Questions from Managerial Finance

Q: Taylor Systems has just issued preferred stock. The stock has an

Taylor Systems has just issued preferred stock. The stock has an 8% annual dividend and a $100 par value and was sold at $99.50 per share. In addition, flotation costs of $1.50 per share must be paid....

Q: A few years ago, Largo Industries implemented an inventory auditing system

A few years ago, Largo Industries implemented an inventory auditing system at an installed cost of $175,000. Since then, it has taken depreciation deductions totaling $124,250. What is the system’s cu...

Q: Determine the cost for each of the following preferred stocks.

Determine the cost for each of the following preferred stocks.

Q: Netflix common stock has a beta, b, of 0.

Netflix common stock has a beta, b, of 0.8. The risk-free rate is 3%, and the market return is 10%. a. Determine the risk premium on Netflix common stock. b. Determine the required return that Netflix...

Q: The Ball Shoe Company is considering an investment project that requires an

The Ball Shoe Company is considering an investment project that requires an initial investment of $542,000 and returns after-tax cash inflows of $75,000 per year for 10 years. The firm has a maximum a...

Q: Hook Industries is considering the replacement of one of its old metal

Hook Industries is considering the replacement of one of its old metal stamping machines. Three alternative replacement machines are under consideration. The relevant cash flows associated with each a...

Q: Jenny Jenks has researched the financial pros and cons of entering into

Jenny Jenks has researched the financial pros and cons of entering into a 1-year MBA program at her state university. The tuition and books for the master’s program will have an up-front cost of $50,0...

Q: Neil Corporation has three projects under consideration. The cash flows for

Neil Corporation has three projects under consideration. The cash flows for each project are shown in the following table. The firm has a 16% cost of capital. a. Calculate each projectâ€&...

Q: A project costs $2,500,000 up front and

A project costs $2,500,000 up front and will generate cash flows in perpetuity of $240,000. The firm’s cost of capital is 9%. a. Calculate the project’s NPV. b. Calculate the annual EVA in a typical y...

Q: For each of the projects shown in the following table, calculate

For each of the projects shown in the following table, calculate the internal rate of return (IRR). Then indicate, for each project, the maximum cost of capital that the firm could have and still find...