Author: Anonymous

Assume you can exchange $1 for either £1 or €.50 in the U.S. In the London market, you can exchange £1 for €.52. This situation creates an opportunity to profit immediately from which one of the following?

A project will produce an operating cash flow of $31,200 a year for 7 years. The initial fixed asset investment in the project will be $206,900. The net aftertax salvage value is estimated at $62,000 and will be received during the last year of the project’s life. What is the net present value of the project if the required rate of return is 11 percent?

Which of the following factor(s) do not contribute to the increased risk of medication problems in the elderly? 

You are assessing a patient who was brought in by their caretaker. The patient is a non-verbal 25 year old male. The caretaker states that they noticed that his Right hand was swollen this afternoon. He states she is unsure of how the swelling occurred. Which of the following findings would be most indicative that the swelling is NOT traumatic in nature?

A 32 year old woman comes to the office and states that she has decreased hearing and pain in her L ear. She states it started when she got back from vacation in Spain. The patient has no pain or swelling of the external ear, no canal swelling. You visualize an erythematous bulging tympanic membrane on the affected side. What would her diagnosis be?

Asking about getting into trouble while using drugs or alcohol reflects:

An all-equity firm has a beta of 1.98. The firm is evaluating a project that will increase the output of the firm’s existing product. The market risk premium is 7.3 percent and the risk-free rate is 3.4 percent. What discount rate should be assigned to this expansion project?

Which one of the following statements related to mergers and acquisitions is correct?

XYZ stock is currently selling with an exercise price of $42 a share. One year from now the stock price is expected to be either $48 or $36 a share. The risk-free rate is 5%. What is the delta of this stock based on this one-year call option?

Delta Lighting has 30,000 shares of common stock outstanding at a market price of $15 a share. This stock was originally issued at $31 per share. The firm also has a bond issue outstanding with a total face value of $280,000, which is selling for 86 percent of par. The cost of equity is 13 percent while the after-tax cost of debt is 7.5 percent. The firm has a beta of 1.48 and a tax rate of 30 percent. What is the weighted average cost of capital?