Finance-AW-Q42 Online Services


Test 2 (Matching)
Matching Answers are listed below. Please type your correct matched answer.
______________ 1. When a bond sells for more than its face value, the bond is said to sell at a ?
______________ 2. When a bond sells for less than its face value, the bond is said to sell at a ?

______________ 3. Bond prices and changes in market interest rates are ______ related?

______________ 4. PV stands for what ?

______________ 5. FV stands for what ?

______________ 6. Bonds issued by a state or local government whose interest is exempt fromfederal income tax are called ?
_______________7. Is a periodic payment for the purpose of retiring the debt issue.

_______________ 8. The lowest bond rating to still be considered investment grade.
_______________9. An unsecured bond supported by the general credit of the issuing firm.

_______________10. Bonds that may be converted into (exchanged for) stock at the option of
the bondholder.
_______________11. The common name for an open end investment company is ?
______________ 12. Investment company’s assets minus liabilities divided by the number of shares outstanding.

_______________13. Is an equity instrument that usually pays a fixed dividend and has a
claim prior to common stock on the firm’s earnings and assets.
_______________14. A government issued security that has a maturity of less than a year.

_______________15. A government issued security that has a maturity of over 10 years.
_______________16. This feature permits the issuer to redeem the bond prior to maturity.

______________ 17. What are the three major forms of business organizations?
Business Finance Test 2 (Matching)

18. __________ The production level where total revenue equals total costs is commonly
referred to as ?
19. __________ A small corporation (fewer than 35 stockholder’s) may elect to be organized
as a ______ which enables them to avoid double taxation yet receive the
corporate advantages of limited liability and ease of transfer?

20. __________ A capital budgeting technique which determines how long is required for an
investment’s cash inflows to recover an investment’s cost.
21. __________ The term use to describe a weighted average of the costs of debt, preferred
stock, and common stock.

22. __________ This equation is called what k = i ( 1 – t )

23. ___________ Combination of debt and equity financing that minimizes the average cost of
24. ___________ When a firm either borrows or issues bonds or preferred stock paying a fixed
dividend the firm has increased this ?

25. __________ This capital budgeting technique uses the rate of return that equates the
present value of an investment cash flow’s with the cost of making the
26. __________ Present value of an investment’s cash flows minus the cost of the investment.
27. __________ Two investments for which the acceptance of one automatically excludes the
acceptance of the other.

28.. __________ Is the process of making long term investment decisions such as whether to
expand plant and equipment?

29. ___________ Options to sell a stock at a specified price within a specified time period are
30. ___________ Projected financial statement that enumerates cash receipts and disbursements
for a period of time.
31. ___________ This method of forecasting is an alternative to percent of sales method and
plots the relationship of sales and assets over several years to determine if a
simple linear relationship exists.

32. ___________ In creating a cash budget, the first place to begin is with a forecast of ___?

33.. ___________ (Annual Sales / Account Receivable) equals _____?
Business Finance Test 2 (Matching)
Answers for Matching

Break Even Capital Budgeting
Sales Optimal Capital Structure
Call Stock Options Corporation
Put Stock Options Premium
Inverse Financial Leverage
Net Asset Value Mutually exclusive investments
Municipal Bonds Mutual Fund
After Tax Cost of Debt Debenture
Regression Analysis Future Value
Payback Preferred Stock
Treasury Bill Convertible Bonds
Internal Rate of Return (IRR) Present Value
Treasury Bond BBB
Discount CCC
Sinking Fund Partnership
Net Present Value (NPV) Callable
Economic Order Quantity Net Asset Value (NAV)
Accounts Receivable Turn Over Treasury Note
Weighted Average Cost of Capital (WACC) Cash Budget
Sole Proprietorship Inventory
S Corporation Expenses

Business Finance Test 2

Short Problems

______________1 . If a treasury bond is quoted at 97:25, what is the appropriate market price?
(format in dollars)

______________2. The dollar change in the DOW index between October 1, 2014 and
September 30, 2015. (Internet research problem)

______________3. The percentage increase in the S & P index between October 1, 2014 and
September 30, 2015

______________4. If a tax free bond is currently paying 4% and you are in a 25% marginal
tax bracket, what is the taxable equivalent interest rate?
______________5. As production increases, do variable costsper unit increase, decrease or
remain the same?
______________6. As production increases, do fixed costsper unit increase, decrease or
remain the same?
_____________ 7. An investment has the following possible outcomes based on the economy.
Booming economy $ 40,000; Normal Economy $ 25,000; Recession
Economy (-$ 15,000). Determine the expected value of the investment if
the following probabilities are given:
Booming economy 20% Normal Economy 50% Recession Economy 30%

You can read more about our case study assignment help services here.

How it Works

How It works ?

Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention Case Id mentioned in end of every Q&A Page. You can also send us your details through our email id with Case Id in the email body. Case Id is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.

Step 2:- While filling submit your quotes form please fill all details like deadline date, expected budget, topic , your comments in addition to Case Id . The date is asked to provide deadline.

Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id and must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.

Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.

Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.

Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.

Case Approach

Scientific Methodology

We use best scientific approach to solve case study as recommended and designed by best professors and experts in the World. The approach followed by our experts are given below:

Defining Problem

The first step in solving any case study analysis is to define its problem carefully. In order to do this step, our experts read the case two three times so as to define problem carefully and accurately. This step acts as a base and help in building the structure in next steps.

Structure Definition

The second step is to define structure to solve the case. Different cases has different requirements and so as the structure. Our experts understand this and follow student;s university guidelines to come out with best structure so that student will receive best mark for the same.

Research and Analysis

This is the most important step which actually defines the strength of any case analysis. In order to provide best case analysis, our experts not only refer case materials but also outside materials if required to come out with best analysis for the case.

Conclusion & Recommendations

A weak conclusion or recommendations spoil the entire case analysis. Our expert know this and always provide good chunks of volume for this part so that instructors will see the effort put by students in arriving at solution so as to provide best mark.

Related Services


Business Finance Test 2(Problems)
1. A bond with 12 years to maturity has a semiannual interest payment of $ 35. If the bond
is currently selling for $ 890, a) what is the coupon rate b) what is the current yield and c) current yield to maturity.
2. What is the current price for a General Electric 6% corporate bond with 10 years to maturity if the market rate of interest for similar bonds is 7%? What would the current price be if the market rate of interest drops to 4%? What financial principal does this illustrate!
3. A thirty year corporate bond with twelve years remaining till maturity is currently selling for $ 1,088. The market rate of interest for a similar bond is 5.75%. What is the coupon (stated or contract) rate of interest.
4. Handy Dandy Inc is preparing to calculate its cost of debt. It presently has debt outstanding that pays $ 81 per year in interest and has seven years left unto maturity. The current market value of those bonds is $ 1,090. The company pays 35% in taxes. What is the after-tax cost of debt?
5. What should be the price of a preferred stock which pays a $ 3.00 dividend and has a yield of 7%? What should be the cost of preferred stock (k) which pays a $ 3.00 dividend and current market price of $ 36 ?
6. What should be the prices of the following preferred stocks if comparable securities yield
6.5%? Why are the valuations different?
a) Santa Fe Inc $ 2 preferred Stock ( $ 25 Par)
b) Cessna Inc $ 2 preferred ( $ 25 Par) with mandatory retirement in 5 years.
7. What is the net asset value of an investment company with $ 40,000,000 in assets,
$ 8,000,000 in liabilities and 4,000,000 shares outstanding?
8. ABC Technologies, Inc manufactures baseball bats. The bats currently sell for $ 65.00. The variable costs are $ 42.00 to manufacture and the fixed costs are $ 90,000. Determine the following:
a) Break even in units
b) Break even in dollars
c) If the company wishes to make $ 70,000 how many units must they sell.
d) If the company were to raise the selling price by 10% and reduce variable costs by 5%, what would be the new breakeven. (Fixed costs remain at $ 90,000)
e) The company spent an additional $ 14,000 for an extensive advertising campaign. If the
advertising campaign resulted in additional sales of 570 units, was the campaign profitable?
Note: I am expecting an actual dollar amount. Assume the original $ 65 selling price and
$ 42.00 variable cost.
Business Finance Test 2 (Problems)
9. Determine the Payback period, NPV and IRR for both project A and B (show answers). Which Project would you select and why? Be specific. Project A will require an initial investment of $ 200,000 and Project B will require and initial investment of $ 325,000. The cost of capital for both projects is 12%. The cash inflows for the next 5 years are listed below:

Project A Project B

0 ($ 200,000) ($ 325,000)
1 $ 50,000 $ 75,000
2 $ 80,000 $ ( 50,000) negative
3 $ 110,000 $ 160,000
4 $ 45,000 $ 100,000
5 $ 40,000 $ 190,000
10. Duster Inc the following capital structure:
Debt $ 900,000
Preferred Stock $ 100,000
Common Stock $ 1,000,000
Total Assets = $ 2,000,000
a) Determine the weight of each capital component.
b) If the interest rate on the debt before tax adjustment is 8% and the tax rate is 40% determine the cost of debt. Preferred dividends are $ 2.00 per share and preferred stock market price is $ 25. Determine the cost of preferred stock.
c) The common stock dividend is paying $ 3.00 and the price of the common is $ 20 with a growth rate of 5%. Determine the cost of common stock.
d) Using the figures you have calculated determine Duster Inc weighted average cost of
capital. (WACC)
Group Business Finance,
On the homework template, there is a slight error on Chapter 21 Problem 1 (c). The formula should be Common stock cash Dividend * ( 1 + g) / ( price of stock) + g The last “g” should not be contained within the bracket.
******Business Finance,
On the excel template for Chapter 7 Problem 22, there is one typing error in red. The Present Value (PV) and solution for Problem 22 should be $ 110,945.29. **********

Chapter 7   Problem 22  (Homework Guidance)
STEP 1 Using an excel worksheet, Type in the letters and numbers listed below
10% 4 ($35,000.00)       ? N/A
STEP 2 In the cell under PV (where the question mark is) Type the following:
STEP 3 The following should appear PV(rate,nper,pmt,fv,(type)
STEP 4 Follow excel instructions listed ie click on or type rate ie 10%,4,-35000,,)enter
STEP 5 The following answer $ 111,628.30 should appear for PV
10% 4 ($35,000.00) $110,945.29
Note: Please click on cell E17 to view the calculations.
The $ 110,945.29 is the present value of the investment
RATE= Interest Rate
NPER = Number of periods
PMT = the payments (more than 1)
PV = Present Value
FV = Future Value
10% 4    N/A       ? ($157,400.00)
$107,506.32 Present Value of $ 157,400 received in four years.
The $ 35,000 payments for four years is the better value.
Chapter 7 Problem 27 (Use same format)


Week Three Homework Guidance and Check Answers
Chapter 7 Problem 22 Page 131 textbook
a)Using excel software create the following table:
10% 4 $ 35,000 ? blank or 0
Next, use the following excel format instructions. Type the following in an excel cell =PV(
Excel will immediately give you the remaining formula to key in ie PV(rate, nper, pmt, (FV),type)
Insert the appropriate values by manually typing the amounts or by click on the cell containing the value. Remember to insert a comma “,” after each number is inserted. Since FV has no value insert a second comma after $ 35,000 as following $ 35,000,,
Ie Click on the excel cell containing 10% comma click on 4 comma click on $ 35,000 comma comma and enter.
Excel should generate the following answer PV = ($110,945.29). Remember to format using dollars to two decimal points.
10% 4 blank or 0 ? $ 157,400
Use same process as above; PV = ($ 107,506.32)
Please call me at 419 339 1404 if you do not obtain this answer before trying the next homework problem.
Chapter 7 Problem 27 Page 131 textbook
Future value of contributions
10% 8 -$1,000 blank or 0 ?
Future value of contributions = $ 11,436
Next, Determine value of terminal value
10% 40 blank or 0 -$11,436 ?
Twin 1 final terminal future value = $ 517,582

Twin 2 Future Value
10% 40 -$1,000 blank or 0 ?
Twin 2 final terminal future value FV = $ 442,593
Last step, is to solve for each twin’s withdrawal amount using the above terminal
Values as PV and solving for PMT.


a) The expected return is 12.5% (Use formula Expected return = (Probability(i) * return (i)) + (Probability (i2) * return (i2) + …..
b) The expected return is 14.7%
Chapter 9 Problems 10, 13 and 14 Page 210 (Ratios Review from accounting)
Equation are listed in the textbook. I also have attached a separate ratio file.
Chapter 11 Problem 3 Page 260
a) Use the following equation V = Do*(1+g) / ( k – g)
Stock A = $ 15.29 current pricemarket price for Stock A $ 23.00 (overvalued)
Stock B = ?

Stock C = /

Chapter 13 Problem 2 Page 291
10% 10 -$ 75 ? – $ 1,000

Remember PMT and FV are negative

Use excel format =PV(

PV = $ 846.39

Solve for b, c and d.
Chapter 13 Problem 6 Page 291

8% 8 – $ 100 ? – $ 1,000

PV = $ 1,114.93

The bond is overpriced and should not be purchased.
Chapter 14 Page 304

Year 01 Times dividend earned = 5.0 ie $ 5,000,000 / $ 1,000,000 Net income / Interest
Year 02 ?
Year 03 ?
Chapter 15 short answer essay
Chapter 16
Stock FV 20 years = $ 6,727.50 Stock FV for 30 years = $ 17,449.50

Bond FV 20 years = ? Bond FV 30 years
Chapter 17 Problem 5 a) ? b) ?


Business Finance

Liquidity Measures:

Working Capital = Current Assets – Current Liabilities

Current Ratio = Current Assets
Current Liabilities

Quick Ratio = Quick Assets
Current Liabilities

Activity Ratios:

Accounts Receivable Turnover = Net Sales
Average Accounts Receivable

Number of Days’ Sales In Receivables = Average Accounts Receivable
Average Daily Sales
Inventory Turnover = Cost of Goods Sold
Average Inventory
Number of Days’ Sales in Inventory = Average Inventory
Average Daily Cost of Goods Sold
Debt Ratios:
Fixed Assets to Long-Term Liabilities = Fixed Assets (Net)
Long-Term Liabilities
Liabilities to Stockholders Equity = Total Liabilities
Total Stockholders Equity
Times Interest Charges are Earned = (EBIT + Interest Expense)
Interest Expense
Survey of Accounting

Profitability Ratios:
Ratio of Net Sales to Assets = Net Sales
Average Total Assets (excluding long-term investments)
Rate Earned on Total Assets = (Net Income + Interest Expense)
Average Total Assets
Rate Earned on Stockholders Equity = Net Income
Average Total Stockholders Equity
Rate Earned on Common Stockholders Equity = (Net Income – Preferred Dividends)
Average Common Stockholders Equity
Earnings per share on Common Stock = (Net Income – Preferred Dividends)
Shares of Common Stock Outstanding
Price-Earnings Ratio = Market Price per Share of Common Stock
Earnings per Share on Common Stock

Dividends per Share = Dividends
Shares of Common Stock Outstanding
Dividend Yield = Dividends per share of Common Stock Market Price per Share of Common Stock

Cash flow / share = (Net income + depreciation) / common stock shares

Price / Cash flow = Market Price of common stock / Cash flow

Book Value per share = Shareholder’s equity / commons stock shares

Market to Book ratio = Market price of common stock / Book value per share

Homework Week four
Chapter 19   Problem 1  Page 379
Please complete the table
a) Quantity Total Variable Fixed Total Profits
Revenue Costs Costs Costs (Loses)
0 0.00 0.00 6,000.00 6,000.00 (6,000.00)
500 4,250.00 1,600.00 6,000.00 7,600.00 (3,350.00)
1000 8,500.00 3,200.00 6,000.00 9,200.00 (700.00)
b) estimate breakeven by utilizing the completed table
Compute breakeven in units and dollars using the break even or cost, volume, profit equations
BE (units) =   (Fixed Costs) / ( Selling price per unit – Variable Cost per unit)
c) ??? Complete if fixed costs are $ 10,000 instead of $ 6,000 using the BE(units formula)
Chapter 19 Problem 5 Page 381
Year Investment A Investment B Investment C
1 $2,000.00 $3,000.00 $500.00
2 $2,000.00 $2,000.00 $1,000.00
3 $2,000.00 $1,000.00 $3,000.00
4 $2,000.00 $500.00 $7,000.00
5 $2,000.00 $9,000.00
b) Does the ranking make intuitive sense?  Which is the best overall investment?


Finance – Accounting
Breakeven Analysis – Cost Volume Profit


1. Breakeven in Sales (Units) = Fixed Costs
Unit Contribution Margin

***Unit Contribution Margin = (Selling Price per unit – Variable Cost per unit)


2. Breakeven in Sales (Dollars) = Fixed Costs
Contribution Margin Ratio

***Contribution Margin Ratio = (Sales – Variable Costs)


3. Target Profit Sales (in Units) = ( Fixed Costs + Target Profit)
Unit Contribution Margin

4. Target Profit Sales (in Dollars) = ( Fixed Cost + Target Profit )
Contribution Margin Ratio

5. Margin of Safety (in Units) = Sales – Sales at Break even point

6. Margin of Safety (as a %) = (Sales – Sales at Break even point)

7. Operating Leverage = Contribution Margin
Income From Operations

High Low Method

Y = b + mX

Y = Total Fixed Costs and Variable Costs ie dependent variable
X = independent variable number of items produced or activity driver
b = Fixed costs; Y intercept
m = Variable Cost per unit; Slope of the line; or numerical coefficient of X

m = ( Y2 – Y1 )
( X2 – X1 )

Y2 = Highest Y Value
Y1 = Lowest Y Value

X2 = Highest X Value
X1 = Lowest X Value

Product Code -Finance-AW-Q42
Looking for Finance-AW-Q42 online,please click here