1. A shortcoming of return on investment (ROI) is that it may not lead managers to accept good investment opportunities if
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a. |
ROI of the investment is higher than the present ROI of the division. |
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b. |
the ROI of the investment is the same as the present ROI of the division. |
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c. |
the ROI of the investment is lower than the present ROI of the division. |
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d. |
None of the answers is correct. |
2. Which of the following statements is true concerning economic value added (EVA)?
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a. |
EVA alleviates the shortcoming of the return on investment measurement. |
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b. |
EVA calculates a percentage for comparison purposes. |
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c. |
EVA is required by the New York Stock Exchange. |
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d. |
EVA is the same as economic payback analysis. |
3. Which of the following defines Economic value added (EVA)?
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a. |
annual after-tax operating profit minus the total annual cost of capital. |
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b. |
annual before-tax operating profit minus the total annual cost of capital. |
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c. |
annual after-tax operating profit plus the total annual cost of capital. |
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d. |
annual before-tax operating profit plus the total annual cost of capital. |
In: Accounting
NPVs and IRRs for Mutually Exclusive Projects
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Because both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $23,000, whereas the gas-powered truck will cost $17,100. The cost of capital that applies to both investments is 11%. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,500 per year, and those for the gas-powered truck will be $4,750 per year. Annual net cash flows include depreciation expenses. Calculate the NPV and IRR for each type of truck, and decide which to recommend. Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places.
| Electric-powered forklift truck |
Gas-powered forklift truck |
||
| NPV | $ | $ | |
| IRR | % | % |
In: Finance
In September 1963, the first issue of the comic book X-MEN was issued. The original price for that issue was $0.12.
By September 2019, 56 years later, the value of the near-mint copy of this comic book had risen to $55,000.
What annual rate of interest would you have earned if you had bought the comic in 1963 and sold it in 2019?
The annual rate of interest you would have earned is nothing %. (Round to two decimal places.)
In: Finance
Environmentalists concerned about the impact of high-frequency radio transmissions on birds found that there was no evidence of a higher mortality rate among hatchlings in nests near cell towers. They based this conclusion on a test using alpha=0.05. Would they have made the same decision at alpha=0.10? How about alpha=0.01? Explain. (Hint: It would help if you write the null and alternative hypotheses).
Please show all work. Typed work only. no handwritten.
In: Statistics and Probability
1.Describe the two different ways in which an ADI may be exposed to interest rate risk. What would it do – in respect of the two different aspects of interest rate risk – if it thought interest rates were going to increase in the near future and wanted to take advantage of this prediction? Explain how these actions will be of benefit if interest rates do increase as predicted?
2.Describe how a bank could use derivatives to hedge an exposure to decreasing interest rates.
In: Finance
Explain why each of the following actions would negatively impact the results of a recrystallization procedure. Answer each in two sentences or less.
i) After achieving proper dissolution, immediately cooling the solution in an ice bath.
ii) Dissolving all of the material at room temperature, then heating to near the solvent boiling point, followed by cooling to 0 °C.
iii) Upon collection of the recrystallized material on a filter, rinsing with 1-2 mL of room temperature solvent.
In: Chemistry
Let us say that you work for Starbucks!
Since college campuses are traditionally very attractive locations for Coffee-shops, your District manager is proposing to set up a coffee shop near at the junction of Broadway and 35th .
As a statistical consultant how would you explore this option?
Discuss what would be your population and variables, type of variables and how many?
Do you think some kind of secondary data would suffice in this case?
In: Statistics and Probability
Corporate management and the Board of Directors fulfil a vital role to ensure good corporate governance within a company. Which of the reasons, listed below, has been a major contributing factor to corporate governance scandals?
Question 23 options:
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Changes to government regulations regarding public reporting and disclosure |
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Unclear separation of ownership and management |
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Maximizing current share holder value tends to focus on the value near term |
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Shareholders have dumped the company's stock |
In: Finance
In: Economics
Exercise 5: Let's Build a Moon Base
Prompt: One day in the future we will decide to establish a colony on the Moon. Where should we put it?
Analysis Directions: Make a list of the advantages and disadvantages of locating such a human habitat on poles. Should it be in a crater the near side, the far side, or at the? Highland? Maria?
Also, what site would be best for doing visible-light and radio astronomy from observatories on the Moon? Comment on each other’s lists.
In: Physics