FIN 540 – Homework Chapter 25  © 2013 Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. FIN 540 Homework Chapter 25    Page 1 of 2   Directions: Answer the following five questions on a separate document. Explain how […]

This is a written assessment requiring you to examine and propose a supportable resolution to a specified financial management problem of your choosing. More specifically, you are to identify and assess possible alternative resolutions, comparing and contrasting the pros and cons of each within the specified scenario to justify the preferred outcome. You need seek out and receive the approval of the financial management problem […]

A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 45% of sales. Indirect incremental costs are estimated at $95,000 a year. The project requires a new plant that will cost a total of $1,500,000, which will be […]

It is May 1985 and UAL, Inc., parent of United Airlines, needs to borrow 0 million to finance the purchase of Hertz.  You are Assistant Treasurer and must make a recommendation about the choice between borrowing in the USA in U. S. Dollars or in Japan in Yen (¥).  As background, UAL, Inc. owns United Airlines and Westin Hotels.  It is buying Hertz from RCA.  […]

Assignment 1: Partnership vs. Corporation Due Week 9 and worth 240 points  Use the partnership and corporate tax returns for the practice sets titled, “Walk Upright Company” and “No More Ice, Inc.” that were prepared in Weeks 4 and 7.  Write a four to five (4-5) page paper in which you: 1. Compare and contrast the advantages and disadvantages inherent in electing to become a […]

The finance department of a large corporation has evaluated a possible capital project using the NPV method, the Payback Method, and the IRR method.  The analysts are puzzled, since the NPV indicated rejection, but the IRR and Payback methods both indicated acceptance. Explain why this conflicting situation might occur and what conclusions the analyst should accept, indicating the shortcomings and the advantages of each method.  […]

Choose a publicly traded company and find its annual report (10K) on www.sec.gov. Scroll down to the area called “Filings and Forms” and click on “Search for Company files” and then click on “Company or fund name. . .” It’s probably the easiest to search by the company’s ticker symbol, but you can also use the company’s name. Once you find the company, then find […]

Corporations often use different costs of capital for different operating divisions. Using an example, calculate the weighted cost of capital (WACC). What are some potential issues in using varying techniques for cost of capital for different divisions? If the overall company weighted average cost of capital (WACC) were used as the hurdle rate for all divisions, would more conservative or riskier divisions get a greater […]

The finance department of a large corporation has evaluated a possible capital project using the NPV method, the Payback Method, and the IRR method.  The analysts are puzzled, since the NPV indicated rejection, but the IRR and Payback methods both indicated acceptance. Explain why this conflicting situation might occur and what conclusions the analyst should accept, indicating the shortcomings and the advantages of each method.  […]

3.1 Excellent description of forward contracts. Forward contract can be for currency exchange, supply chain, commodity prices, and more. Merna, AL-Thani  (2008, p 222) “In response to the increased foreign exchange risk, the market provided forward contracts on foreign exchange, foreign exchange futures (in1972), currency swaps (in 1981), and options on foreign exchange (in1982).” This strategy provided some risk mitigation as we expanded into the global economy.