Homework Help for Finance

Your firm needs to raise $100 million in funds. You can borrow short-term at a spread of 1% over LIBOR. Alternatively, you can issue 10-year, fixed-rate bonds at a spread of 2.50% over 10-year treasuries, which currently yield 7.60%. Current 10-year interest rate swaps are quoted at LIBOR versus the 8% fixed rate. Management believes that the firm is currently underrated and that its credit rating is likely to improve in the next year or two. Nevertheless, the managers are not comfortable with the interest rate risk associated with using short-term debt. a) Suggest a strategy for borrowing the $100 million. What is your effective borrowing rate? b) Suppose the firm’s credit rating does improve 3 years later. It can now borrow at a spread of 0.50% over treasuries, which now yield 9.10% for a 7-year maturity. Also, 7-year interest rate swaps are quoted at LIBOR versus 9.50%. How would you lock in your new credit quality for the next 7 years? What is your effective borrowing rate now?

A 8 year old fell while on vacation in another state with his family he was seen in a walk in medical center charges were $85 the Dr. ordered a x-ray charges were $120 and a cast was applied charges were 165. His parents have an annual deductible of $500 for out-of-network charges as well as coinsurance of 80-20. What is the total amount his parents has to pay?

Which of the following statements is false?

When the market risk of the project is similar to the average market risk of the firm's investments, then its cost of capital is equivalent to the cost of capital for a portfolio of all of the firm's securities; that is, the project's cost of capital is equal to the firm’s weighted average cost of capital (WACC).

All of the statements are corrects

A project's cost of capital depends on its risk.

The WACC incorporates the benefit of the interest tax shield by using the firm's before-tax cost of capital for debt.

Because the WACC incorporates the tax savings from debt, we can compute the levered value of an investment, which is its value including the benefit of interest tax shields given the firm's leverage policy, by discounting its future free cash flow using the WACC.

English essentials on business communications

how to do outline on administrative assistant duties Your Task: Now it’s your turn to introduce the duties you perform or (performed) in a current or a pst job, volunteer activity, or internship in a brief, simple, yet well-designed outline. From the outline a presentation will be prepared to inform your audience of your job duties in a three- to-five minute talk/video. Step 2 -- Develop an outline responding to the following questions a. State your name and course name b. Identify the duties of a current position or a past job, volunteer activity, or internship (Outline Level 1) c. Explain the duties of a current position or a past job, volunteer activity, or internship (Outline Level 2)

Your firm wishes to determine whether or not to extend credit to a customer who has ordered 100 boxes of product from your firm that you sell for $23 a box and which costs the firm $17 per box. Which of the following comes closest to the probability of paying that would make the firm indifferent to handing out the credit? Assume that the customer will make only one order.

A. 7.0%

B. 10.0%

C. 23.4%

D. 30.0%

E. 73.9%

Explain why corporate management has become increasingly sensitive to the desires of large institutional investors

Achieving a lower inventory balance through working capital management can result in savings from both carrying costs and losses associated with obsolete inventory. True or false?

Discuss examples of successful and unsuccessful international mergers and acquisitions. What factors made each case successful or unsuccessful? Was there expected synergy? Did synergy materialize?

Primus is a firm of consultants that focuses on process reengineering and quality improvement initiatives. Northwood industries have asked Primus to conduct a study aimed at improving on- time delivery. Normal practice for Primus is to bill for consultant time at standard rates plus actual travel cost and estimated overhead. However, Northwood has offer a flat $70,000 for the job. Currently, Primus has excess capacity so it can take on the Northwood job without turning other business and without hiring additional staff. If normal practices were followed, the bill would be: Classification Hours Rate Amount Partner 90 $260 $23,400 Senior consultant 125 $160 20,000 Staff consultant 60 $ 90 14,400 Travel costs 18,000 Overhead at $30 per non-partner hour 8,500 Total $84,350 Overhead (computer cost, rent, utilities, paper, copying etc.) is determined at the start of the year by dividing estimated annual overhead cost ($2,400,000) by total estimated non-partner hours (80,000 hours). Approximately 20 percent of the total amount is variable costs. All Primus employees receive a fixed wage (i.e., there is no compensation for overtime). Annual compensation in the previous year amounted to the following: Per Hour Partner $250 Senior consultant $150 Staff consultant $ 80 Required What will be the effect on company profit related to accepting the Northwood Industries job? What qualitative factors should be considered in the decision whether to accept the job or not?

Lisa is considering making a 6-year loan of $15,000 to Carmax Inc. To repay Lisa, Carmax will pay $500 at the end of Year 1, $2,000 at the end of Year 2, and $2,500 at the end of Year 3, plus a fixed but currently unspecified cash flow, Y, at the end of Years 4 through 6. Lisa regards 10% compounding annually as a rate of return for Carmax. What cash flow must the investment provide at the end of each of the final 3 years, that is, what is Y? (4 points) Hints: Draw a time line. Then, recall the simple formula: 15,000 is the loan that Carmax receives today. It equals to the present values of all the future cash flows. But hard to solve for Y in this way, so we use PVA as an alternative. Starting the end of the fourth period, the beginning of the fifth year, you pay equal amount of Y for four times, so it is an annuity due problem, so you can assume PVA at point 4 can be calculated from the four payments with amount of X.

if you want to buy 20,000 stocks at $10 on share but you wanted to only invest $12,000 AND you would borrow $8000 from the broker then the margin would be equal to? Assume that you sold the above shares after at $12 per share then your return would be? (show work please)

Identify a merger/acquisition that has been completed within the past 10 years. What has been reported or suggested as the basis of the merger? What is your assessment regarding degree of success? To what do you attribute the success or failure?

You and two friends, Pat and Ron, have decided to form a new business, running a restaurant. Your friends, pat and Ron, bring the following to the business: Pat is something of an entrepreneur. He has several ventures and ready access to financing for your business. Because of his varied interests, however, he doesn’t want to be an employee of the business. He does, however, want to have some input into the management of the business. Ron has a full time job, which she is willing to leave to make a full time commitment to running this restaurant. She has limited funds available and hopes to develop “sweat equity” in the restaurant through her work effort. She is a skilled chef who will manage the kitchen and the food production. You are the “idea person”. You have conceived of this enterprise, and are charged with getting everything lined up. You will be involved in the day-to-day running of things, and will be the manager of the business side of the restaurant.

II. Having chosen the form of business, you also need to arrange financing to obtain all of the kitchen equipment, dining room equipment, stock the bar, purchase food, pay rent, get operating capital for the first two months of operation, and a million other details. A arranges through his sources to get financing. The lender requires that you do whatever is necessary to minimize his risk and each of the three of you to be responsible for the loan. Include all of the forms of financing and lending that we have discussed in this case. What are the options, which ones are best, and how do they work?