Problems/Answers: FIN 534
I have provided the answers to Chapters 6 and 7, you are to provide the solutions and explanations, namely, how were you able to determine the same answers. I want to see, how you go about solving these problems. I would encourage you to use the MyFinanceLab and go over the previous Chapters. Keep in mind that these responses are due, November 1, 2010. I will use your submission to grade you and not the group work that you did in class, last Thursday. I trust that you will find this helpful. Also, provide all submissions to the dropbox. I am in the process of setting it up. So give me until Monday before you start with your submission. MY QUESTIONS WILL BE IN BOLD CAPS.
Chapter 6:
Problem 3: 6-3. You are
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g. Interest expense on the debt borrowed to pay the construction costs.
a. No, WHY, EXPLAIN?
b. Yes, WHY, EXPLAIN?
c. Yes, WHY, EXPLAIN?
d. No, WHY, EXPLAIN?
e. This is a capital expenditure associated with opening the new store. WHY, EXPLAIN?
f. Yes, this is an opportunity cost of opening the new store. WHY, EXPLAIN?
g. WHY, EXPLAIN?
Problem 9: 7-9. Elmdale Enterprises is deciding whether to expand its production facilities. Although long-term cash flows are difficult to estimate, management has projected the following cash flows for the first two years (in millions of dollars): a. What are the incremental earnings for this project for years 1 and 2?
b. What are the free cash flows for this project for the first two years?
a.
Year 1 2
Incremental Earnings Forecast ($000s)
1 Sales
2 Costs of good sold and operating expenses other than depreciation
3 Depreciation
4 EBIT
5 Income tax at 35%
6 Unlevered Net Income 39.0 41.6
FILL IN THE NUMERS USED TO DETERMINE UNLEVERED NET INCOME
b.
Free Cash Flow ($000s) 1 2
7 Plus: Depreciation
8 Less: Capital Expenditures
9 Less: Increases in NWC
10 Free Cash Flow 29.0 29.6 FILL IN THE NUMERS USED TO DETERMINE FREE CASH FLOW Problem 15: 7-15. Markov Manufacturing recently spent $15 million to purchase some equipment used in the manufacture of disk drives. The firm expects that this equipment will have a
5. In HANESS, the men age 18 and over had an average height of 69 inches and an SD of 3 inches. The histograms is show below, with a normal curve. The percentage of men with heights between 66 inches and 72 inches is exactly equal to the area between (a) and (b) under (c). This percentage is approximately equal to the area between (d) and (e) under the (f). Fill in the blanks.
The rise in revenue was rapid starting from the year of operations. The key period of business was from April to September were revenues were equal to 65% of total revenue as the product was seasonal. The basis of forecasting for the year 1981 & 1982 is the expectations of sales by Mr. Turner & Mr. Rose. It is given that total sales were $ 15.80 million in first half of year 1981 and the total sales in 1981 to reach $ 30 million. Profit after tax was expected to be $ 1 million for 1st half and we assumed for the next half, profit will be in proportion to first half & expected to be amounting to $ 0.90 million. For year 1982, the sales expectation by Mr. Rose was around more than $ 71 million &
As much as Europe’s worldwide empires had globalized the war, so too its economic linkages
Cynthia has always performed well in her job, and has received good performance appraisals. She has been denied a promotion to a more lucrative sales position because she was told she “is not attractive enough” for the position. Cynthia is likely a victim of
The Constitution was an attempt to address problems of decentralization that were experienced under the Articles of Confederation.
19 Facilitate learning and development activities to meet individual needs and preferences (HSC 3004) Assessment of this unit This unit introduces you to the knowledge and skills that are needed to support individuals to plan, take part in and evaluate learning and development activities. It focuses on the benefits of learning and development activities to individuals, the importance of identifying individual needs and the role of the practitioner in planning, preparing, facilitating and reviewing learning and development activities. You will need to: 1.
[LO 1] Augustana received $10,000 of qualified dividends this year. Under what circumstances would all $10,000 be taxed at the same rate? Under what circumstances might the entire $10,000 of income not be taxed at the same rate?
The Eskimo’s predict the sudden sea squalls but studying the habits of seals. The elder Eskimo was explaining seal patterns for when a seal comes up for breathe under the water. If the seal comes out of the water to breath with its back arched up right to sky and it’s head fully out of the water exposed then the weather will be a normal. But if the seal surfaces faced down with halfway submerged under water still then this was a preview for ominous weather to come that day.
Interstate Manufacturing is considering either replacing one of its old machines with a new machine or having the old machine overhauled. Information about the two alternatives follows. Management requires a 10% rate of return on its investments.
While Jim helps Billy recover from his stroke, Billy tells Jim about his former who want his sea chest
Long ago, at a minute village adjacent to Roc-A-Fella peaks, there lived three puerile boys. Jermaine, Nas, and Kendrick. Kendrick was a scion of the lightning district of the village, Nas was born and raised in the fire district, and Jermaine was a simple village boy who grew crops and raised cattle. Ever since the village was established it was divided into four main groups. The fire district, the lightning district, the village folk, and the All Mighty’s. Mostly all lived in placidity until one day.