Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem 1: Swann Systems has forecast this income statement for the forthcoming year:

  • Sales $5,000,000
  • Operating costs (excluding depr and amort) 3,000,000
  • EBITDA $2,000,000
  • Depreciation and amortization 500,000
  • EBIT $1,500,000
  • Interest 500,000
  • EBT $1,000,000
  • Taxes (40%) 400,000
  • Net income $ 600,000

The company's president is not satisfied with the forecast and wants to see higher sales and a forecasted total income of $2,000,000.

Suppose that operating costs are always 60% of sales and that depreciation and amortization, interest expense and the company's tax rate (40%) will remain similar even if sales change. How many in sales would Swann have to obtain to produce $2,000,000 in net income?

a) $ 5,800,000
b) $ 6,000,000
c) $ 7,200,000
d) $ 8,300,000
e) $10,833,333

problem 2: A real estate investment has the given expected cash flows:

Year    Cash Flows
 1           $10,000
 2           25,000
 3           50,000
 4           35,000

If the discount rate is 8%, determine the investment's present value?

a) $103,799
b) $ 96,110
c) $ 95,353
d) $120,000
e) $ 77,592

problem 3: An investment pays $100 every six months (semi-annually) over the next 2.5 years. Interest, though, is compounded quarterly, at a nominal rate of 8%. Determine the future value of the investment after 2.5 years?

a) $520.61
b) $541.63
c) $542.07
d) $543.98
e) $547.49

problem 4: The Wilson Corporation has the given results:

  • Sales/Total assets 2.0×
  • Return on assets (ROA) 4.0%
  • Return on equity (ROE) 6.0%

Determine the Wilson's profit margin and debt ratio?

a) 2%; 0.33
b) 4%; 0.33
c) 4%; 0.67
d) 2%; 0.67
e) 4%; 0.50

problem 5: Cleveland Corporation consists of 100,000 shares of common stock outstanding, its total income is $750,000, and its P/E is 8. Determine the company's stock price?

a) $20.00
b) $30.00
c) $40.00
d) $50.00
e) $60.00

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M97085

Have any Question? 


Related Questions in Basic Finance

Discussion lets discuss the following based on the assigned

Discussion: Let's discuss the following (based on the assigned and recommneded reading): 1. Is Paying a Premium for Certain Securities Worth the Price? Are portfolio managers willing to pay a premium for securities that ...

1 devise a local search heuristic for the service network

1. Devise a local search heuristic for the service network design problem in which an individual move is to remove an existing arc or to add a new arc to the current solution. 2. Show that the deterministic VAP with mult ...

What are the three ways in which derivatives can be misused

What are the three ways in which derivatives can be misused? Contrast dollar return and percentage return. Be sure to identify which return is more useful when comparing investments? Compare and contrast options and forw ...

1 why review the disclosure of allowance for loan losses

1. Why review the disclosure of allowance for loan losses for a bank? 2. Why review the disclosure of nonperforming assets for banks? 3. Why could a review of savings deposit balances be important when reviewing a bank's ...

Gruber corp pays a constant 740 dividend on its stock the

Gruber Corp. pays a constant $7.40 dividend on its stock. The company will maintain this dividend for the next 8 years and will then cease paying dividends forever. The required return on this stock is 12 percent. What i ...

The first four questions are true and false1 in order to

The first four questions are true and false 1. In order to tell the impact of a change in a constraint coefficient, the change must be made and then the model resolved. 2. Any change to the objective function coefficient ...

1 discuss some of the major issues to consider when

1. Discuss some of the major issues to consider when choosing between an active or passive exporting strategy. 2. You work for a small company that has an innovative low-cost production method for high-capacity jump driv ...

The following is from a business report by the reuters news

The following is from a business report by the Reuters news agency: "Online retailer Overstock.com . . . posted a surprise quarterly profit and its shares jumped as much as 34 percent to their highest level in almost two ...

1 modify the eoq formula for the case where the holding

1. Modify the EOQ formula for the case where the holding cost is a concave function of the number of items kept in inventory. 2. Devise an optimal inventory policy for the EOQ model with a finite time horizon TH . 3. Dra ...

Imagine that your town or city has increased its nighttime

Imagine that your town or city has increased its nighttime police patrols to reduce crime. Design two quasi-experiments to determine whether this intervention has been effective, one that uses some variation of a nonequi ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen