Homework Help for Finance

Dante Co. wishes to maintain a growth rate of 10.8 percent a year, a debt–equity ratio of 1.2, and a dividend payout ratio of 28 percent. The ratio of total assets to sales is constant at .84. What profit margin must the firm achieve?

The Hamilton Company has a variable operating cost ratio of 60%; its cost of capital is 12% and current sales are $20,000. All of its sales are on credit and it currently sells on terms of net 30. Its accounts receivable balance is $3,000 on average. Hamilton is considering a new credit policy with terms of net 45. Under the new policy, sales will increase to $24,000 and accounts receivable will rise to $5,000. If Hamilton changes its credit policy to net 45, by how much will the cost of carrying receivables increase? [Assume a 360 day year].

The discount rate used by the watershed district on its projects is 3.5%.

You have developed a sixth alternative (project F). The investment requirement for this project is the same as A ($100,000), its NPV is $90,000, and its IRR is 8%. Your manager informs you that you are only allowed to invest in project A or F (not both), which have project lives of 5 and 15 years, respectively. Neither project is divisible, but you are allowed to reinvest in project A more than once (i.e., the ARR ≠reinvestment rate).

Your answer includes two parts. First part: What project should you invest in? Second part: How many times should you invest in the project? So you should select two answers from the choices below.

Vinson Corporation: Current Scenario: Credit terms = 90 days Credit Sales = $2.5 Million Average collection period = 95 days Variable Cost ratio = 85%; Taxes are 40% and the interest rate on investment funds = 18% Industry-wide standards hold credit terms at 30 days and Vinson believes that they can maintain 35 Days sales outstanding. Annual sales will drop to $2,375,000; will the savings on the investment in A/R cover the loss in profit on sales?

Southern Mfg., Inc., is currently operating at only 85 percent of fixed asset capacity. Current sales are $600,000. Fixed assets are $450,000 and sales are projected to grow to $790,000. How much in new fixed assets are required to support this growth in sales? Assume the company wants to operate at full capacity. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

New fixed assets $

Problem 8-10
CAPM and required return

Beale Manufacturing Company has a beta of 1.3, and Foley Industries has a beta of 0.95. The required return on an index fund that holds the entire stock market is 12%. The risk-free rate of interest is 3.75%. By how much does Beale's required return exceed Foley's required return? Round your answer to two decimal places.

The demand curve and supply curve for​ one-year discount bonds with a face value of

​$1,000 are represented by the following​ equations:

Suppose​ that, as a result of monetary policy​ actions, the Federal Reserve sells

90 bonds that it holds. Assume that bond demand and money demand are held constant. Which of the following statements is​ true?

A. If the Fed increases the supply of bonds in the market by 90​, at any given​ price, the bond supply equation will become Price= Quantity + 590.

Your answer is correct.

Calculate the effect on the equilibrium interest rate in this​ market, as a result of the Federal Reserve action.

The expected interest rate on a​ one-year discount bond will

increase to ( ___% ).

​(Round your intermediate calculations to the nearest whole number. Round your final answer to two decimal​ places.)

Suppose a firm makes purchases of $3.65 million per year under terms of 2/10, net 30, and takes discounts. a. What is the average amount of accounts payable net of discounts? (Assume that the $3.65 million of purchase is net of discounts – that is, gross purchases are $3,724,490 and discounts are $74,490). b. Is there a cost of the trade credit the firm uses? c. If the firm did not take discounts but it did pay on the due date, what would be its average payable balance and what would be the cost of this non-free trade credit? d. What would its cost of not taking discounts be if it could stretch its payments to 40 days?

Solar Engines manufactures solar engines for tractor-trailers. Given the fuel savings available, new orders for 175 units have been made by customers requesting credit. The variable cost is $11,200 per unit, and the credit price is $13,750 each. Credit is extended for one period. The required return is 1.7 percent per period. If Solar Engines extends credit, it expects that 35 percent of the customers will be repeat customers and place the same order every period forever and the remaining customers will be one-time orders. Calculate the NPV of the decision to grant credit. (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Compare the current interest rates, costs, and features associated with a 15-year fixed rate mortgage, 30-year fixed rate mortgage, and an adjustable rate mortgage for a home price of $150,000.

Please choose TWO Financial Institutions to research (For example, a Bank and Credit Union). After you have research this information please complete the following table below for each of the institution you selected:

*** I'm having trouble finding the information to fill out this chart. It's driving me crazy trying to find it online. Can anyone help me out with this? Thanks.

Solar Engines manufactures solar engines for tractor-trailers. Given the fuel savings available, new orders for 100 units have been made by customers requesting credit. The variable cost is $8,200 per unit, and the credit price is $10,000 each. Credit is extended for one period. The required return is 1.1 percent per period and the probability of default is 10 percent. Assume the number of repeat customers is affected by the defaults. In other words, 25 percent of the customers who do not default are expected to be repeat customers. Calculate the NPV of the decision to grant credit. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

First National Bank of Peoria has just met with the Treasurer at the Hazelton Corporation. Unfortunately the loan officer has informed the Treasurer that they cannot offer the usual line of credit to the company since the bank does not have available lending capacity. Hazelton’s Treasurer would like to use trade credit to provide funds for the seasonal working capital needs. They are going to borrow the funds from their primary supplier who offers the following terms: 3/15 net 30. Hazelton plans to pay the supplier in 30 days. What is the effective annual rate of using trade credit? Does Hazelton have any alternative sources of financing available to them?

CAPM and portfolio return You have been managing a $5 million portfolio that has a beta of 1.55 and a required rate of return of 12%. The current risk-free rate is 5.00%. Assume that you receive another $500,000. If you invest the money in a stock with a beta of 1.30, what will be the required return on your $5.5 million portfolio? Do not round intermediate calculations. Round your answer to two decimal places.

1.

A-$133,498.20

B-$120,842.20

C-$119,621.80

D-$123,848.00

2.

A-$495,000

B-$630,000

C-$135,000

D-$691,000