FIN 3400

FIN 3400 Ch 10 SMARTBOOK - Complete Solutions (Verified) In the CAPM formula, what does the symbol RM stand for? Market rate of return If you buy a stock with a beta of 1.43 when the risk-free rate is 2.4 percent and the market rate is 8.7 percent, what is your expected rate of return? 11.41 percent Rationale: E(R) = 0.024 + 1.43(0.087 - 0.024) = 0.1141 = 11.41% If a stock has more market risk than the market portfolio and is overpriced, where will it plot on a security market line graph? To the...

FIN 3400 Ch 12 SMARTBOOK - Complete Solutions (Verified) In 4 years, an existing machine will have a zero book value and a market value of $4,200. A new machine costing $26,400 can replace this machine, lower variable costs by $8,200 a year, and have a market value of $13,300 and a zero book value in 4 years. The incremental depreciation is $5,300. The tax rate is 35%. What is the operating cash flow for year 4? $7,185 Rationale: OCF = ($8,200 - $5,300)(1 - 0.35) + $5,300 = $7,185 A firm purchas...

FIN 3400 Homework 3 Questions and Answers 2022- Florida International University/FIN 3400 Homework 3 Questions and Answers 2022- Florida International University/FIN 3400 Homework 3 Questions and Answers 2022- Florida International University/FIN 3400 Homework 3 Questions and Answers 2022- Florida International University/FIN 3400 Homework 3 Questions and Answers 2022- Florida International University/FIN 3400 Homework 3 Questions and Answers 2022- Florida International University

FIN 3400 Ch 8 SMARTBOOK - Complete Solutions (Verified) Assume you are computing P0, which is the current price of a stock. What discount factor will you use to discount the dividend in year 3? (1 + i)^3 Which one of these defines the current value of a stock? Discounted value of both the future dividends and the future stock price What is the disadvantage of a market order? The execution price is unknown in advance. A stock is expected to pay a dividend of $2 in year 2, $3 in year 3, and sell ...

FIN 3400 Quiz 2 Practice Questions and Answers- Florida International University/FIN 3400 Quiz 2 Practice Questions and Answers- Florida International University/FIN 3400 Quiz 2 Practice Questions and Answers- Florida International University/FIN 3400 Quiz 2 Practice Questions and Answers- Florida International University/FIN 3400 Quiz 2 Practice Questions and Answers- Florida International University

FIN 3400 Chapter 12 Assignment Questions and Answers- Florida International University What is pro forma analysis? Multiple choice question. Comparing the financial statements from one time period to another Ascertaining how an action would affect a firm's taxes Reviewing historical data to determine trends Estimation of future project cash flows using only the relevant parts of the financial statements What is an incremental cash flow? Multiple choice question. A cash flow that incre...

FIN 3400 Chapter 03 Assignment Questions and Answers- Florida International University The Shoe Store has cash of $300, accounts receivable of $700, accounts payable of $800, inventory of $1,300, long-term debt of $1,900, and notes payable in three months of $500. What is the current ratio? Multiple choice question. 2.14 2.88 1.77 0.72 Reason: Current assets = $300 + $700 + $1,300 = $2,300 Current liabilities = $800 + $500 = $1,300 Current ratio = $2,300/$1,300 = 1.77 Jen's has curr...

FIN 3400 Chapter 14 Assignment Questions and Answers- Florida International University Select all that apply Which of these can cause a firm to incur shortage costs? Select all that apply. Multiple select question. Granting too little credit to customers Being out of an inventory item Borrowing too much from suppliers Having too little cash on hand A firm should try to equal the marginal benefit of each dollar invested in net working capital with which one of these? Multiple choice que...

FIN 3400 Chapter 09 Assignment Questions and Answers- Florida International University True or false: A high-risk investment can underperform a low-risk investment over the short term. True false question. True False How is the term "dollar return" defined? Multiple choice question. Amount of profit or loss expressed as an annual rate Amount of profit or loss from an investment expressed as a percentage of the ending price Amount of profit or loss from an investment expressed in dolla...