Recent Question

How much net operating profit after taxes 1. TSW Inc. had the following data for last year: Net income = $800; Net operating profit after taxes (NOPAT) = $700; Total assets = $3,000; and Total operating capital = $2,000. Information for the just-completed year is as follows: Net income = $1,000; Net operating profit after taxes (NOPAT) = $925; Total assets = $2,600; and Total operating capital = $2,500. How much free cash flow did the fir ...

Other / Other 04 May 2016

Will the effects of the high Russian inflation and the decline in the ruble offset 1. Inflation and Interest Rate Effects. The opening of Russia's market has resulted in a highly volatile Russian currency (the ruble). Russia's inflation has commonly exceeded 20 percent per month. Russian interest rates commonly exceed 150 percent, but this is sometimes less than the annual inflation rate in Russia. a. Explain why the high Russian infla ...

Other / Other 04 May 2016

Why do you think U.S. investors do not try to capitalize on the high interest rates 1. Interest Rates. Why do interest rates vary among countries? Why are interest rates normally similar for those European countries that use the euro as their currency? Offer a reason why the government interest rate of one country could be slightly higher than that of the government interest rate of another country, even though the euro is the currency us ...

Other / Other 04 May 2016

Why do you think that an MNC’s strategy of diversifying projects 1. Financing Decision. Veer Co. is a U.S. based MNC that has most of its operations in Japan. Since the Japanese companies with which it competes use more financial leverage, it has decided to adjust its financial leverage to be in line with theirs. With this heavy emphasis on debt, Veer should reap more tax advantages. It believes that the market’s percepti ...

Other / Other 04 May 2016

Determine the NPV under these conditions 1. Capital Budgeting and Financing Cantoon Co, is considering the acquisition of a unit from the French government. Its initial outlay would be $4 million. It will reinvest all the earnings in the unit. It expects that at the end of 8 years, it will sell the unit for 12 million euros after capital gains taxes are paid. The spot rate of the euro is $1.20 and is used as the forecast of the euro in the ...

Other / Other 04 May 2016

What are some alternatives available to Rastell 1. Alternatives to International Acquisitions. Rastell Inc., a U.S.-based MNC, is considering the acquisition of a Russian target to produce personal computers (PCs) and market them throughout Russia, where demand for PCs has increased substantially in recent years. Assume that the stock market conditions are not favorable in Russia, as the stock prices of most Russian companies rose subst ...

Other / Other 04 May 2016

Tucker Electronic System's current balance sheet 1. Which of the following statements is CORRECT? a. If a firm reports a loss on its income statement, then the retained earnings account as shown on the balance sheet will be negative. b. Since depreciation is a source of funds, the more depreciation a company has, the larger its retained earnings will be, other things held constant. c. A firm can show a large amount of retained earnings ...

Other / Other 04 May 2016

The primary reason the annual report is important in finance is that it is used by investors True or false: 1. The annual report contains four basic financial statements: the income statement, balance sheet, statement of cash flows, and statement of stockholders' equity. 2. The primary reason the annual report is important in finance is that it is used by investors when they form expectations about the firm's future earnings and divi ...

Other / Other 04 May 2016

How much in dividends did Heaton pay 1. Meric Mining Inc. recently reported $15,000 of sales, $7,500 of operating costs other than depreciation, and $1,200 of depreciation. The company had no amortization charges, it had outstanding $6,500 of bonds that carry a 6.25% interest rate, and its federal-plus-state income tax rate was 35%. How much was the firm's net income after taxes? Meric uses the same depreciation expense for tax and stockhol ...

Other / Other 04 May 2016

The company has never paid a dividend to its common stockholders 1. Which of the following statements is CORRECT? a. The income statement for a given year, say 2012, is designed to give us an idea of how much the firm earned during that year. b. The focal point of the income statement is the cash account, because that account cannot be manipulated by "accounting tricks." c. The reported income of two otherwise identical firms cannot be ...

Other / Other 04 May 2016