7. Indri runs a soil testing business. He decides to form a company to take over the business. He is the sole shareholder and sole director. Indri sells his business to the company at an inflated price and lends the company $90,000 to help meet the cost of purchase. As security for the loan, Indri arranges a mortgage over a vacant block of land, which he transferred to the company as part of the business sale. In the first year of operation, the business makes a small profit (after paying both Indri and his daughter’s wages), but by the end of 2012 it is clear that the building industry is going through a major slump. Indri becomes desperate and works even harder. While working late into the night, Indri badly injures his hand and needs surgery. He is away from the business for 2 weeks. His efforts to keep the business afloat are in vain and the company is forced into liquidation. On realization of the assets, it is found that the company has approximately $95,000 to go towards meeting creditors’ claims of $210,000:

(i) If Indri is the only secured creditor, will he get his $90,000 back?

(ii)Can Indri claim workers’ compensation for the injuries to his hand and his time off work?

Examine the various ways in which a company can grow in terms of its common stock.

OceanGate sells external hard drives for $280 each. Its total fixed costs are $30 million, and its variable costs per unit are $230. The corporate tax rate is 30%. If the economy is strong, the firm will sell 2 million drives, but if there is a recession, it will sell only half as many.

a. What is the firm's degree of operating leverage (defined as the ratio of the percent change in EBIT to the percent change in sales) in going from a recession to a strong economy?

Degree of operating leverage            

b. If the economy enters a recession, what will be the firm’s after-tax profit? (Enter your answer in millions.)

After-tax profit   

Morgan Stanley and Goldman Sachs are examples of banks that perform investment banking duties. Analyze the method for transferring money to firms seeking cash.

The market price of a security is $52. Its expected rate of return is 12.1%. The risk-free rate is 4% and the market risk premium is 7.3%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)? Assume that the stock is expected to pay a constant dividend in perpetuity. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Market price=

Summarize the basic process for valuing assets

Why business owners should know about finance?

Roger issued 40 year bonds six years ago at a coupon rate of 4.50 percent, and the bond smake semi-annual payments. If the YTM on these bonds is 4.6 percent, what is the current bond price

Describe the benefits of the private-equity ownership model versus public ownership and family-ownership.

3.  Problem 3-11 (Balance Sheet Analysis)

Profit Margin and Debt Ratio

Assume you are given the following relationships for the Haslam Corporation:

Calculate Haslam's profit margin and liabilities-to-assets ratio. Do not round intermediate calculations. Round your answers to two decimal places.

Profit margin: _______%

Liabilities-to-assets ratio: ______%

Suppose half of its liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. ________%

4.  Problem 3-12 (Comprehensive Ratio Calculations)

Know what an offshore financial center means and be able to differentiate between an operational center and booking center

can you please give example and explanation about opportunities cost, discount cash flow, discount rates ,prescent value, free cash flow, NPV, IRR , stock valuation in finance management.

Describe the characteristics and benefits of interest rate swaps compared with other forms of interest rate risk management, such as forward rate agreements and interest rate futures