Chip’s Home Brew Whiskey management forecasts that if the firm sells each bottle of Snake-Bite for $20, then the demand for the product will be 15,000 bottles per year, whereas sales will be 94 percent as high if the price is raised 16 percent. Chip’s variable cost per bottle is $10, and the total fixed cash cost for the year is $100,000. Depreciation and amortization […]

Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $11.90 million. This investment will consist of $2.20 million for land and $9.70 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years at […]

Read the Case Campbell Soup Co. v. Wentz in the text. Answer the following questions:  1.    What were the terms of the contract between Campbell and the Wentzes?2.    Did the Wentzes perform under the contract?3.    Did the court find specific performance to be an adequate legal remedy in this case?4.    Why did the court refuse to help Campbell in enforcing its legal contract?5.    How could […]

Critical Analysis Paper  Give an example of a contract that you or someone you know entered into (for example, rental agreement, cell phone agreement, property purchase or lease—car, home, furniture, etc.; home or car repair, student loan agreement).   Apply the five essential elements of an enforceable contract to your example and answer the following questions: 1.    Was the contract successfully fulfilled? 2.    Was there a breach […]

Present and Future Values, and Expected ReturnsWe examined two important topics in finance this week: (a) present and future values and (b) security valuation. Critically reflect on the importance of present and future values.  What factors must be considered when calculating present and future values? What other qualitative factors play into present and future value decisions? Perhaps you have opportunities in your professional life to […]

Capital Co. has a capital structure, based on current market values, that consists of 39 percent debt, 18 percent preferred stock, and 43 percent common stock. If the returns required by investors are 11 percent, 11 percent, and 19 percent for the debt, preferred stock, and common stock, respectively, what is Capital’s after-tax WACC? Assume that the firm’s marginal tax rate is 40 percent. (Round intermediate […]

Track and record all of your expenditures for the next month (January 21st – February 21st). Use the Daily Spending Diary on p. C-2ff of the textbook to record your transactions Write a one-page summary of your spending habits for the month. You don’t have to be specific, but note any spending patterns that surprised you. Did you spend more than you thought on certain items? Did you […]

1)            Archer Daniels Midland Company is considering buying a new farm that it plans to operate for 10 years. The farm will require an initial investment of $11.90 million. This investment will consist of $2.00 million for land and $9.90 million for trucks and other equipment. The land, all trucks, and all other equipment is expected to be sold at the end of 10 years […]

Assignment 2: LASA 1—Genesis Cash Budget Report The Genesis operations management team is now preparing to implement the operating expansion plan. Previously the firm’s cash position did not pose a challenge. However, the planned foreign expansion requires Genesis to have a reliable source of funds for both short-term and long-term needs. One of Genesis’s potential lenders tells the team that in order to be considered […]

When the Genesis and Sensible Essential teams held their weekly meeting, the time value of money and its applicability yielded an extremely stimulating discussion. However, most of the team members from Genesis were very perplexed. Sensible Essentials decided the most expedient way to demonstrate how interest rates as well as time impact the value of money was to use examples. You have been asked to […]