$27 c. By what amount did the company's paid-in capital increase during 20X6? $1,724,000 d. Did Star's total legal capital increase or decrease during 20X6? By what amount? $680,000 increase 2. Bond computations: Straight-line amortization Southlake Corporation issued $900,000 of 8% bonds on March 1, 20X1.
Redo questions a, b, c, and d under these conditions. a. Total revenue | (100x7500) | | $750,000 | Total Var Cost | (25x7500) | | 187,500 | Total contribution margin | | $562,500 | Fixed Costs | | | 500,000 | Profit | | | $62,500 | b. Contribution margin: $75; breakeven point: Contribution margin x Volume=FC $75 x Volume = $500,000 Volume = 6,667 c. ($75 x Volume)-$500,000 = $100,000 $75 x Volume = $600,000 Volume = 8,000 ($75 x Volume)-$500,000 = $200,000 $75 x Volume = $700,000 Volume = 9,333 d. | | | | | | | | | | | | e. Total revenue | (80x7500) | | $600,000 | Total Var Cost | (25x7500) | | 187,500 | Total contribution margin | | $412,500 | Fixed Costs | | | 500,000
If the interest rate is 12% per year, what is the present value of this annuity? a. $1,229.97 b. $496.76 c. $556.38 d. Other 7. Given the following cash flow stream at the end of each year: Year 1: $4,000 Year 2: $2,000 Year 3: 0 Year 4: -$1,000 Using a 10% discount rate, the present value of this cash flow stream is: a.
Calculate the following financial ratios. TIP: If you don't remember how to calculate financial ratios, review the Calculating Financial Ratio pages from Section 9, Lesson 2 of this course. a. A company makes a net profit before tax of $12,000 and has $20,000 in total equity. Calculate the company's return on equity as a percentage.
Medical Associates is a large for-profit group practice. Its dividends are expected to grow at a constant rate of 7% per year into the foreseeable future. The firm’s last dividend (D0) was $2, and its current stock price is $23. The firm’s beta coefficient is 1.6; the rate of return on 20 year T-bonds currently is 9%; the expected rate of return is 13%. The firm’s target capital structure calls for 50% debt financing, the interest rate required on the business’s new debt is 10% and its tax rate of 40%.
Assignment #2: Market Equilibrium and Profit Maximization 3. Suppose the demand curve for a monopolist is QD = 500 – P, and the marginal revenue function is MR = 500 – 2Q. The monopolist has a constant marginal and average total cost of $50 per unit. The demand curve is QD = 500 – P or P = 500 – QD. MR = 500 – 2Q.
FIN- 515: Managerial Finance Homework 2: Chapter 3 Problems: (3-1) Days Sales Outstanding: Greene Sisters has a DSO of 20 days. The company’s average daily sales are $20,000. What is the level of its accounts receivable? Assume there are 365 days in a year. DSO = Receivables / Ave. sales per day Receivables= DSO * Ave. sales per day = 20 * 20,000 Receivables= $400,000 (3-2) Debt Ratio: Vigo Vacations has an equity multiplier of 2.5.
The repayment of the coupon bond will be the par value plus the last coupon payment times the number of bonds issued. So: Coupon bonds repayment = 30,000($1,000+40)) = $31,200,000 The repayment of the zero coupon bond will be the par value times the number of bonds issued, so:Zeroes: repayment = 315,589($1,000+0) = $315,588,822 3. Bond P is a premium bond with a 12 percent coupon. Bond D is a 6 percent coupon bond currently selling at a discount. Both bonds make annual payments, have a YTM of 9 percent, and have five years to maturity.
ALTERNATIVE PROBLEMS AND SOLUTIONS ALTERNATIVE PROBLEMS 11- 1A. (Individual or Component Costs of Capital) Compute the cost for the following sources of Financing: a. A bond that has a $1,000 par value (face value) and a contract or coupon interior rate of 12%. A new issue would have a flotation cost of 6% of the $1,125 market value. The bonds mature in 10 years.