Chapter 13 Problem 1
EBIT and Leverage. Kaelea, Inc., has no debt outstanding and a total market value of $125,000.
Earnings before interest and taxes, EBIT, are projected to be $10,400 if economic conditions are
normal. If there is strong expansion in th
Allisa Davis-Grimes
BUSN379
Week 5
Professor Felsberg
4. Portfolio Expected Return. You have $10,000 to invest in a stock portfolio. Your choices are
Stock X with an expected return of 14 percent and Stock Y with an expected return of 11 percent.
If your
CHAPTER 12
Allisa Davis-Grimes
BUSN379
Week 6
Professor Felsberg
3. Calculating Cost of Equity. Stock in CDB Industries has a beta of .90. The market risk premium is 7
percent, and T-bills are currently yielding 3.5 percent. CDBs most recent dividend was
Allisa Davis-Grimes
Week 7
BUSN379
Professor Felsberg
6. Calculating Net Float. Each business day, on average, a company writes checks totaling $19,500 to pay
its suppliers. The usual clearing time for the checks is four days. Meanwhile, the company is re
Allisa Davis-Grimes
BUSN379
Professor Felsburg
Week 4
Chapter 4 Case Assignment
1. What are the monthly payments for a 30-year traditional mortgage? What are the payments for a
20-year traditional mortgage?
In order to see what the monthly payments of a 3
Allisa Davis-Grimes
BUSN379
Week 5
Professor Felsberg
4. Portfolio Expected Return. You have $10,000 to invest in a stock portfolio. Your choices are
Stock X with an expected return of 14 percent and Stock Y with an expected return of 11 percent.
If your
Allisa Davis-Grimes
BUSN379
Week 6
Professor Felsberg
CASE ASSIGNMENT WEEK 6
1. Construct a spreadsheet to calculate the payback period, internal rate of return, modified
internal rate of return, and net present value of the proposed mine.
2. Based on you
Allisa Davis-Grimes
BUSN 379
Week 4 Assignment
Professor Felsberg
3. Calculating Payback. Global Toys Inc., imposes a payback cutoff of three years for its
international investment projects. If the company has the following two projects available,
should
ALLISA DAVIS-GRIMES
BUSN379
WEEK 2 ASSIGNMENT
PROFESSOR FELSBERG
CHAPTER 4 (8, 17, 18)
8. Calculating the Number of Periods. Calculating Rates of Return. In 2011, an 1880-O Morgan silver
dollar sold for $13,113. What was the rate of return on this investm
Allisa Davis-Grimes
Week 3 assignment
Professor Felsberg
Chapter 6/ Question 16
16. Interest Rate Risk. Both Bond Bill and Bond Ted have 7 percent coupons, make semiannual payments,
and are priced at par value. Bond Bill has 3 years to maturity, whereas B
Allisa Davis-Grimes
BUSN379
Professor Felsburg
Week 2
Chapter 2 Case
Cash Flows and Financial Statements at Sunset Boards, INC.
1. An Income Statement for 2013 and 2014
SUNSET BOARDS
Income Statements as of December 31, 2013 and 2014
2013
2014
Net Sales
3
Allisa Davis-Grimes
BUSN379
Professor Felsberg
Week 1 Assignment
8.) Calculating OCF. Hammett, Inc., has sales of $34,630, costs of $10,340, depreciation expense of
$2,520, and interest expense of $1,750. If the tax rate is 35 percent, what is the operati