Capital Budgeting Techniques
Gardial Fisheries is considering two mutually exclusive investments. The projects' expected net cash
flows are as follows:
Expected Net Cash Flows
Project A Project B
Damon Corporation, a sports equipment manufacturer, has a machine currently in use that was originally purchased 3 years ag
The firm depreciates the machine under MACRS using a 5-year recovery period.
Once removal and clenaup costs are taken into consider
Study Guide for Final Exam
1. Distinguish between Eurobond and foreign bond.
2. Specify the liquidity preference theory and expectation theory of the term structure of interest
3. Specify the condition that a callable bond issuer would likely to re
September 23rd, 2016
Stock-Trak Project Investment Statement
Zac Brown, Trent Youngdahl, Sam Forthun
Perception of the Market.
Our group has chosen a moderately-pessimistic stance on the market until December due
to multiple factors that we believe will a
Go to the next tab where you will find a spreadsheet containing rate of return data over 145 months for Google,
the T-bill rate, and the S&P 500.
a. Use this data and Excels regression function to compute Googles excess return each period as well as its
Zac B, Trent Y, and Sam F
12/23/15 After Split: 12/23/15
Recalculate the intrinsic value of GE using the three-stage growth model of Spreadsheet 13.1 Treat each scen
a. ROE in the constant growth period will be 10%.
b. GEs actual beta is 1.10.
c. The market risk premium is 9%.
Hedging Strategies Using Futures
In the Chicago Board of Trades corn futures contract, the following delivery months are
available: March, May, July, September, and December. State the contract that should be
US v Oracle
On June 6th, 2003, Oracle Corporation made a cash tender offer for all of the outstanding
shares of a fellow competitor, PeopleSoft Inc. Both companies are enterprise software firms that
develop, manufacture, market
Final Take-home exam
Leegin is a privately owned manufacturer of womens fashion accessories based in City
of Industry California. The companys flagship brand, Brighton, was launched in 1991 with a
collection of belts. In subseque
E/M 386 Final: Chapters 13, 16-18, and 20-21
1. Explain the differences between Per Se and rule of reason approaches to antitrust law.
What is the logic behind the differing approaches? What are the benefits and costs? Do
Per Se rules make as much sense f
ANTI-TRUST Cases Test #2
Standard Oil 1911: Background: Controlled an estimated 90% of the petroleum market, Used its buying power to
extract concessions from local refineries and input suppliers which gave them a competitive advantage not shared by
1914 case involving retail lumber dealers who resented having to compete with some of
their wholesale suppliers for retail sales. Decided to circulate among all retailers a list of
wholesalers who had engaged in dual distribution.
Vertical territorial Restrictions:
GTE-Sylvania vs. Continental TV(1977): Background: Franchise agreements between
manufacturers and retailers frequently include provisions barring the retailers from selling
franchised products from locations other than t
Government and Business
Review Outline for Exam #2
The exam covers chapters 8-11 in Blair and Kaserman (with passing reference to material from earlier exams), all
assigned cases in the Moodle case packs and the text, and all mater
Government and Business
Review Outline for Exam #2
The exam covers chapters 4, 6, 7 and 12 (very light on 5) in Blair and Kaserman, with references back to the first three
chapters. In addition, you will be responsible for all assi
E/M 110 Financial Accounting
Choose the best answer for each of the following questions and insert the identifying letter in the
The basic purpose of accounting is to:
Provide financial inf
1. Explain the Keynesian theory of money demand. What motives did Keynes think
determined money demand? What are the two reasons why Keynes thought velocity
could not be treated as a constant?
(Liquidity Preference Theory) Three Motives:
1) Explain the effect of open market purchase on federal fund rate and equilibrium reserve using
diagram (use both cases).
Open Market Purchase will cause the IFF and equilibrium to fall. (Ex. Pg 359 and notes)
Open Market Sail will cause the
1) Explain the process of open market purchase from a Bank by $200 million on Banking
systems T-accounts, FEDs T-accounts, monetary base and money supply.
1. Fed buys 200 m of bonds from bank
2. Bank cashes check with Fed or cashes it in for cu
1. What is the present value of the cash flow of $600 after two years with rate of interest 8%?
600/ (1.08)^2 = $514.40
2. Suppose you buy a bond with $27 and get $216 after three years. What is the rate of interest on this
1. Describe the relationship of inflation, real rate of interest and FEDs monetary policy to draw the
monetary policy curve.
Because the government is constantly trying to stabilize inflation, they follow the Taylor Principle
where they raise n
1. Draw AD curve. Explain why the slope of AD curve is negative.
AGGREGATE DEMAND: consumption expenditure + planned investment spending +
government purchases + net exports (C+I+G+NX).
It is downward sloping because if Inflation rises, the gov
1. For each of the following shocks, describe how monetary policy makers would respond (if at all)
to stabilize economic activity. Assume the economy starts at a long run equilibrium.
a. Consumers reduce autonomous consumption.
No Policy Change
1. Suppose, FED sells 100 Euro in the foreign exchange market. How does it affect the FEDs Taccount? How does it affect the foreign exchange rate (Discuss both sterilized and unsterilized
foreign exchange intervention) and money supply?