Questions from Corporate Finance


Q: A financial planning service offers a college savings program.

A financial planning service offers a college savings program. The plan calls for you to make six annual payments of $15,000 each, with the first payment occurring today, your child’s 12th birthday. B...

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Q: Your financial planner offers you two different investment plans. Plan

Your financial planner offers you two different investment plans. Plan X is an annual perpetuity of $35,000 per year. Plan Y is an annuity for 15 years and an annual payment of $47,000. Both plans wil...

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Q: What is the value of an investment that pays $25,000

What is the value of an investment that pays $25,000 every other year forever, if the first payment occurs one year from today and the discount rate is 7 percent compounded daily? What is the value to...

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Q: Workman Software has 6.4 percent coupon bonds on the market

Workman Software has 6.4 percent coupon bonds on the market with 18 years to maturity. The bonds make semiannual payments and currently sell for 94.31 percent of par. What is the current yield on the...

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Q: Twist Corp. has a current accounts receivable balance of $537,810.

Twist Corp. has a current accounts receivable balance of $537,810. Credit sales for the year just ended were $5,473,640. What is the receivables turnover? The days’ sales in receivables? How long did...

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Q: You have 45 years left until retirement and want to

You have 45 years left until retirement and want to retire with $4 million. Your salary is paid annually, and you will receive $50,000 at the end of the current year. Your salary will increase at 3 pe...

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Q: A check-cashing store is in the business of making personal

A check-cashing store is in the business of making personal loans to walk-up customers. The store makes only one-week loans at 6.8 percent interest per week. a. What APR must the store report to its c...

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Q: The King Corporation has ending inventory of $386,735, and cost

The King Corporation has ending inventory of $386,735, and cost of goods sold for the year just ended was $4,981,315. What is the inventory turnover? The days’ sales in inventory? How long on average...

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Q: The Wildcat Oil Company is trying to decide whether to

The Wildcat Oil Company is trying to decide whether to lease or buy a new computer-assisted drilling system for its oil exploration business. Management has decided that it must use the system to stay...

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Q: Queen, Inc., has a total debt ratio of .46. What

Queen, Inc., has a total debt ratio of .46. What is its debt-equity ratio? What is its equity multiplier?

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