Questions from General Finance

Q: Jack asked Jill to marry him, and she has accepted under

Jack asked Jill to marry him, and she has accepted under one condition: Jack must buy her a new $330,000 Rolls-Royce Phantom. Jack currently has $45,530 that he may invest. He has found a mutual fund...

Q: Ronen Consulting has just realized an accounting error that has resulted in

Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of $398,930 due in 28 years. Toni Flanders, the company’s CEO, is scrambling to discount the liability...

Q: Lisa Simpson wants to have $1 million in 45 years by

Lisa Simpson wants to have $1 million in 45 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 8.75 percent annually. What must Lisa’s annual deposit be?

Q: What factors determine a bond’s rating? Why is the rating important

What factors determine a bond’s rating? Why is the rating important to the firm’s manager?

Q: Aylward, Inc. currently has $2,145,000

Aylward, Inc. currently has $2,145,000 in current assets and $858,000 in current liabilities. The company’s managers want to increase the firm’s inventory, which will be financed by a short-term note...

Q: Levine Manufacturing, Inc. is considering several investments. The rate

Levine Manufacturing, Inc. is considering several investments. The rate on Treasury bills is currently 2.75 percent, and the expected return for the market is 12 percent. What should be the required r...

Q: MFI, Inc. has a beta of 0.86.

MFI, Inc. has a beta of 0.86. If the expected market return is 11.5 percent and the risk-free rate is 3 percent, what is the appropriate required return of MFI (using the CAPM)?

Q: Suppose you purchased 16 shares of Disney stock for $24.

Suppose you purchased 16 shares of Disney stock for $24.22 per share on May 1, 2012. On September 1 of the same year, you sold 12 shares of the stock for $25.68 per share. Calculate the holding-period...

Q: Mr. Bill S. Preston, Esq., purchased a new

Mr. Bill S. Preston, Esq., purchased a new house for $80,000. He paid $20,000 down and agreed to pay the rest over the next 25 years in 25 equal end-of-year payments plus 9 percent compound interest o...

Q: To pay for your child’s education, you wish to have accumulated

To pay for your child’s education, you wish to have accumulated $15,000 at the end of 15 years. To do this, you plan on depositing an equal amount into the bank at the end of each year. If the bank is...