Questions from Corporate Finance

Q: K-Too Ever wear Corporation can manufacture mountain climbing shoes for

K-Too Ever wear Corporation can manufacture mountain climbing shoes for $24.86 per pair in variable raw material costs and $14.08 per pair in variable labor expense. The shoes sell for $135 per pair....

Q: Olin Transmissions, Inc. has the following estimates for its new

Olin Transmissions, Inc. has the following estimates for its new gear assembly project: price = $1,900 per unit; variable costs = $240 per unit; fixed costs = $4.8 million; quantity = 95,000 units. Su...

Q: For the company in the previous problem, suppose management is

For the company in the previous problem, suppose management is most concerned about the impact of its price estimate on the project’s profitability. How could you address this concern? Describe how yo...

Q: We are evaluating a project that costs $724,000, has an

We are evaluating a project that costs $724,000, has an eight-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected a...

Q: In the previous problem, suppose the projections given for price,

In the previous problem, suppose the projections given for price, quantity, variable costs, and fixed costs are all accurate to within ± 10 percent. Calculate the best-case and worst-case NPV fi gures...

Q: A stock has an expected return of 10.2 percent, the

A stock has an expected return of 10.2 percent, the risk-free rate is 4.5 percent, and the market risk premium is 8.5 percent. What must the beta of this stock be?

Q: In each of the following cases, calculate the accounting break-even

In each of the following cases, calculate the accounting break-even and the cash break-even points. Ignore any tax effects in calculating the cash break-even.,,,

Q: In each of the following cases, find the unknown variable:

In each of the following cases, find the unknown variable:,,,

Q: A project has the following estimated data: price = $57

A project has the following estimated data: price = $57 per unit; variable costs = $32 per unit; fixed costs = $9,000; required return = 12 percent; initial investment = $18,000; life = four years. Ig...

Q: The Gecko Company and the Gordon Company are two firms

The Gecko Company and the Gordon Company are two firms whose business risk is the same but that have different dividend policies. Gecko pays no dividend, whereas Gordon has an expected dividend yield...