Business Finance Help for College and University Students

Calculate and analyze the degree of operating leverage

A project has a fixed cost of $1,000 per year, depreciation charges of $500 a year, revenue of $6,000 a year and variable costs equal to two-thirds of revenues. A. If sales increase by 5%, what will be the increase pretax profits B. What is the degree of operating leverage of this project C. Confirm that the percenta ...continues

Analyze an IPO

Having heard about OPI underpricing, I put in an order to my broker for 1,000 shares of every IPO he can get me. After 3 months, my investment record is as attached. A. What is the average underpricing of this sample of IPOs? B. What is the average initial return on my "portfolio" of shares purchased from the four IPOs ...continues

Lease vs Buy

1. Lease or Buy. Your company wants to purchase a new network file server for its wide-area computer network. The server costs $75,000. It will be completely obsolete in three years. Your options are to borrow the money at 10 percent or to lease the machine. If you lease, the payments will be $27,000 per year, payable at the ...continues

Capital Structure Analysis

Using attached Pfizer Pharmaceutical information. Assume that the company will engage in a major capital acquisition program that is expected to improve EBIT by 10%. Do the following: 1) Calculate the EBIT/EPS for debt financing. Discuss the financial implications. Document the cource of your information 2) Calculate t ...continues

MINICASE-Prairie Home -Rate of return First, what should she assume about investment and growth? Mr. Breezeway suggested two valuations, one assuming more rapid expansion (as in the top panel of Table 3.8) and another just projecting past growth (as in the bottom panel of Table 3.8). Second, what rate of return should she use? Mr. Breezeway said that 15 percent, Prairie Home's usual return on book equity, sounded right to him, but he referred her to an article in the Journal of Finance indicating that investors in rural supermarket chains, with risks similar to Prairie Home Stores, expected to earn about 11 percent on average

Using the attached information Terence Breezeway, the CEO of Prairie Home Stores, wondered what retirement would be like. It was almost 20 years to the day since his uncle Jacob Breezeway, Prairie Home’s founder, had asked him to take responsibility for managing the company. Now it was time to spend more time riding and fishi ...continues

Need help with capital budgeting analysis

Attached is a case and I'm working on analyzing Option #3. I need help using CAPM, IRR, FV, NPV, and other tools to conclude that option #3 is a good decision. I don't know how to use these tools and I'm looking for someone to help me through this.

INTERNATIONAL FINANCE: Purchasing Power Parity

If US prices are expected to rise by 3% over the coming year and prices in France are expected to rise by 7 % during the same time, what is the expected spot rate in one year of the French franc given that the current spot exchange rate US $0.168.

INTERNATIONAL FINANCE

IF US PRICES ARE EXPECTED TO RISE BY 3% OVER THE COMING YEAR AND PRICES IN FRANCE ARE EXPECTED TO RISE BY 7 % DURING THE SAME TIME,WHAT IS THE EXPECTED SPOT RATE IN ONE YEAR OF THE FRENCH FRANC GIVEN THA THE CURRENT SPOT EXCHANGE RATE US $0.168.

Business Finance

Could some please show me step by step how to work these 3 problems: (FOR TABLES/QUESTIONS IN FULL, PLEASE SEE ATTACHMENT) 1. You currently own the following portfolio of stocks (table). You are planning to sell $300,000 of stock C and $200,000 of stock A and invest the proceeds in stock D. What would be the portfolio's requ ...continues

INTERNATIONAL FINANCE

SUPPOSE THE SPOT RATE FOR THE POUND,MARK,AND SWISS FRANC ARE $1.30;$.35;AND$.40,RESPECTIVELY.THE ASSOCIATED 90-DAY INTEREST RATES(ANNUALIZED)ARE 16%;8%AND 4%WHILE THE US.90-DAY INTEREST RATE(ANNUALIZED)IS 12%.WHAT IS THE 90-DAY RATE ON AN ACU(ACU1=1POUND+1DM+1SFR)IF INTEREST PARITY HOLDS?