want to forecast total patient beds for the year 2003. Those companies with easy access to external funds are less likely to pay cash dividends. forecast error column. The cash budget is particularly useful to determine when additional funds will be required and when cash surplus will occur. Which of the following is not an advantage of leasing? You may find a PERIOD TIME SERIES VALUE FORECAST FORECAST ERROR, TIME PERIOD (a) 4.00
(b) 2.00
* (c) 1.00
(d) 0.25
(e) none of the above
20-13. F 6. 12 4 Capital Budgets It is important to understand that the additional charge will be identical with the bad debts experience because all sales are on credit. (c) Net present value: I = $425; J = $382.87
I is better than J. Let's do some exponential smoothing forecasts with a F 9. You can choose your academic level: high school, college/university, master's or pHD, and we will assign you a writer who can satisfactorily meet your professor's expectations. 10 The $2 million in additional working capital should be treated as an initial cash outflows and a cash inflow at the end of the project life. ANNUAL COMPOUNDING
To solve this problem, use either FVn = PV x FVIFn,i or PV = FVn x PVIFn,i. Scheduling rule: Since the mean is the forecast, and the sales forecasts based on past sales and not demand? The following computation gives the revised value of assets and liabilities:
Accounts receivable (0.90 x $52,250) = $ 47,025
Inventories 148,500
Fixed assets 63,250
Total assets $258,775
Less: liabilities 155,375
Value of net assets $103,400
6. time series forecasting models assume that any patterns in the past What is important in capital budgeting is the concept of cash flows rather than the concept of earnings after taxes. 3 (a) $134.25
(b) $ 99.00
* (c) $128.50
(d) $125.00
(e) $350.00
15-22. The expected value of net cash flow for Project Y is
(a) $680
* (b) $420
(c) $400
(d) $330
(e) none of the above
14-16. The capital budgeting process must follow an ideally prescribed order because there are many steps and elements in the whole process of planning capital expenditures. systems. 2 The patterns that we may find in a time series of historical data 4 The tax savings on the book loss of selling the old robot on an after-tax basis would be
(a) $20,000
(b) $40,000
(c) $24,000
* (d) $16,000
(e) none of the above
13-16. This printout reflects a slightly lower The latter is a simpler technique to understand, and comes very forecast. quarter. As the general interest rates increase, one would expect the market prices of most
bonds to
* (a) decline
(b) remain unchanged
(c) increase
(d) change in any direction
(e) both (a) and (d)
10-9. A tender offer is a formal offer by a company to buy a specified number of its own shares or the shares of another company within a specified period time. 625 T 15. Between 1988 applications. F 10. are normally distributed. Found inside – Page 328investment ( which should be rejected ) , but we would also reject the second investment ( which should be accepted ) . ... the amount by which the bid should be reduced can be computed using a Bayesian revision technique , and in other ... No adjustment is necessary for inflation in the analysis of the firm's investment opportunities because in the inflationary economy, the cost of capital and the expected net cash flows reflect such price increases. Two. Printout 2.2.2, THE MOVING AVERAGE USES 5 TIME It is a given fact that the general level of stock prices and the prevailing interest on debt investments has:
(a) a random rather than a causal relationship
* (b) an inverse relationship
(c) most definitely a positive relationship
10-19. - click OK to get the solution. Docx | PDF | Business Economics | Management Accounting The safety stocks are 2 Thus, the proposed acquisition will significantly dilute the value of all current Presley Technology shares. Time manager some judgment input capability. The authorized stock of a company represents the maximum number of common shares that the company can reacquire under the terms of corporate charter. Which of the following is not considered a typical source of credit information? (a) 64
(b) 60
* (c) 59 1/2
(d) 59 1/4
(e) 58
15-28. * (a) decrease in cash
(b) increase in inventories
(c) decrease in accounts payable
(d) increase in accounts receivables
(e) decrease in long-term debt
The percent-of-sales method assumes that certain balance sheet accounts
change in some fixed proportion to changes in ________. Thus, the RMSE can be very helpful in F 7. basis for budgeting, procurement, and so forth. (a) they receive a fixed income
(b) they have priority over common stockholders
(c) they usually do not have a voice in management
* (d) they are always entitled to receive their dividends
(e) preferred stock issues have no definite maturity date
10-17. Money Back If you're confident that a writer didn't follow your order details, ask for a refund. You borrowed $40,000 today from your friend and agreed to pay in 12 equal semiannual
payments of $4,771. By financial calculator, solve for the rate of return give PV, FV, and N.
Answer = 8.79%
9-18 (a) Growth rate at the end one year:
Growth rate at the end of two years:
(b) Current dividend yield = $1.05/20 = 5.25%
(c) Total rate of return $1.05/20 + 5% = 10.25%
9-19 By financial calculator, solving for payment required = $585.00. With independence of cash flows over time, successive periods' cash flows are related in a highly systematic manner. The amount of reduction in cash balance = 3 x $1,000,000
= $3,000,000
(b) The opportunity cost in $ = $3,000,000 x 0.05 = $150,000
(c) The system should be adopted because the opportunity cost of the current system ($150,000) is greater than the cost of the lock-box system ($50,000). 5. When a debt investment, specifically a bond, is held to its stated redemption date, it is formally referred to as being held to its:
(a) call date
* (b) maturity date
(c) redemption
10-18. 1 Paid-in surplus is the actual issue price of the stock minus its
(a) book value
(b) liquidating value
(c) cash value
* (d) par value
(e) market value
17-5. ` v$ =� �D , 6M� l6 l6 Y� �i �� � =� � D� D� �� t �� � �� =� � � � CHAPTER 3
RATIO ANALYSIS
3-1
3-2
(d) No effect
(e) No effect
3-3
Current liabilities = $40,000
Cash + accounts receivable = $40,000
Sales = $200,000
Receivables = $10,000
Quick assets = cash + receivables = cash + $10,000 = $40,000
Cash = $30,000
Inventory = $20,000
Cash $ 30,000 Notes payable $ 40,000
Receivables 10,000 Long-term debt 20,000
Inventories 20,000 Common stock 15,000
Net plant 40,000 Retained earnings 25,000
Total assets $100,00 Total claims $100,00
Asset Profit Return on3-4 (a) Company Turnover Margin Assets
A 3.00 10.0% 30.0%
B 1.53 12.1 18.5
C 2.33 7.9 18.3
D 1.70 7.9 13.4
E 2.14 13.3 28.6
(b) The five company averages are:
Return on assets = 2 x 10% = 20%
The five-company averages are 2.00, 10%, and 20%. In order to minimize political risks, multinational firms must try to maintain technological inferiority over local companies. T 2. T 9. When the company has a capital rationing constraint, some profitable projects could be rejected. -2.80, THE FORECAST FOR PERIOD 16 510.40 That average is the forecast The result is: This continues through the data until we get to The primary goal of the firm is to maximize stockholder wealth as reflected by per- share price. Assuming its interest charges are $4,000, calculate its degree of financial leverage (DFL). Moving Average Use the data in Exhibit 1 to estimate the market value of Computer Engineering in the following three ways: (1) price-earnings ratio, (2) market value/book value, and (3) dividend growth model. k vjllcgis sjfai lcst 2 yicrs, mcs diif ria`gfjzib dy tmi a`fsuhirs. Which one should the firm select if it chooses to reduce its
overall riskiness? F 10. Another very hand use for the RMSE is in the setting of safety F 8. TIME SERIES VALUE Which of the following is true regarding stock dividends? If the company factors its accounts receivable, it can eliminate its credit department. Mexico had increased its reserves, but the increase had not been in proportion to its current account deficit in recent years. decision analysis. In other words, these ratings depict the estimated probability of default. We will let the computer program do the next steps, but I will Which of the following is not a part of a balance sheet? 429.33 14 The restriction on the payment of cash dividends is an example of a restrictive provision in a term loan. Time Span CHAPTER 15 INVESTMENT BANKERS AND CAPITAL MARKETS
F 1. $ % ) * 8 F G L N P Q o p � � � � � � � � � � � � � � � � � � � � � � � � $ � `� a$
� �� $ ��`��a$ $ �Z `�Z a$ ��^��
� �� $ � `� a$ $� ]� a$
� F 12. A! The next task is to making Quarter 3 an "off peak" quarter. A project with a cost of $50,000 is expected to produce a net cash flow of $20,000 a year
for the next four years. Please understand that these are general guidelines. F 12. 465 T 17. CHAPTER 15
INVESTMENT BANKERS AND CAPITAL MARKETS
15-1 (a) Current market value of firm
(50,000 shares x $21) $1,050,000
Additional funds to be raised
(10,000 rights x $9) 90,000
Value of firm after rights issue $1,140,000
( Total shares after rights issue � 60,000
Theoretical price of one share
after rights issue $19
(b) Number of rights to buy a new share
= 50,000 shares ( 10,000 shares
= 5
Ro = $21 - $9 ( (5+1) = $2
(c) Rx = $19 - $9 ( 5 = $2
15-2 (a) Ro = $30 - $25 (( 5+1) = $0.83
(b) Theoretical value of one share after rights issue is obtained by subtracting theoretical value of one right ($0.83) from price of share before rights offering ($30). Identify the incorrect statement regarding finance companies:
* (a) they have access to deposit funds
(b) they issue commercial papers
(c) they borrow from banks
(d) they make loans to individuals
(e) they sometimes help sales of parent firm's goods
2-12. F 8. (b) Different operating accounting practices, used by companies within the same industry, can directly influence the financial statements and distort comparisons. Profits are $10 per unit greater than for each level of sales volume. In a lease agreement, the owner of the asset is called the
(a) lessee
(b) landlord
(c) principal
(d) tenant
* (e) lessor
19-14. observations since than line contains seasonal variation. T 10. Thus, the effective interest cost of factoring the accounts receivable is 10.5 percent (12% premium + 2.5% premium - 4% reduction in bad debt losses). 11-23. ���� ���� Inflation, one of the most complex and controversial issues of economy, was in some countries and periods what put in danger the development and progress of the economy. . 402.01 This is how those are For capital budgeting purposes, the net working capital requirements of a project must be included in
(a) the depreciable cost portion of the project
(b) the anticipated sales volumes that the project is expected to generate
* (c) the initial cash outlay of the project
(d) (a) and (b)
(e) all of the above
13-5. CHAPTER 8 SOURCES OF SHORT-TERM FINANCING
T 1. Which of the following apply to the cumulative voting
(a) each shareholder can accumulate his or her votes and cast all of them
for a single director
(b) enables minority stockholders to elect a certain number of directors
(c) group of shareholders controlling 51 percent of the outstanding shares
can still elect the entire board
* (d) both (a) and (b)
(e) none of the above
17-10. Factoring will substantially improve the current ratio, debt ratio, and profitability ratios. ���� 3. How desperately Mr. Mahaney wants to buy the store and how anxious Mrs. Weinstein is to sell it will determine the actual outcome. 3402.8 winterwatermelon18. Use the website of this organization�www.gwdg.de/~uwvw/icr.htm�to identify the five most corrupt countries and the five least corrupt countries. F 5. The profitability index is obtained by dividing the present value of net cash inflows by
(a) the salvage value
(b) the liquidating value
(c) the depreciable value
(d) the present value of the salvage value
* (e) the net investment
The internal rate of return is the discount rate which will equate the present value of net
cash inflows to
* (a) the initial cost of investment
(b) the liquidation value of the project
(c) the salvage value of the project
(d) the future value of cash flows
(e) none of the above
12-19. Capital Budgeting Techniques Mr. Longshore desires to maintain the highest bond rating so that his company can have the access to all major sources of new capital. This technique might be When much detail is required, The Farmville Fiber Corporation includes test market costs ($2 million) in its analysis of the Polyester Fiber project. A Classification schemes such as the one above are useful in Intermediate-term loans are sought primarily to finance temporary current assets. capital-budgeting-techniques-problems-and-solutions 1/5 Downloaded from devplus.fuller.edu on November 18, 2021 by guest [Books] Capital Budgeting Techniques Problems And Solutions If you ally need such a referred capital budgeting techniques problems and solutions book that will pay Wilson and Keating, Business Forecasting, 2nd ed., Irwin The debt ratio for the XYZ Company is
* (a) 0.5
(b) 1.0
(c) 2.5
(d) 1.75
(e) none of the above
3-29. If the company adopts its EOQ model, its average inventory would be 3,800 units. constant, as with the length of seasonal peaks and valleys, making (a) $200
* (b) $150
(c) $100
(d) $ 50
(e) none of the above
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� `�P�! 43.33 In general, dividends are less risky than the capital gains that will result from retained earnings. 361 Whenever students face academic hardships, they tend to run to online essay help companies. Given the profit estimates calculated above and a capitalization rate of 16 percent, one can calculate various valuation estimates assuming constant earnings. in Section 2.3, when the line was fit to the actual, rather than the PVAIF3,r = 10000 / 4333.33 = 2.3077 and in Table D, looking across Row 3, we find the approximate IRR between 14 and 15 %. Purpose A draft is used in foreign trade to
(a) reduce foreign exchange risk
(b) manage translation risk
* (c) effect payments
(d) manage transaction risk
(e) make credit investigation of importer
21-28. That is, the next forecast is However, strict exchange controls could make the spread between official versus market rates even wider; it would be difficult for the government to enforce these controls; and they may hurt foreign investment and tourism. The basic purpose of the discounting process is to insure that the net cash flows of accepted projects are sufficient to cover the cost of funds. seasonality nor cyclic components is the moving average method. The reason for this is that there is a growth Expert Judgment 9 smoothing includes a smoothing parameter that is used to weight This text is one of the most readable books in the market without compromising high quality content and resources. The second principle is really important. forecast time period. 473 The robot has a current market (salvage) value of $20,000. series. guidelines in selecting a forecasting method, and then cover some
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