Questions from Corporate Finance

Q: Aguilera Acoustics, Inc. (AAI), projects unit sales for

Aguilera Acoustics, Inc. (AAI), projects unit sales for a new seven-octave voice emulation implant as follows: Year Unit Sales 1 ……………………….……….. 83,000 2 ………….…………………….. 92,000 3 …………….………………… 104,00...

Q: Consider the following project for Hand Clapper, Inc. The company

Consider the following project for Hand Clapper, Inc. The company is considering a four-year project to manufacture clap-command garage door openers. This project requires an initial investment of $8...

Q: The Morgan Corporation has two different bonds currently outstanding. Bond M

The Morgan Corporation has two different bonds currently outstanding. Bond M has a face value of $30,000 and matures in 20 years. The bond makes no payments for the first six years, then pays $800 eve...

Q: Rite Bite Enterprises sells toothpicks. Gross revenues last year were $

Rite Bite Enterprises sells toothpicks. Gross revenues last year were $7.5 million, and total costs were $3.4 million. Rite Bite has 1 million shares of common stock outstanding. Gross revenues and co...

Q: What is the present value of an annuity of $6,

What is the present value of an annuity of $6,500 per year, with the first cash flow received three years from today and the last one received 25 years from today? Use a discount rate of 7 percent.

Q: What is the value today of a 15-year annuity that

What is the value today of a 15-year annuity that pays $650 a year? The annuity’s first payment occurs six years from today. The annual interest rate is 11 percent for Years 1 through 5, and 13 percen...

Q: Y3K, Inc., has sales of $2,700,

Y3K, Inc., has sales of $2,700, total assets of $1,310, and a debt–equity ratio of 1.20. If its return on equity is 15 percent, what is its net income?

Q: A proposed cost-saving device has an installed cost of $

A proposed cost-saving device has an installed cost of $640,000. The device will be used in a five-year project but is classified as three year MACRS property for tax purposes. The required initial ne...

Q: Ramsay Corp. currently has an EPS of $2.35

Ramsay Corp. currently has an EPS of $2.35, and the benchmark PE for the company is 21. Earnings are expected to grow at 7 percent per year. a. What is your estimate of the current stock price? b. Wha...

Q: The following premerger information about Firm A and Firm B:

The following premerger information about Firm A and Firm B: Assume that Firm A acquires Firm B via an exchange of stock at a price of $18 for each share of B ’s stock. Both A and B...