1. Are the following capital budgeting or financing decisions?

A. Intel decides to spend $1 billion to develop a new microprocessor.

B. Avon spends $200 million to launch a new range of cosmetics in US markets.

C. Pfizer issues new shares to buy a small biotech company.

D. Toyota borrows 350 million yen from Bank of Tokyo.

2. Would the following activities increase or decrease the firm’s cash balance?

A. Inventories are increased.

B. Accounts payable are decreased.

C. Additional common stock issued.

D. New equipment is purchased.

You are completing a software development project. This project is expected to add SIX new features to a popular software program you sell to customers. The projected cost for the project is $100,000 and the development is expected to take 5 weeks. At the end of the second week, you spent $17,500 per new software feature and you completed the development of two new features. You are about to start the development of the third new software feature. Based on this information find the BAC, PV, EV, and AC. Please show how you came up with answer.

Suppose that a company's equity is currently selling for $24.75 per share and that there are 3.3 million shares outstanding and 13 thousand bonds outstanding, which are selling at 94 percent of par. If the firm was considering an active change to their capital structure so that the firm would have a D/E of 0.6, which type of security (stocks or bonds) would they need to sell to accomplish this, and how much would they have to sell? (Round your intermediate ratio to 4 decimal places.)

• $20,051,213 in new equity

• $23,035,265 in new debt

• $23,035,265 in new equity

• $20,051,213 in new debt

Question text

Determining the Cost of an Asset
Omar Corporation paid $400,000 for a tract of land that had an old gas station on it. The gas station was demolished at a cost of $20,000 and a new warehouse was constructed on the site at a cost of $640,000.

In addition, several other costs were incurred:

(a) What value should be assigned to the tract of land?

$Answer ?

(b) What value should be assigned to the new warehouse?

$Answer ?

Suppose that Denver Financial Co. expects the exchange rate of the New Zealand dollar (NZ$) to appreciate from its current level of 0.5 to 0.55 in 30 days. Denver Financial seeks to capitalize on this potential opportunity.

Suppose that Denver Financial begins by borrowing $30,000,000 and converting it to New Zealand dollars (NZ$).

The following table shows the short-term interest rates (annualized) in the interbank market.

After exchanging $30,000,000 for New Zealand dollars, Denver Financial will have NZ $_______ (New Zealand dollars).

a.) $60,000,000

b.) $42,000,000

c.)$48,000,000

d.)54,000,000

Your company maintains a database with information on your customers, and you
are interested in analyzing patters observed over the past quarter. 23% of customer
in the database placed new orders within this period. However, for those customers
who had a salesperson assigned to them, the new order rate was 58%. Overall, 14%
of customers within the database had salesperson assigned to them.
a) Draw a contingency table for this situation.
b) What percentage of customers in the database placed a new order but did not
have a salesperson assigned to them.
c) Given that a customer did not place a new order, what is the probability that the
customer had a salesperson assigned to him or her?
d) If a customer did not have a salesperson assigned to him or her, what is the
probability that the customer placed a new order?

An automotive manufacturer wants to know the proportion of new car buyers who prefer foreign cars over domestic.

Step 1: Suppose a sample of 2851 new car buyers is drawn. Of those sampled, 684 preferred foreign over domestic cars. Using the data, estimate the proportion of new car buyers who prefer foreign cars. Enter your answer as a fraction or a decimal number rounded to three decimal places.

Step 2: Suppose a sample of 28512851 new car buyers is drawn. Of those sampled, 684684 preferred foreign over domestic cars. Using the data, construct the 98%98% confidence interval for the population proportion of new car buyers who prefer foreign cars over domestic cars. Round your answers to three decimal places.