Questions from Corporate Finance

Q: A major college textbook publisher has an existing finance textbook. The

A major college textbook publisher has an existing finance textbook. The publisher is debating whether to produce an “essentialized” version, meaning a shorter (and lower-priced) book. What are some o...

Q: Conch Republic Electronics is a midsized electronics manufacturer located in Key West

Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelley Couts, who inherited the company. When it was founded over 70 years ago...

Q: Consider the following abbreviated financial statements for Parrothead Enterprises:

Consider the following abbreviated financial statements for Parrothead Enterprises: a. What is owners’ equity for 2008 and 2009? b. What is the change in net working capital for 20...

Q: Geary Machine Shop is considering a four-year project to improve

Geary Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $560,000 is estimated to result in $210,000 in annual pretax cost savings. Th...

Q: Dangerfield Industrial Systems Company (DISC) is trying to decide between

Dangerfield Industrial Systems Company (DISC) is trying to decide between two different conveyor belt systems. System A costs $430,000, has a four-year life, and requires $110,000 in pretax annual ope...

Q: Suppose in the previous problem that DISC always needs a conveyor belt

Suppose in the previous problem that DISC always needs a conveyor belt system; when one wears out, it must be replaced. Which project should the firm choose now?

Q: Consider a project to supply 100 million postage stamps per year to

Consider a project to supply 100 million postage stamps per year to the U.S. Postal Service for the next five years. You have an idle parcel of land available that cost $2,400,000 five years ago; if t...

Q: In the previous problem, suppose you were going to use a

In the previous problem, suppose you were going to use a three-year MACRS depreciation schedule for your manufacturing equipment, and you could keep working capital investments down to only $25,000 pe...

Q: Vandalay Industries is considering the purchase of a new machine for the

Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2,900,000 and will last for six years. Variable costs are 35 percent of sales, and fixed...

Q: Compact fluorescent lamps (CFLs) have become more popular in recent

Compact fluorescent lamps (CFLs) have become more popular in recent years, but do they make financial sense? Suppose a typical 60-watt incandescent light bulb costs $.50 and lasts 1,000 hours. A 15-wa...