Johnson Electronics is considering extending trade credit to some customers previously considered poor risks. Sales would increase by $260,000 if credit were extended to these new customers. Of the new accounts receivable generated, 8 percent will prove to be uncollectible. Additional collection costs will be 5 percent of sales, and production and selling costs will be 74 percent of sales. The firm is in the 35 percent tax bracket. a. Compute the incremental income after taxes. b. What will Johnson’s incremental return on sales be if these new credit customers are accepted? (Input your answer as a percent rounded to 2 decimal places.) c. If the accounts receivable turnover ratio is 6 to 1, and no other asset buildup is needed to serve the new customers, what will Johnson’s incremental return on new average investment be? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)

REPLACEMENT CHAIN Rini Airlines is considering two alternative planes. Plane A has an expected life of 5 years, will cost $95 million, and will produce after-tax cash flows of $35 million per year. Plane B has a life of 10 years, will cost $112 million, and will produce after-tax cash flows of $25 million per year. Rini plans to serve the route for 10 years. The company’s WACC is 9%. If Rini needs to purchase a new Plane A, the cost will be $105 million, but cash inflows will remain the same. Should Rini acquire Plane A or Plane B? Explain your answer.

When writing a financial-based research paper on the company General Motors, we will discuss the industry in terms of its industrial life cycle. Discuss industry problems and opportunities for this year and specifically discuss the relationship between the industry and the whole economy, such as business-cycle sensitivity.

Comparing all methods. Given the following​ after-tax cash flow on a new toy for​ Tyler's Toys, find the​ project's payback​ period, NPV, and IRR. The appropriate discount rate for the project is 12​%. If the cutoff period is 6 years for major​ projects, determine whether management will accept or reject the project under the three different decision models. ​(Click on the following icon in order to copy its contents into a​ spreadsheet.) Initial cash​ outflow: ​$11 comma 600 comma 000 Years one through four cash​ inflow: ​$2 comma 900 comma 000 each year Year five cash​ outflow: ​$1 comma 160 comma 000 Years six through eight cash​ inflow: ​$518 comma 667 each year What is the payback period for the new toy at​ Tyler's Toys? 7.24 years  ​(Round to two decimal​ places.) Under the payback​ period, this project would be rejected . ​(Select from the​ drop-down menu.) What is the NPV for the new toy at​ Tyler's Toys? ​$ nothing  ​(Round to the nearest​ cent.)

You have a $9,000 portfolio which is invested in stocks A, B, and a risk-free asset. $4,000 is invested in stock A. Stock A has a beta of 1.84 and stock B has a beta of 0.68. How much needs to be invested in stock B if you want a portfolio beta of .95?
Select one:
a. $7,279
b. $5,000
c. $0
d. $1,750
e. $3,279

What are some instances where less than the commonly recommended emergency fund benchmark of 3 to 6 months may be appropriate?

Access your company’s financial statements or any public company statement; explain the difference between each financial statement

What are her expected returns and the risk from her investment in the three​ assets? How do they compare with investing in asset M​ alone?  

Hint​:

Find the standard deviations of asset M and of the portfolio equally invested in assets​ M, N, and O.

b.  Could Sally reduce her total risk even more by using assets M and N​ only, assets M and O​ only, or assets N and O​ only? Use a​ 50/50 split between the asset​ pairs, and find the standard deviation of each asset pair.

s.

Can you and your team prepare the income statement table, the operating cash flow (OCF) table, and the total cash flow from assets (CFFA) table for this project?

A company is considering a 6-year project that requires an initial outlay of $23,000. The project engineer has estimated that the operating cash flows will be $4,000 in year 1, $6,000 in year 2, $7,000 in year 3, $7,000 in year 4, $7,000 in year 5, and $9,000 in year 6. At the end of the project, the equipment will be fully depreciated, classified as 5-year property under MACRS. The project engineer believes the equipment can be sold for $5,000 at the end of the project. If the tax rate is 32% and the required rate of return is 16%, what is the net present value (NPV) of this project? (Answer to the nearest dollar.)

Use the information below and the Black-Scholes Option Pricing Model to answer the following questions.

a. What is the price of a call?
b. What is the exercise value of the call option?

c. What is the time value of the call option?

Dabney Electronics currently has no debt. Its operating income is $20 million and its tax rate is 40 percent. It pays out all of its net income as dividends and has a zero growth rate. The current stock price is $40 per share, and it has 2.5 million shares of stock outstanding. If it moves to a capital structure that has 40 percent debt and 60 percent equity (based on market values), its investment bankers believe its weighted average cost of capital would be 10 percent. What would its stock price be if it changes to the new capital structure?

What is your take on Jack Welch’s strategic leadership?

Discuss his strategy-making process for GE to be competitive.

Based on your independent research, what was the nature of the competitive advantage of GE under Jack Welch’s leadership?

The textbook defines six strategies. Which one did GE adopt and explain how and why?

Based on your independent research, discuss GE’s corporate governance and social responsibility during Jack Welch’s era.

A company that manufactures and sells tricycles around the world just completed a sale of 3,000 units to a chain of stores in Sweden at a contracted price of 375 krona per tricycle, with payment to be received in 90 days. The exchange rate today is 7.5 krona per dollar but it unexpectedly moves to 7.7 at the time of the payment. What is the fall in domestic revenue due to this move in the exchange rate?