Projects A and B have identical expected lives and identical initial cash outflows (costs).However, most of one project's cash flows come in the early years, while most of the otherproject's cash flows occur in the later years. The two NPV profiles are given below: a. More of Project B's cash flows occur in the later years. b. We must have information on the cost of capital in order to determine which project has the larger early cash flows. c. The NPV profile graph is inconsistent with the statement made in the problem. d. The crossover rate, i.e., the rate at which Projects A and B have the same NPV, is greater than either project's IRR. e. More of Project A's cash flows occur in the later years.

Galt Industries has no debt, total equity capitalization of $600 million, and an equity beta of 1.2. Included in Galt's assets is $90 million in cash and risk-free securities. Assume the risk-free rate is 4% and the market risk premium is 6%. Galt's asset beta is closest to: А. 1.1 В. 1.2 С. 1.3 D. 1.4

Which of the following statements is CORRECT? а.Capital market instruments include both long-term debt and common stocks. b. An example of a primary market transaction would be your uncle transferring 100shares of WalMart stock to you as a birthday gift. The NYSE does not exist as a physical location; rather, it represents a loosecollection of dealers who trade stocks electronically.c. d. If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction. e. While the two frequently perform similar functions, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise large blocks of capital from investors.

a. What is the relationship between the price of a bond and its YTM? b. Explain why some bonds sell at a premium over par value while other bonds sell at a discount. What do you know about the relationship between the coupon rate and the YTM for premium bonds? What about for discount bonds? For bonds selling atparvalue? c. Dote Plc has 8.5 per cent coupon bonds on the market that have 12 years left to maturity. The bonds make annual payments. The par value of the bond is£1000. If the YTM on these bonds is 7.2 per cent, what is the current bond price? d. Kipi has 8 per cent coupon bonds making annual payments with a YTM of 7.2per cent. The current yield on these bonds is 7.55 per cent. How many years do these bonds have left until they mature? e. Keele has bonds on the market making annual payments, with 12 years to maturity, and selling for €1,045. At this price, the bonds yield 7 per cent. The par value of the bond is €1000. What must the coupon rate be on the bonds?

Rose recently graduated in engineering. Her employer will give her a raise of $6500 per year if she passes the FE exam (Fundamentals of Engineering) (a) Over a career of 45 years, what is the present worth of the raise if the interest rate is 4%? (b) What is the future worth at Year 45? (c) Incentive pay systems can create ethical dilemmas in the workplace. Describe one each from the perspective of the employer and the employee

Which of the following statements is CORRECT? One of the disadvantages of incorporating a business is that the owners then become subject to liabilities in the event the firm goes bankrupt.а. b. Sole proprietorships are subject to more regulations than corporations. In any type of partnership, every partner has the same rights, privileges, and liability exposure as every other partner.c. d. Sole proprietorships and partnerships generally have a tax advantage over many corporations. e. Corporations of all types are:subject to the corporate income tax.

2. Problem 4.23 (Ratio Analysis) eBook Data for Barry Computer Co. and its industry averages follow. The firm's debt is priced at par, so the market value of its debt equals its book value. Since dollars are in thousands, the number of shares is shown in thousands too. Cash Receivables Inventories Barry Computer Company: Balance Sheet as of December 31, 2021 (in thousands) $ 43,470 Accounts payable $ 86,940 239,085 Other current liabilities 94,185 Notes payable to bank 57,960 Total current liabilities $239,085 Long-term debt 217,350 Common equity (26,806.5 shares) 268,065 Total liabilities and equity $724,500 Total current assets Net fixed assets Total assets 217,350 $499,905 224,595 $724,500 Barry Computer Company: Income Statement for Year Ended December 31, 2021 (in thousands) Sales $1,150,000 Cost of goods sold Materials Labor Heat, light, and power Indirect labor Gross profit Selling expenses General and administrative expenses CENGAGE MINDTAP Labor Heat, light, and power Indirect labor Ch 04-End-of-Chapter Problems - Analysis of Financial Statements 322,000 57,500 80,500 Gross profit Selling expenses General and administrative expenses Depreciation Earnings before interest and taxes (EBIT) Interest expense $506,000 322,000 57,500 80,500 966,000 $ 184,000 69,000 34,500 Earnings before taxes (EBT) Federal and state income taxes (25%) Net income 966,000 $ 184,000 69,000 $ $ $ 34,500 34,500 46,000 21,735 24,265 6,066 18,199 L/nPrice per share on December 31, 2021 a. Calculate the indicated ratios for Barry. Do not round intermediate calculations. Round your answers to two decimal places. Ratio Barry Industry Average Current Quick Days sales outstanding Inventory turnover Total assets turnover Profit margin ROA ROE ROIC TIE Debt/Total capital M/B P/E CENGAGE MINDTAP days X % Profit margin Total assets turnover Equity multiplier X % % % % X Ch 04- End-of-Chapter Problems - Analysis of Financial Statements ROIC % TIE Debt/Total capital M/B P/E EV/EBITDA *Calculation is based on a 365-day year. % 12.00 7.40% 2.15x 49.57% 4.20 20.41 9.37 2.02x 1.21x 35 days 5.78x 1.79x 1.48% 2.64% 7.22% 7.40% 2.15x 49.57% 4.20 20.41 b. Construct the DuPont equation for both Barry and the industry. Do not round intermediate calculations. Round your answers to two decimal places. FIRM INDUSTRY 1.48% 1.79x Search this course ● x c. Select the correct option based on Barry's strengths and weaknesses as revealed by your analysis. 1. The firm's days sales outstanding ratio is more than the industry average, indicating that the firm should tighten credit or enforce a more stringent collection policy. The total assets turnover ratio is well above the industry average so sales should be increased, assets increased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios are low compared to the industry- net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in an above average liquidity position and financial leverage is similar to others in the industry. II. The firm's days sales outstanding ratio is comparable to the industry average, indicating that the firm should neither tighten credit nor enforce a more stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets increased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios are low compared to the industry- net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in a below average liquidity position and financial leverage is similar to others in the industry. III. The firm's days sales outstanding ratio is more than twice as long as the industry average, indicating that the firm should tighten credit or enforce a more stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets decreased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capital. Finally, it's market value ratios are also below industry averages. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry. IV. The firm's days sales outstanding ratio is more than twice as long as the industry average, indicating that the firm should loosen credit or apply a less stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets increased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry. V. The firm's days sales outstanding ratio is less than the industry average, indicating that the firm should tighten credit or enforce a more stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets decreased, or both. While the company's profit margin is lower than the industry average, its other profitability ratios are high compared to the industry- net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry. L/nCENGAGE MINDTAP Ch 04- End-of-Chapter Problems - Analysis of Financial Statements Grade it Now 111 IV Save & Continue than the industry average, its other prontacity ratios are low compared to the industry-net income snould be nigner given the amount or equity, assets, and invested capital. However, the company seems to be in a below average liquidity position and financial leverage is similar to others in the industry. III. The firm's days sales outstanding ratio is more than twice as long as the industry average, indicating that the firm should tighten credit or enforce a more stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets decreased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capital. Finally, it's market value ratios are also below industry averages. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry. Q Search this cou IV. The firm's days sales outstanding ratio is more than twice as long as the industry average, indicating that the firm should loosen credit or apply a less stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets increased, or both. While the company's profit margin is higher than the industry average, its other profitability ratios are low compared to the industry - net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry. V. The firm's days sales outstanding ratio is less than the industry average, indicating that the firm should tighten credit or enforce a more stringent collection policy. The total assets turnover ratio is well below the industry average so sales should be increased, assets decreased, or both. While the company's profit margin is lower than the industry average, its other profitability ratios are high compared to the industry- net income should be higher given the amount of equity, assets, and invested capital. However, the company seems to be in an average liquidity position and financial leverage is similar to others in the industry. -Select- d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and common equity during 2021. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.) 1. If 2021 represents a period of normal growth for the firm, ratios based on this year will be distorted and a comparison between them and industry averages will have little meaning. Potential investors who look only at 2021 ratios will be misled, and a continuation of normal conditions in 2022 could hurt the firm's stock price. -Select- II. If 2021 represents a period of normal growth for the firm, ratios based on this year will be accurate and a comparison between them and industry averages will have substantial meaning. Potential investors who look only at 2021 ratios will be misled, and a return to supernormal conditions in 2022 could hurt the firm's stock price. III. If 2021 represents a period of supernormal growth for the firm, ratios based on this year will be distorted and a comparison between them and industry averages will have substantial meaning. Potential investors who look only at 2021 ratios will be well informed, and a return to normal conditions in 2022 could hurt the firm's stock price. IV. If 2021 represents a period of supernormal growth for the firm, ratios based on this year will be distorted and a comparison between them and industry averages will have little meaning. Potential investors who look only at 2021 ratios will be misled, and a return to normal conditions in 2022 could hurt the firm's stock price. V. If 2021 represents a period of supernormal growth for the firm, ratios based on this year will be accurate and a comparison between them and industry averages will have substantial meaning. Potential investors need only look at 2021 ratios to be well informed, and a return to normal conditions in 2022 could help the firm's stock price. Grade it Now Save & Continue Continue without saving

a. Explain the role weighted average cost of capital plays when determining a project's cost of capital. b. Miller Manufacturing has a target debt-equity ratio of 0.66. Its cost of equity is18 per cent, and its cost of debt is 8 per cent. If the tax rate is 35 per cent.What is Miller's WACC? c. Titan Mining Corporation has 8 million shares of equity outstanding and1,350,000 5.9 per cent semi-annual bonds outstanding, par value £100 each.The equity currently sells for £32 per share and has a beta of 1.3, and the bonds have 15 years to maturity and sell for 93 per cent of par. The market risk premium is 8 per cent, T-bills are yielding 4 per cent, and Titan Mining's tax rate is 28 per cent. What is the firm's market value capital structure? d. The following information applies to the questions displayed below.An all-equity firm is considering the following projects: The T-bill rate is 5 per cent, and the expected return on the market is 6.9 percent. Which projects should be accepted? e. Suppose your boss comes to you and asks you to re-evaluate a capital budgeting project. The first evaluation was in error, he explains, because it ignored flotation costs. To correct for this, he asks you to evaluate the project using a higher cost of capital which incorporates these costs. Is your boss' approach correct? Why or why not?

Q1. A Japanese steel manufacturer is considering expanding operations. From experience, it estimates that new capacity addition obey the law \mathrm{f}(\mathrm{y})=0.00345 y^{0.51} Where the cost, f(y), is measured in millions of dollars and y is measured in tons f steel produced. If the demand for steel is assumed to grow at the constant rate of 8,000 tons per year. Assume that annual interest rate is 10 percent. What is the optimal number of years between new plants opening and optimal value of plant capacity? (15 points)

A series of monthly cash flows is deposited into an account that earns 12% nominal interest com- pounded monthly. Each monthly deposit is equal to $2100. The first monthly deposit occurred on June 1, 2012 and the last monthly deposit will be on January 1, 2019. The account (the series of monthly deposits, 12% nominal interest, and monthly compounding) also has equivalent quarterly withdrawals from it. The first quarterly withdrawal is equal to $5000 and occurred on October1, 2012. The last $5000 withdrawal will occur on January 1, 2019. How much remains in the account after the last withdrawal?