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To which firm would you prefer to lend money? Why?

17 / 01 / 2019 Research Papers

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FINANCIAL STATEMENTS. Harry’s Convaly (in000’s except per share data) BALANCE SHEET, as of… 1 answer below » FINANCIAL STATEMENTS. Harry’s Convaly (in000’s except per share data) BALANCE SHEET, as of year-end ASSETS 2012 INCOME STATE DENT Net sales 2012 5512.305 Cash and marketable securities $45,183 Cost of goods sold 326.327 Accounts receNable 41,398 Gross petit $185.978 Inventory 31.367 Admin and selling exp 529.930 Total Current assets $117,948 Depreciation 14.875 Plant & equipment, Boss $148,746 Miscellaneous expenses 5, &N Accumulated depreciation 81,880) Total operating exp $50,626 Net axed assets 5126.866 E BIT $135.352 Total assets 5244.814 Interest on ST loans 53.795 View complete question » FINANCIAL STATEMENTS. Harry’s Convaly (in000’s except per share data) BALANCE SHEET, as of year-end ASSETS 2012 INCOME STATE DENT Net sales 2012 5512.305 Cash and marketable securities $45,183 Cost of goods sold 326.327 Accounts receNable 41,398 Gross petit $185.978 Inventory 31.367 Admin and selling exp 529.930 Total Current assets $117,948 Depreciation 14.875 Plant & equipment, Boss $148,746 Miscellaneous expenses 5, &N Accumulated depreciation 81,880) Total operating exp $50,626 Net axed assets 5126.866 E BIT $135.352 Total assets 5244.814 Interest on ST loans 53.795 Document Preview: Question 1: (Financial Statement Analysis) 10 points
Consider the following sets of financial statements and answer the questions that follow:
a. To which firm would you prefer to lend money? Why?
b. In which firm would you prefer to invest? Why?
Question 2: (Time Value of Money – Monthly Loan Payments) 5 points
Best Buy has a flat-screen HDTV on sale for $1,995. If you could borrow that amount from First National Bank of St Louis at 6% for 1 year, what would be your monthly loan payments?
Question 3: (Time Value of Money – Present Value) 4 points
You would like to have $1,000,000 accumulated by the time you turn 65, which will be 40 years from now. How much would you have to put away each year to reach your goal, assuming you’re starting from zero now and you earn 5% annual interest on your investment?
Question 4: (Risk & Return) 4 points
You hold a portfolio of stocks consisting of the following:
Stock Beta Current Value
John Deere 1.0 $20,000
BankAmerica 0.6 $23,000
McDonalds 0.7 $18,000
Boeing 1.1 $16,000
Total: $77,000
a. What is the beta of the portfolio?
b. You have decided to sell Boeing for $16,000 and to use the proceeds to buy $16,000 of Raytheon stock with a beta of 1.5. After the transaction is complete, what will be the new beta of the portfolio? (Disregard any commissions on the buy and sell transactions.)
Question 5: (Risk & Return) 3 points
a. Define the Capital Asset Pricing Model.
b. Explain what a stock’s “beta” is.
c. If the risk-free rate is 1% and the expected rate of return on the stock market is 7%, what is the required rate of return per the CAPM for a stock that has a beta of 1.2?
Question 6: (Bond valuation) 8 points
a. Joe’s Company’s bonds have 10 years remaining to maturity. Interest is paid annually, the bonds have a $1,000 par value, and the coupon interest rate… Attachments: Questions.docx View less » Jul 28 2015 03:35 PM


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