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Type: Posts; User: ArcSine

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  1. You're on the right track, just need a couple...

    You're on the right track, just need a couple more steps. You've applied the discount factors to the asset's pre-tax annual profits, but you should first compute the after-tax cash flow before...
  2. Question: Business Economic

    by ArcSine
    Answers
    1
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    474

    Welcome to the site, Hadel, Are you saying...

    Welcome to the site, Hadel,

    Are you saying that you've been provided in the problem's information the various curves in function (algebraic equation) form, or can derive them from the given info?...
  3. Answers
    5
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    322

    While smoothy's answer would doubtlessly be...

    While smoothy's answer would doubtlessly be accepted as accurate by most current mainstream texts in the Western Hemisphere, it should be pointed out that there exists a school of thought---one...
  4. Answers
    1
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    1,652

    Your avg and stdev calcs for the individual...

    Your avg and stdev calcs for the individual securities are fine. You'll need to post your steps in the blended portfolio calcs in order to debug it.
  5. Just to get you aimed right and started towards...

    Just to get you aimed right and started towards first base:

    If p is the unit price at the register (in dollars, presumably), note that in the post-tax scenario, (p + 0.3) is the effective price...
  6. Question: Finance question

    by ArcSine
    Answers
    3
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    1,378

    Kind of late for the party, but FWIW, your...

    Kind of late for the party, but FWIW, your probability "ceiling" for a problem like this is given by the ratio
    L / (L + P)

    where L and P are, respectively, the net loss incurred on an unsold...
  7. For this purpose, Retained Earnings is similar to...

    For this purpose, Retained Earnings is similar to a bank account. While not actually the same, Retained Earnings and bank accounts do have something in common:

    The beginning balance (at any given...
  8. Impossible to say without a lot more data. ...

    Impossible to say without a lot more data.

    The built-in contract and the "many customers" parts are certainly positives, but how many dollars they add to the economic value of the biz is a...
  9. You can assume that the variable costs for this...

    You can assume that the variable costs for this special 40-unit order will be the same as it is for the regular 2009 operations.

    From the 2009 data you're given that total variable costs were...
  10. Answers
    1
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    444

    No. However, if you intend for these assets to...

    No. However, if you intend for these assets to remain permanently as LLC assets henceforth, you should record them on the books as owner contributions to capital. If you intend to bring them back out...
  11. From what you've described, they're not on a...

    From what you've described, they're not on a purely cash basis, but rather on something of a hybrid. They used an accrual-basis approach to recording their December payroll, by recording not just the...
  12. Yup, my bad... forgot about the employee portion...

    Yup, my bad... forgot about the employee portion (withholdings) of the taxes.

    Then if the company is on a strictly cash basis, it only recorded a salaries / wages expense in Dec for the net pay...
  13. The appropriate procedure depends on whether the...

    The appropriate procedure depends on whether the company is on the cash basis of accounting or on the accrual method.

    If the former, the January payments for the Dec payroll taxes would just be...
  14. Answers
    1
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    488

    Nice copy-n-paste job on the question, right down...

    Nice copy-n-paste job on the question, right down to the percentage credits for each part. Hence you're part way there. Now (per the homework-help rules you read earlier, surely) just show your work...
  15. Answers
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    854

    Start by setting up two equations---using the...

    Start by setting up two equations---using the given data---which incorporate the two unknowns.

    Let C denote the number of coffee cases, and T the number of tea cases.

    One of your equalities...
  16. Answers
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    474

    From Sales and Net Profit Margin you can derive...

    From Sales and Net Profit Margin you can derive Net Income.

    From Net Income and Return on Equity you can derive amount of Equity.

    From Equity and Assets you can determine Debt.

    From Debt and...
  17. Answers
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    481

    I'd record the reimbursement as a reduction of...

    I'd record the reimbursement as a reduction of your meeting expense rather than as a revenue item. Just a personal bias on my part, from two arguable reasons:

    If the other party reimburses you...
  18. Can you get your hands on either the tax returns...

    Can you get your hands on either the tax returns for one or more years immediately preceding 2007, or the checkbook register (and/or bank statement copies) for such time? From these it might be...
  19. It's possible---though by no means certain---that...

    It's possible---though by no means certain---that it's OK as it sits. First, remember that cash or bank accounts, and equity accounts, are not mutually exclusive. On the contrary, they frequently go...
  20. Answers
    4
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    1,301

    Both your answer and your rationale are correct,...

    Both your answer and your rationale are correct, as profitability is one of the fundamental drivers of supply.

    The second part of the question, though, deserves a little thought. For a firm...
  21. Answers
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    463

    1 and 2 are good. In 3, remember that you're...

    1 and 2 are good.

    In 3, remember that you're selling the asset bought in Event 2. Hence the credit should reflect that particular asset.

    Also in 3, I don't see any basis for assuming the asset...
  22. Answers
    1
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    590

    The only way to answer that one with any...

    The only way to answer that one with any certainty is to look carefully at the wording, definitions, etc. the specific agency in question uses in their regulations, regarding their method of...
  23. Hard to diagnose with any accuracy from a...

    Hard to diagnose with any accuracy from a distance, as there are myriad possibilities for it.

    But very generally, the fact that you maintain a liabilities account suggests that you're using a...
  24. Answers
    3
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    1,223

    Wrong forum. You want ...

    Wrong forum. You want

    www.IWantSomebodyElseToDoMyHomeworkSoICanRealizeMyDreamOfBeingABurdenOnSociety.com

    They'll fix you right up over there, sport.
  25. Answers
    1
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    544

    Very generally, if volume / output is a variable...

    Very generally, if volume / output is a variable that affects the final cost (your post suggests it may be) then you first need a reasonable estimate of your usage requirements over the term of the...
  26. Answers
    3
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    2,221

    Hmmm.. . With (a) and (b) you're safely on...

    Hmmm.. . With (a) and (b) you're safely on second.

    To stretch it out into a three-bagger, for (c) go back and review the example I gave earlier. In particular, note that the numerator is the...
  27. Answers
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    2,221

    In (a) you're spot on. For (b), where did the...

    In (a) you're spot on.

    For (b), where did the bond come from? No bond is mentioned in the question. Moving on, the question is really asking, "What is the convertible's value in terms of the...
  28. Question: Statistics

    by ArcSine
    Answers
    10
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    1,114

    'preciated indeed!

    'preciated indeed!
  29. Question: Statistics

    by ArcSine
    Answers
    10
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    1,114

    Multiple Choice: BBRIDBART disregarded AMHD's...

    Multiple Choice: BBRIDBART disregarded AMHD's homework assistance rules, and in the process of furnishing answers, got how many right?

    (a) 20%
    (b) 20%
    (c) 20%
    (d) 20%
  30. Yvonne, the initial investment of 10K can be...

    Yvonne, the initial investment of 10K can be included or excluded as one of the cash flows; the two different approaches only give two versions of the same comparison. It's analogous to the fact that...
  31. Answers
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    1,135

    You're correct that the attached schedule doesn't...

    You're correct that the attached schedule doesn't give all the data needed for a WACC calc. From the schedule you can determine each component's weight in the firm's capital structure, but to go any...
  32. There is a shortcut to the answer, given by the...

    There is a shortcut to the answer, given by the relationships between the functions and their first derivatives. But it's insightful to build up from the ground to see the individual parts in action....
  33. Answers
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    1,840

    Ambiguously-worded question. "What was the...

    Ambiguously-worded question.

    "What was the effect of these sales on Bextra's current ratio?" (emphasis mine).

    My snap reaction to the wording is that the author is contemplating solely the...
  34. Question: Cost of debt

    by ArcSine
    Answers
    3
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    2,769

    Glad to hear it helped out a bit, and thanks....

    Glad to hear it helped out a bit, and thanks. Sometimes, it's just a matter of hearing something described a little differently, or accompanied by a different mental picture, to reach that "aha!"...
  35. Question: Cost of debt

    by ArcSine
    Answers
    3
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    2,769

    Your cost of equity is correct; your cost of debt...

    Your cost of equity is correct; your cost of debt is not.

    The cost of Jones' debt is simply the interest rate that corresponds to the 600,000 loan amount being exactly amortized with 10 annual...
  36. Answers
    3
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    1,354

    Happy to help, CG. The thing about rounding-off...

    Happy to help, CG. The thing about rounding-off issues is that (especially in exponential-growth situations, such as here) a little rounding can grow into significant differences pretty quick.
    ...
  37. Answers
    3
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    1,354

    In any given year, the total spending will be...

    In any given year, the total spending will be given by P times C, where P is the total population, and C is the per-capita spending for such year.

    But the total population, and the per-capita...
  38. Answers
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    679

    That'd be my guess. While a simple...

    That'd be my guess.

    While a simple amortization schedule could tell you the principle / interest composition of each payment, one would also need to know the payer's marginal tax rate in order to...
  39. Answers
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    507

    To what advantage? Deducting pre-incorporation...

    To what advantage? Deducting pre-incorporation expenses against post-incorporation income on the S-corp's return can be a little tricky; depends on the timing and nature of the expenditures, and...
  40. Answers
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    763

    Use the given info along with the constant-growth...

    Use the given info along with the constant-growth model to determine the discount rate the market is using to derive the $100 share price.

    Then with that discount rate in hand use the...
  41. @Mattecheverria, your basic premise is correct...

    @Mattecheverria, your basic premise is correct that inflation makes the real cost of borrowing less than the nominal cost. Generally, for some inflation rate i and a nominal borrowing cost r, your...
  42. What they mean is that at the end of the second...

    What they mean is that at the end of the second year, the investment returns not only 150 but also returns back the original investment amount of 2,000. Thus the three cash flows are, in order,...
  43. Question: Finance question

    by ArcSine
    Answers
    1
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    955

    SBG7, you've done everything technically correct,...

    SBG7, you've done everything technically correct, computationally (nice job). However, this one illustrates why the constant growth model requires that k > g, for required rate of return k and...
  44. Answers
    1
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    812

    First describe the cash flows remaining on this...

    First describe the cash flows remaining on this bond. Tell me what the coupon payments are (their amount, and when they'll be paid), and tell when the maturity amount is to be paid (assume they're...
  45. Answers
    2
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    3,633

    The cash budget for a single month: Starts...

    The cash budget for a single month:
    Starts with the amount of cash as of the first day of the month
    Lists and adds the cash expected to be collected during that month
    Lists and deducts the...
  46. Question: Finance questions

    by ArcSine
    Answers
    3
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    781

    I. Is correct. For II, dividend yield is...

    I. Is correct.

    For II, dividend yield is calculated by dividing the actual dividend---not the payout rate---by the share price. The actual dividend is found by multiplying the earnings per share...
  47. Consider the fundamental relationship between the...

    Consider the fundamental relationship between the future value FV and the present value PV of some amount, where there are n periods between the two:

    FV = PV(1 + r)^n for some interest rate r.
    ...
  48. (5) is correct. On the others, you're using...

    (5) is correct.

    On the others, you're using the right Excel functions, but in each case you need to express the prices in the exact syntax Excel requires, as I mentioned in my response to your...
  49. Question: Bond evaluation?

    by ArcSine
    Answers
    4
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    1,549

    You're good on (4) and (6). Regarding (5),...

    You're good on (4) and (6).

    Regarding (5), Excel wants you to get the syntax exactly right when it comes to expressing the prices in your function. Specifically, prices need to be expressed as...
  50. Question: Bond evaluation?

    by ArcSine
    Answers
    4
    Views
    1,549

    1) Correct 2) Incorrect fraction in your...

    1) Correct
    2) Incorrect fraction in your formula. They're selling for 884.5 per 1,000 face amount bond. Note that since they're selling at a discount, the yield must be greater than their coupon...
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