Question
In: Finance
Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to...
Treynor Pie Company is a food company specializing in
high-calorie snack foods. It is seeking to diversify its food
business and lower its risks. It is examining three companies—a
gourmet restaurant chain, a baby food company, and a nutritional
products firm. Each of these companies can be bought at the same
multiple of earnings. The following represents information about
all the companies.
| Company | Correlation with Treynor Pie Company |
Sales ($ millions) |
Expected Earnings ($ millions) |
Standard Deviation in Earnings ($ millions) |
||||||||||
| Treynor PieCompany | + | 1.0 | $ | 197 | $ | 9 | $ | 4.0 | ||||||
| Gourmet restaurant | + | .6 | 64 | 4 | 1.3 | |||||||||
| Baby food company | + | .3 | 54 | 2 | 1.8 | |||||||||
| Nutritionalproducts company | − | .7 | 75 | 3 | 3.2 | |||||||||
a-1. Compute the coefficient of variation for each
of the four companies. (Enter your answers in millions
(e.g., $100,000 should be entered as ".10"). Round your answers to
3 decimal places.)
a-2. Which company is the least risky?
| Nutritional products company | |
| Treynor Pie Company | |
| Baby food company | |
| Gourmet restaurant |
a-3. Which company is the most risky?
| Baby food company | |
| Treynor Pie Company | |
| Nutritional products company | |
| Gourmet restaurant |
b. Which of the acquisition candidates is most
likely to reduce Treynor Pie Company's risk?
| Nutritional products company | |
| Gourmet restaurant | |
| Baby food company |
Solutions
jeff jeffy answered 2 months agoRelated Solutions
Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to...
Treynor Pie Company is a food company specializing in
high-calorie snack foods. It is seeking to diversify its food
business and lower its risks. It is examining three companies—a
gourmet restaurant chain, a baby food company, and a nutritional
products firm. Each of these companies can be bought at the same
multiple of earnings. The following represents information about
all the companies. Company Correlation with Treynor Pie Company
Sales ($ millions) Expected Earnings ($ millions) Standard
Deviation in Earnings ($...
Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to...
Treynor Pie Company is a food company specializing in
high-calorie snack foods. It is seeking to diversify its food
business and lower its risks. It is examining three companies—a
gourmet restaurant chain, a baby food company, and a nutritional
products firm. Each of these companies can be bought at the same
multiple of earnings. The following represents information about
all the companies. Company Correlation with Treynor Pie Company
Sales ($ millions) Expected Earnings ($ millions) Standard
Deviation in Earnings ($...
Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to...
Treynor Pie Company is a food company specializing in
high-calorie snack foods. It is seeking to diversify its food
business and lower its risks. It is examining three companies—a
gourmet restaurant chain, a baby food company, and a nutritional
products firm. Each of these companies can be bought at the same
multiple of earnings. The following represents information about
all the companies. Company Correlation with Treynor Pie Company
Sales ($ millions) Expected Earnings ($ millions) Standard
Deviation in Earnings ($...
Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to...
Treynor Pie Company is a food company specializing in
high-calorie snack foods. It is seeking to diversify its food
business and lower its risks. It is examining three companies—a
gourmet restaurant chain, a baby food company, and a nutritional
products firm. Each of these companies can be bought at the same
multiple of earnings. The following represents information about
all the companies.
Company
Correlation with
Treynor Pie
Company
Sales
($ millions)
Expected Earnings
($ millions)
Standard Deviation
in Earnings...
Healthy Selections Cereals, Inc. (HSC) is a large food-processing company specializing in whole-grain, high-energy, low-calorie, and...
Healthy Selections Cereals, Inc. (HSC) is a large
food-processing company specializing in whole-grain, high-energy,
low-calorie, and low-fat cereals that appeal to the
health-conscious consumer. HSC has a premium image in the market,
and most of its customers are loyal and willing to pay a bit extra
to get the healthy choice that HSC offers. HSC’s cereals are made
in a series of processes that begin with sorting, cleaning,
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Healthy Eating Foods Company is a distributor of nutritious snack foods such as granola bars. On...
Healthy Eating Foods Company is a distributor of nutritious
snack foods such as granola bars. On December 31, 2019, the firm’s
general ledger contained the accounts and balances that
follow.
ACCOUNTS AND BALANCES
Cash
$
30,700
Dr.
Accounts Receivable
35,800
Dr.
Allowance for Doubtful
Accounts
480
Cr.
Merchandise Inventory
86,600
Dr.
Supplies
11,000
Dr.
Prepaid Insurance
6,120
Dr.
Office Equipment
8,500
Dr.
Accum. Depreciation—Office
Equipment
2,710
Cr.
Warehouse Equipment
31,600
Dr.
Accum. Depreciation—Warehouse
Equipment
10,800
Cr.
Notes Payable—Bank
35,000
Cr....
Healthy Eating Foods Company is a distributor of nutritious snack foods such as granola bars. On...
Healthy Eating Foods Company is a distributor of nutritious
snack foods such as granola bars. On December 31, 2019, the firm’s
general ledger contained the accounts and balances that follow.
ACCOUNTS AND BALANCES Cash $ 30,600 Dr. Accounts Receivable 35,700
Dr. Allowance for Doubtful Accounts 470 Cr. Merchandise Inventory
86,500 Dr. Supplies 10,900 Dr. Prepaid Insurance 6,000 Dr. Office
Equipment 9,800 Dr. Accum. Depreciation—Office Equipment 2,700 Cr.
Warehouse Equipment 36,300 Dr. Accum. Depreciation—Warehouse
Equipment 10,600 Cr. Notes Payable—Bank 34,500 Cr....
Healthy Eating Foods Company is a distributor of nutritious snack foods such as granola bars. On...
Healthy Eating Foods Company is a distributor of nutritious
snack foods such as granola bars. On December 31, 2019, the firm’s
general ledger contained the accounts and balances that follow.
ACCOUNTS AND BALANCES
Cash
$
30,300
Dr.
Accounts Receivable
35,400
Dr.
Allowance for Doubtful
Accounts
440
Cr.
Merchandise Inventory
86,200
Dr.
Supplies
10,600
Dr.
Prepaid Insurance
5,640
Dr.
Office Equipment
9,700
Dr.
Accum. Depreciation—Office
Equipment
2,670
Cr.
Warehouse Equipment
34,200
Dr.
Accum. Depreciation—Warehouse
Equipment
10,000
Cr.
Notes Payable—Bank
33,000
Cr....
Which food groups are often missing from high-calorie, energy-dense diets?
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Les Moore retired as president of Goodman Snack Foods Company but is currently on a consulting...
Les Moore retired as president of Goodman Snack Foods Company
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answer, but calculate your final answer using the formula and
financial calculator methods. a. If Mr. Moore’s opportunity cost
(potential return) is 11 percent, what is the present value of his
consulting contract? (Do not round intermediate calculations. Round
your final answer to 2 decimal...
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