Business Finance Help for College and University Students

1) Lease vs Purchase 2) Equipment Purchase Comparison

//Question One// Lease vs. Purchase The Hot Bagel Shop wishes to evaluate two plans, leasing and borrowing to purchase, for financing an oven. The firm is in the 40% tax bracket. Lease. The shop can lease the oven under a 5-year lease requiring annual end-of-year of $5000. All maintenance costs will be paid by the lessor ...continues

Capital Budgeting: The most important step in capital budgeting is to know how to determine the project cash flow.

Wild West air is considering two alternative planes. Plane A has an expected life of 5 years, will cost $200, and will produce net cash flows of $60 per year. Plane B has a life of 10 years, will cost $245, and will produce net cash flows of $48 per year. Wild West plans to serve the route for 10 years. Inflation in operating co ...continues

The discounted payback method is more valuable than the payback method in that it considers the time value of money, but it still ignores cash flows occurring after the cut-off period.

What are the differences between the payback period method and the discounted payback method? Which method is better in valuating investments?

Construct synthetically a zero-coupon bond from coupon bonds

The prices of the following coupon bonds are as follows: Maturity Coupon Price 1 4.75% 103.675 2 7.5% 111.753 3 9.375% 121.445 4 6.25% 114.130 5 5.50% 112.158 How can I construct synthetically a 3-year zero-coupon bond? Which coupon bonds would I have to invest in? What are the proportions in which I wi ...continues

Complete list of financial formulas including present and future values; ffective, nominal and real interest rates; roject evaluation formulas; risk and return; CAPM & WACC

Formula list

Finance

First Fidelity has asked you to bid for a zero coupon loan portfolio A with a term of 5 years. Their internal controls suggest it has a 90% chance of a paying $100.00 at maturity and a 10.00% chance of a paying $90.00. City Mutual recently sold a similar term loan portfolio B which you estimated as having a 60% chance of a pa ...continues

Break-even Point

NVW is a winery that produces a high-quality, nonalcoholic red wine from organically grown cabernet sauvignon grapes. It sells each bottle for $30. NVW's CFO, Jackie Cheng, has estimated variable costs to be 70% of sales. If NVW's fixed costs are $360,000, how many bottles of its wine must NVW sell to break even?

Flotation Costs & Issue Size

Your firm needs to raise $10 million. Assuming that flotation costs are expected to be $15 per share and that the market price of the stock is $120, how many shares would have to be issued? What is the dollar size of the issue?

Guidance on topic of

I am currently working on a term paper topic of Earnings Management. Here is my outline: Abstract Definition of Earnings Management Importance to Investor Abused Techniques Discussed 1)Accelerating Revenue 2)Delaying expenses 3)Accelerating expenses 4)Off-balance sheet accounting 5)Pro-forma EPS Focus on Off-ba ...continues

Cash flow Problem

Calculate the free cash flows for RPI, Inc., for the year ended December 31, 2001, both from an operating and a financing perspective. Interpret your results. Please see attachment for information. I've reposted this with the attachment as Word document.