can be exchanged for a fixed number of shares before maturity

Allow the holder to require the issuer to buy the bond back

2. The term debenture refers to

long-term, secured debt.

long-term, unsecured debt.

the after-acquired property clause.

a document covering the specific terms of the debt issue.

3. Company A has a bond outstanding with $90 annual interest payment, a market price of $820 and a maturity date in five years. Assume the par value to be $1,000. What is the bond’s coupon rate and current yield, respectively?

11% and 9%

9% and 11%

9% and 14%

Cannot be determined

None of the above

4. Which of the following does not reduce collection float?

installing a lockbox system.

deposit collections weekly, instead of daily.

requiring all customers pay by cash, rather than with check.

utilize the benefits of the Check Clearing Act for the 21stCentury.

5. Storage and tracking costs, insurance and taxes, and losses due to theft are examples of:

Inventory depletion costs

Sunk costs

Carrying costs

Shortage costs

I Need Please Busn 379 Task 5 college essay help service

Course Project is what I need, from week 2 to week 6. needs a microsoft work like excel and word. 2 files below are samples of the attachment and the other file is the structure of the project will be. thanks.

Busn 379 Course Project Part I Introduction The Is An Opportunity college essay help service

BUSN 379 Course Project – Part I

Introduction

The Course Project is an opportunity for you to apply concepts learned to a real-life simulation experience. Throughout the Course Project, you will assume that you work as a financial analyst for AirJet Best Parts, Inc. The Course Project is provided in two parts as follows:

Part I – In Part I, you work with AirJet Best Parts, Inc. staff to identify the best loan options, as well as to valuate stocks and bonds.

About AirJet Best Parts, Inc.

AirJet Best Parts, Inc. is a company dedicated to the design and manufacturing of aviation and airplane technologies and parts. The company has commercial and military clients worldwide.

Task 1: Assessing loan options for AirJet Best Parts, Inc.

The company needs to finance $8,000,000 for a new factory in Mexico. The funds will be obtained through a commercial loan and by issuing corporate bonds. Here is some of the information regarding the APRs offered by two well-known commercial banks.

Bank APR Number of Times Compounded

National First Prime Rate + 6.75% Semiannually

Regions Best 13.17 Monthly

1. Assuming that AirJet Parts, Inc. is considering loans from National First and Regions Best, what are the EARs for these two banks? Hint for National Bank: Go to the St. Louis Federal Reserve Board’s website (http://research.stlouisfed.org/fred2/). Select “Interest Rates” and then “Prime Bank Loan Rate”. Use the latest MPRIME. Show your calculations. (15 pts)

2. Based on your calculations above, which of the two banks would you recommend and why? Explain your rationale. (15 pts)

3. AirJet Best Parts, Inc. has decided to take a $6,950,000 loan being offered by Regions Best at 8.6% APR for 5 years. What is the monthly payment amount on this loan? Do you agree with this decision? Explain your rationale. (20 pts)

Task 2: Evaluating Competitor’s Stock

AirJet Best Parts, Inc. is concerned regarding recent changes in its stock prices for the company and would like to determine the stock prices for key competitors. Key competitors include Raytheon, Boeing, Lockheed Martin, and the Northrop Grumman Corporation.

1. Using the dividend growth model and assuming a dividend growth rate of 5%, what is the rate of return for one of three key competitors? Use Yahoo Finance to obtain the latest dividend amount and price for one selected company. (15 pts)

2. Using the rate of return above, what should be the current share price of AirJet Best Parts, Inc. if the company maintains a constant 1% growth rate in dividends and the most recent dividend per share paid on the stock was $1.50? Show your calculations. (10 pts)

3. Assume AirJet Best Parts has also a preferred stock issue. The most recent dividend per share paid on the stock was also $1.50, the same as the common stock. Which one would you think has a higher price, the preferred stock or the current stock? Explain your rationale. (5 pts)

4. What would happen with the price you computed above if AirJet Best Parts, Inc. announces that dividends at the end of the year will increase? What if the required rate of return increases? What changes in dividends will affect the stock price and how? (10 pts)

Task 3: Bond Evaluation

AirJet Best Parts, Inc. would like to issue 20-year bonds to obtain remaining funds for the new Mexico plant. The company currently has 7.5% semiannual coupon bonds in the market that sell for $1,062 and mature in 20 years.

1. What coupon rate should AirJet Best Parts set on its new bonds to sell them at par value? (10 pts)

2. What is the difference between the coupon rate and the YTM of bonds? (10 pts)

3. What factors will contribute to the riskiness of these bonds? Explain in detail your rationale. (20 pts)

4. What type of positive and negative covenants may AirJet Best Parts, Inc. use in future bond issues? (10 pts)

Busn 379 Course Project Part Ii Introduction You Will Assume college essay help service

BUSN 379 Course Project Part II

Introduction

You will assume that you still work as a financial analyst for AirJet Best Parts, Inc. The company is considering a capital investment in a new machine and you are in charge of making a recommendation on the purchase based on (1) a given rate of return of 15% (Task 4) and (2) the firm’s cost of capital (Task 5).

Task 4. Capital Budgeting for a New Machine

A few months have now passed and AirJet Best Parts, Inc. is considering the purchase on a new machine that will increase the production of a special component significantly. The anticipated cash flows for the project are as follows:

Year 1 $1,100,000

Year 2 $1,450,000

Year 3 $1,300,000

Year 4 $950,000

You have now been tasked with providing a recommendation for the project based on the results of a Net Present Value Analysis. Assuming that the required rate of return is 15% and the initial cost of the machine is $3,000,000.

Required Rate of Return: 15%

Initial Cost of Machine: $3,000,000

Cash Flow PV PV=CF/(1+r)^n

Year 0 ($3,000,000) 3000000

Year 1 $1,100,000 956521.7

Year 2 $1,450,000 1096408

Year 3 $1,300,000 854771.1

Year 4 $950,000 543165.6

1. What is the project’s IRR? (10 pts)

2. What is the project’s NPV? (15 pts)

3. Should the company accept this project and why (or why not)? (5 pts)

4. Explain how depreciation will affect the present value of the project. (10 pts)

5. Provide examples of at least one of the following as it relates to the project: (5 pts each)

a. Sunk Cost

b. Opportunity cost

c. Erosion

6. Explain how you would conduct a scenario and sensitivity analysis of the project. What would be some project-specific risks and market risks related to this project? (20 pts)

Task 5: Cost of Capital

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 obtaining this rate.

1. Compute the cost of debt. Assume AirJet Best Parts Inc. is considering issuing new bonds. Select current bonds from one of the main competitors as a benchmark. Key competitors include Raytheon, Boeing, Lockheed Martin, and the Northrop Grumman Corporation.

AirJet Best Parts Inc’s selected key competitor: Being Co.

a. What is the YTM of the competitor’s bond? You may use a number of sources, but we recommend Morningstar. Find the YTM of one 15 or 20 year bond with the highest possible creditworthiness. You may assume that new bonds issued by AirJet Best Parts, Inc. are of similar risk and will require the same return. (5 pts)

b. What is the after-tax cost of debt if the tax rate is 34%? (5 pts)

c. Explain what other methods you could have used to find the cost of debt for AirJet Best Parts Inc.(10 pts)

d. Explain why you should use the YTM and not the coupon rate as the required return for debt. (5 pts)

2. Compute the cost of common equity using the CAPM model. For beta, use the average beta of three selected competitors. You may obtain the betas from Yahoo Finance. Assume the risk free rate to be 3% and the market risk premium to be 4%.

a. What is the cost of common equity? (5 pts)

b. Explain the advantages and disadvantages to use the CAPM model as the method to compute the cost of common equity. Compare and contrast this method with the dividend growth model approach. (10 pts)

3. Compute the cost of preferred equity assuming the dividend paid for preferred stock is $2.93 and the current value of the stock is $50 per share.

a. What is the cost of preferred equity? (5 pts)

b. Is there any other method to compute this cost? Explain. (5 pts)

4. Assuming that the market value weights of these capital sources are 30% bonds, 60% common equity and 10% preferred equity, what is the weighted cost of capital of the firm? (10 pts)

5. Should the firm use this WACC for all projects? Explain and provide examples as appropriate. (10 pts)

6. Recompute the net present value of the project based on the cost of capital you found. Do you still believe that your earlier recommendation for accepting or rejecting the project was adequate? Why or why not? (5 pts)

New cost of capital = 5.51%

Year Cash Flow PV

0 ($3,000,000) -3000000

1 $1,100,000 1042555

2 $1,450,000 1302509

3 $1,300,000 1106783

4 $950,000 766565.2

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