ABC Paper stock was $36per share at the end of last year. Since then, it paid a $1.50 per share dividend in the last year. The stock price is currently $35. Suppose you own 300 shares of ABC Paper. Which of the following statements is (are) correct?(x)Your dollar return on ABC Paper stock was $150 for the year.(y)Your percent return on ABC Paper stock was 1.39 percent for the year.(z)If you had owned more stock then you would have experienced a dollar return greater than $150 but the same percent return.
A.(x), (y) and (z)B.(x) and (y) onlyC.(x) and (z) onlyD.(y) and (z) onlyE.(z) only
You have a portfolio of fivestocks.You invested $5,150 in Intel(INTC), $6,520 in Tenneco(TEN), $10,345 in Alibaba(BABA), $4,370 in Aurora Cannabis (ACB)and $8,435in Occidental Petroleum(OXY). Which of thefollowing statements is (are) correct?(
x)The portfolio weight on the Intel stock is less than 0.146 and the portfolio weight on Occidental Petroleum (OXY) stockismore than 0.243.
(y)The combined portfolio weight of theTenneco and Aurora Cannabis stock is more than 0.308 but less than 0.316
z)If you sold off $1,000 of Alibaba stock and used that $1,000 to purchase Aurora Cannabis stock then the portfolio weight of Alibaba would fall from 0.297 to below 0.269and the portfolio weight of Aurora Cannabis stock would rise above 0.152.
A.(x), (y) and (z) B.(x) and (y) only C.(x) and (z) only D.(y) and (z) only E.(y) only
In: Finance
The income statement of XYZ Company for the 2016 financial year
was below expectations
be low
| Financia l Item | Total in TZS |
| Sales (40,000 units) | 400,000,000 |
| Cost of raw materials | 80,000,000 |
| Other variable costs | 100,000,000 |
| Fixed factory overheads | 160,000,000 |
| Fixed administrative overheads | 30,000,000 |
| Sales commission (3% sales value) | 12,000,000 |
| Variable delivery costs | 20,000,000 |
| Other fixed costs | 30,000,000 |
a) What is the break-even point of the company?
b) The company proposes to reduce the selling price per unit by 10% and by doing so demand is expected to increase by 25%. What would be profit or loss if this proposal is implemented?
In: Finance
Suppose you are going to receive $ 35,000 per year for 18 years at the beginning of each year. Compute the present value of the cash flows if the appropriate interest rate is 14 percent. Round it two decimal places, and do not include the $ sign, e.g., 123456.78.
In: Finance
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Pearl Corp. is expected to have an EBIT of $3,300,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $150,000, and $190,000, respectively. All are expected to grow at 17 percent per year for four years. The company currently has $17,000,000 in debt and 1,500,000 shares outstanding. At Year 5, you believe that the company's sales will be $25,350,000 and the appropriate price-sales ratio is 2.5. The company’s WACC is 8.9 percent and the tax rate is 25 percent. |
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What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
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Pearl Corp. is expected to have an EBIT of $3,300,000 next year. Depreciation, the increase in net working capital, and capital spending are expected to be $160,000, $150,000, and $190,000, respectively. All are expected to grow at 17 percent per year for four years. The company currently has $17,000,000 in debt and 1,500,000 shares outstanding. After Year 5, the adjusted cash flow from assets is expected to grow at 3.5 percent indefinitely. The company’s WACC is 8.9 percent and the tax rate is 25 percent. |
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What is the price per share of the company's stock? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
In: Finance
Maria Bakery is considering a 3-year project with an initial cost of $93,000. The project will not directly produce any sales but will reduce operating costs by $31,000 a year. The equipment is classified as MACRS 7-year property. The MACRS table values are .1429, .2449, .1749, .1249, .0893, .0892, .0893, and .0446 for Years 1 to 8, respectively. At the end of the project, the equipment will be sold for an estimated $43,270. The tax rate is 34 percent and the required return is 10 percent. An extra $12,000 of inventory will be required for the life of the project. What is the total cash flow for Year 3?
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$72,360.75 |
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$80,375.96 |
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$91,599.44 |
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$96,848.84 |
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$102,219.50 |
In: Finance
2. Deb is the sole shareholder of Timeless Corporation, a calendar year C corporation. In the current year, Trash earned taxable income of $250,000 and distributed $175,000 to Deb. Kyle is the sole shareholder of Swanky Corporation, an S corporation. In the current year, Swanky earned taxable income of $250,000 and distributed $175,000 to Kyle. Assume both Kyle and Deb are in the highest regular tax bracket (use 37%). Contrast the tax treatment of Timeless Corporation and Deb with the tax treatment of Swanky Corporation and Kyle.
In: Accounting
Budgets are developed months before the end of the current year and are best guess estimates of future performance. What do you think might be some pitfalls of budgeting, and how can they be avoided?
In: Accounting
5. The price of a stock is $40. The price of a one-year European put option on the stock with a strike price of $30 is quoted as $7 and the price of a one-year European call option on the stock with a strike price of $50 is quoted as $5. Suppose that an investor buys 100 shares, shorts 100 call options, and buys 100 put options. a. Construct a payoff and profit/loss table b. Draw a diagram illustrating how the investor’s payoff and profit or loss at expiation.
In: Finance
DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.
| Month | ||||||||
| 1 | 2 | 3 | 4 | |||||
| Throughput time (days) | ? | ? | ? | ? | ||||
| Delivery cycle time (days) | ? | ? | ? | ? | ||||
| Manufacturing cycle efficiency (MCE) | ? | ? | ? | ? | ||||
| Percentage of on-time deliveries | 85 | % | 80 | % | 77 | % | 74 | % |
| Total sales (units) | 2180 | 2087 | 1980 | 1905 | ||||
Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:
| Average per Month (in days) | |||||||||
| 1 | 2 | 3 | 4 | ||||||
| Move time per unit | 0.8 | 0.5 | 0.6 | 0.6 | |||||
| Process time per unit | 3.1 | 2.9 | 2.8 | 2.6 | |||||
| Wait time per order before start of production | 24.0 | 26.3 | 29.0 | 31.4 | |||||
| Queue time per unit | 4.7 | 5.3 | 6.0 | 6.8 | |||||
| Inspection time per unit | 0.5 | 0.6 | 0.6 | 0.5 | |||||
Required:
1-a. Compute the throughput time for each month.
1-b. Compute the delivery cycle time for each month.
1-c. Compute the manufacturing cycle efficiency (MCE) for each month.
2. Evaluate the company’s performance over the last four months.
3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.
3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.
In: Accounting