points) Which of the following NOT correct? Independent or non-mutually exclusive alternatives can be accepted at the same time. The modified internal rate of return assumes that inflow are reinvested at 80 percent of the internal rate of return This is a correct answer It is the difference in the reinvestment assumptions that can be significant in determining when to use the present value or internal rate of return methods. Under the net present value method‚ cash flows are assumed
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earn an effective return of 12 per cent per annum on his contributions‚ how much will he have accumulated at the end of twenty years‚ rounded to the nearest dollar? (A) (B) $19‚292 (C) $144‚105 (D) 3. $14‚938 $40‚000 A firm’s profit before tax is $150 000 and depreciation expense is $30‚000. Assuming a company tax rate of 30%‚ the firm’s cash flow from operations is: (A) $840‚000 (B) $180‚000 (C) $135‚000 (D) $75‚000 4. Given an effective annual
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Module 3 – Chapter 12 Problem 12-1A Part 1 KAZAAM COMPANY Statement of Cash Flows For Year Ended December 31‚ 2011 Cash flows from operating activities Net income $73‚750 Adjustments to reconcile net income to net cash provided by operating activities Increase in accounts receivable ($49‚625 - $65‚000) (15‚375) Increase in inventory ($252‚500 - $273‚750) (21‚250) Decrease in prepaid expenses ($6‚250 - $5‚375) 875 Decrease in
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Week 4 – Check Your Understanding: Chapter 7 Exercise 1‚ 6‚ 8‚ and 9 1. In the Deep Creek Mining Company example described in this chapter (Table 7.1)‚ suppose again that labor is the variable input and capital is the fixed input. Specifically‚ assume that the firm owns a piece of equipment having a 500-bhp rating. a. Complete the following table: |LABOR INPUT L (NO. OF WORKERS)|TOTAL PRODUCT TPL (=|MARGINAL PRODUCT MPL |AVAERAGE PRODUCT APL | | |Q)
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PROBLEM SET 4 1) Consider the following utility functions‚ where W is wealth: (a) U (W ) = W 2 1 (b) U (W ) = W (c) U (W ) = −W (d) U (W ) = W (e) U (W ) = ln(W ) (f) U (W ) = W 1−γ ‚ with γ = 2 1−γ How likely are each of these functions to represent actual investor preferences? Why? 2) Suppose investors have preference described by the following utility function with A > 0: U = E(r) − 1 Aσ 2 2 Each investor has to choose between three portfolios with the following characteristics:
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Parity Conditions - Lecture 4 Help to determine if foreign exchange rates are predictable. eliminate risk doing business abroad By parity there means there is some sort of equilibrium or equality. 4 Variables - Outline the Parity Condition Exchange Rates Forward Currencies Inflation rates Interest Rates *Note: If parity conditions are to hold (equality) we must assume that exchange rates are fully floating and there are no capital controls 5 Parity Conditions: Purchasing Power
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2012 Key Version A 1. You are considering the following two mutually exclusive projects. The crossover point is _____ percent. [pic] A. 11.89 B. 13.75 C. 9.25 D. 12.08 E. 7.76 BLOOMS TAXONOMY QUESTION TYPE: APPLICATION LEARNING OBJECTIVE NUMBER: 4 LEVEL OF DIFFICULTY: INTERMEDIATE Ross - Chapter 008 #89 SECTION: 8.4 TOPIC: NPV PROFILE TYPE: PROBLEMS 2. M&A‚ Inc. maintains a constant debt-equity ratio of .4. The firm had net income for the year of $140‚000 and
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solution in Problem #1? a) 10.7 b) 17.3 c) 12.2 d) 15.8 e) 7.0 3. The Ka of acetic acid is 1.8 x 10-5. What is its pKa? a) 1.8 x 10-5 b) 5.18 c) 4.74 d) -4.74 4. What is the pH of a 0.100 M solution of acetic acid? a) 1.34 x 10-3 b) 2.87 c) 1.00 d) 4.74 e) 3.74 5. What is the acetate ion (Ac- or CH3COO-) concentration of the solution in Problem #4? a) exactly zero b) 3.74 M c) 0.100 M d) 1.34 x 10-3 M e) 1.8 x 10-6 M 6. What is the percent ionization of the acetic acid in Problem #4? a) 1.34%
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Hertz purchases the fleet from GM for $325‚000‚ and Hertz is able to issue $200‚000 of five year‚ 8% debt in order to finance the project. All principal will be repaid in one balloon payment at the end of the fifth year. What is the Adjusted Present Value (APV) of the project? 17.1 a. The maximum price that Hertz should be willing to pay for the fleet of cars with all-equity funding is the price that makes the NPV of the transaction equal to zero. NPV = -Purchase Price + PV[(1- TC
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OPIM Assignment 4 1. Cu = 24-11 = $13 Co = 11-7 = $4 Critical ratio = 13/(13+4) = 0.7647 μ = 30‚000 σ = 10‚000 Using normal distribution function (=norminv(0.7647‚30000‚10000))‚ the optimum order quantity is 37‚216 jerseys to maximize profit. 2. Quantity = 32‚000 First‚ we normalize the order quantity to find the z-statistic z=Q-μσ=32‚000-25‚00010‚000=0.7 We then look up the standard normal loss function. The expected lost sale is given by. Lz=0.1429 Therefore‚ the expected lost
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