How does the return on invested capital (ROIC) affect a company's cash flow? What are the relationship between ROIC, growth, and cash flow. Please provide references.

Q: You borrow $1.000 and amortize the loan by making 12 monthly payments of $90. What annual rate of…

A: Compound = Monthly = 12Present Value = pv = $1000Time = nper = 12 Payment = pmt = $90

Q: QUESTION 16 Consider the following statements and indicate whether they are true or false. For some…

A: Present value refers to the current date valeu of the future cash flows and maturity amount…

Q: Assume that you just bought a 5-year bond that pays interest annually of $80 ead year and will…

A: Yield to maturity of bond is rate of return realized on bond when bond is held till maturity and…

Q: Sunshine Inc. has a WACC of 10.9 percent. The company's cost of equity is 12 percent, and its cost…

A: Weighted Average Cost of Capital = WACC = 10.9%Cost of Equity = ce = 12%Cost of Debt = cd = 8.9%Tax…

Q: Which of the following is NOT true of insurable risks? Risks can be insured even if they are not…

A: Insurable risk are the riska that an Insurance company will cover.For example - Fire risk, flood…

Q: Filter Corporation has a project available with the following cash flows: Year Cash Flow 0 −$ 14,500…

A: IRR represents the discount rate that makes the net present value (NPV) of all cash flows (both…

Q: If an investment advisor promises to double your money in 6 years, she is promising an annual rate…

A: Using the following formula we can compute annual rate of return.Future Value (FV) = Present Value…

Q: City Bank pays two per cent simple interest on its savings accounts. Central Bank pays two per cent…

A: City BankInterest rate = 2% simple interestFuture value = $3,000Period = 16 yearsThe amount of…

Q: 10. Company Z's earnings and dividends per share are expected to grow indefinitely by 5% a year. If…

A: The present value of growth opportunities can be calculated using this formula,

Q: The following information relating to an investment in equipment has been extracted from the books…

A: The tax amount in the fourth year relating to the sale of the equipment can be calculated by using…

Q: Malaysian Island Resort. Theresa Nunn is planning a 30-day vacation on Pulau Penang, Malaysia, one…

A: The exchange rate is a variable that compares one currency's worthiness to another. It is measured…

Q: Current Ratio can help a firm determine their ability to cover their current liabilities. Y/N

A: Current ratio is a financial metric used to evaluate a company's short term liquidity and its…

Q: A corporate bond with a coupon rate of 7% pays interest semiannually and has a maturity date of May…

A: ParticularsValuesFace value of the bond $ 100.00Coupon rate7.00%Maturity date28-05-2030Settlement…

Q: Year George Kyparisis owns a company that manufactures sailboats. Actual demand for George's…

A: Year Winter…

Q: The New Fund had average daily assets of $3.8 billion in the past year. New Fund's expense ratio was…

A: The expense ratio of a fund is used to measure how much its assets are used for administrative and…

Q: The following graph shows the contingency graph for sellers of euro call options, with a premium of…

A: Selling a call option, also known as writing a call option, is a strategy in options trading where…

Q: OA. $1.60 OB. $2.40 OC. $1.00 OD. $2.00

A: The EPS (earning per share) is the amount that is earned by shareholders after net income. The EPS…

Q: Question 9 Which of the following statement is FALSE? OVC is a financial intermediary, meaning that…

A: VC is a financial intermediary, meaning that it takes the investors’ capital and invests it directly…

Q: A corporation has $50 billion of Earnings Before Interest and Taxes (EBIT) and $20 billion in…

A: EBIT stands for "Earnings Before Interest and Taxes." It is a measure of a company's operating…

Q: What does Jensen's alpha measure? a. An investor's reward in proportion to their assumption of…

A: Jensen's alpha is a single number that describes the predictive ability of a fund manager. The…

Q: Ive for the unknown number of years in each of the following: te: Do not round intermediate…

A: Present value is the equivalent value today of the future cash flow that is based on the time value…

Q: Suppose a lottery payout is $100,000 per year for the next ten years. If the annual interest rate is…

A: Money worth today is the present value of cash flow from the prize based on the time value of money.

Q: 15. Problem 5.33 (FV of Uneven Cash Flow) eBook You want to buy a house within 3 years, and you are…

A: Time = t = 3 YearsPayment = p = $6000Growth Rate = g = 5%Annual Rate of Return = r = 9%

Q: What is the payoff amount for the loan?

A: Present value illustrates the current value of a sum of money that will be received or paid in the…

Q: A nominal risk-free rate is currently 3.5%. A broker at INV Securities, has given you the following…

A: Liquidity risk premium and default risk premium are both taken into account to calculating short…

Q: P/E ratios Expected growth Dividend yield years Industrials 15.00 0.08 0.04 Industries 21.00 0.13…

A: Implied growth duration is the timeframe that is needed for an investor to get back his/her…

Q: Ghirardelli currently has no loans. The company's cost of capital is 12 percent annually.…

A: Value of company is the sum of value of equity and debt and is the present value of cash flow from…

Q: 7. Diversification and risk The graph shows the relationship between risk, measured as the standard…

A: The graph of the number of stocks in a portfolio and Risk is provided which shows as the number of…

Q: The following is information on interest-rates and exchange rates for Australia and the U.K. being…

A: The forward exchange rate can be calculated using the formula,

Q: Sarah is considering the purchase of a 20-year 7% coupon bond selling for $816 and a par value of…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: You currently don't have a car, but rent a car that's parked just outside your house whenever you…

A: In this we need to calculate present value of rental and salvage and compare with cost of car.

Q: On the advice of your uncle, you purchased 10 shares of a well-established U.S.-based corporate…

A: Cost of share bought initially is $20.5 for 10 sharesAfter 8, quarter from 0th period, bought…

Q: You unexpectedly earn $1,200. Instead of blowing through the money, you decide to invest it in a…

A: Present Value = pv = $1200Interest Rate = rate = 4.0%Future Value = fv = $66,000

Q: Kiddy Toy Corporation needs to acquire the use of a machine to be used in its manufacturing process.…

A: Variables in the questions:Useful life of machine=10 yearsSale value at the end of its useful…

Q: a. How much must you deposit annually to accumulate this amount? b. If you decide to make a large…

A: Annual deposit required depends on the future value money and time period and interest rate of the…

Q: The real risk-free rate is 3.50%. Inflation is expected to be 2.00% this year and 4.75% during the…

A: Treasury yield curve or government bond yield, is the interest rate at which the U.S. government…

Q: What is meant by LIBOR and LIBID. Which is higher?

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: u are planning to save for retirement over the next 35 years. To do this, you will invest $700 a…

A: Money invested in the stock market and bonds would grow to much larger amount due to the compounding…

Q: End of Year 1 2 3 4 5 6 7 8 A $13,000 13,000 13,000 13,000 13,000 Investment B $13,000 13,000 13,000…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: After consulting with your financial advisor, you figured that you need $9,000 per year for your…

A: Value of annuity is the present value of payments from the annuity based on the interest rate and…

Q: Vang Enterprises, which is debt-free and finances only with equity from retained earnings, is…

A: Given information,Risk free rate: Market risk: Beta: To derive, capital budget

Q: You use a one-stage DDM to value a typical mature U.S. company. Which of the following estimates of…

A: Companies try to achieve growth in sales and growth in earnings and try to increase the value of…

Q: Kate Berry will not invest unless she can earn at least a(n) 10% return. She is evaluating an…

A: Let the IRR or yield on this investment = iFV=PV∗(1+i)twhereFV = Future value = $4400PV = Present…

Q: Mr. Johnson wants to buy an annuity due that will provide him with income of $50,000 per year for…

A: Given information,Payment per period: Time:  yearsInterest rate: To calculate,Present value of…

Q: Current Stock Price​ ($) Stock Price in One Year​ ($) Return R Probability PR   ​$35 ​40% ​25% ​$25…

A: Current Stock Price ($)Stock Price in One Year ($)Return (R )Probability…

Q: a. Calculate the profitability index for each investment. (Do not round intermediate calculations…

A: In capital budgeting we look at the different projects in which a company can invest in. To…

Q: The Gecko Company and the Gordon Company are two firms that have the same business risk but…

A: pretax required return on Gordin's stock can be calculated by using equation below.Pretax return on…

Q: Given the information below for Seger Corporation, compute the expected share price at the end of…

A: Years201420152016201720182019Price100.50106.40105.10102.10124.10139.50EPS2.653.364.164.867.508.50CFP…

Q: your client purchased 100 shares od a security for $20 per share. at the end of year one she…

A: To calculate the time-weighted average return of the security, we can break down the investment into…

Cash Flow Statement Analysis

A company's cash flow is the movement of its cash inflows and cash outflows. A cash flow statement is prepared to determine changes in an organization's cash position. A cash flow statement shows how much money was generated and spent on the business during the fiscal year. The cash flow analysis is a method of analyzing an organization's investing, financing, and operating activities. A cash flow statement reveals an organization's liquidity and solvency, as well as its ability to change cash flows in the future. It eliminates the other effects of accounting methods by improving the comparability of different organizations' operational performance.