Miller Stores has an overall beta of 1.38 and a cost of equi…

Miller Stores has an overall beta of 1.38 and a cost of equity of 12.7 percent for the company overall. The firm is all-equity financed. Division A within the firm has an estimated beta of 1.52 and is the riskiest of all of the company’s operations. What is an appropriate cost of capital for Division A if the market risk premium is 7.4 percent?

Gifts For All has projected sales for next year of: Q1…

Gifts For All has projected sales for next year of: Q1 Q2 Q3 Q4 Sales $ 22,800 $ 25,000 $ 30,100 $ 39,300 Purchases are equal to 58 percent of next quarter’s sales. Each month has 30 days, the accounts receivable period is 29 days, and the accounts payable period is 32 days. How much will the company pay suppliers in the third quarter?

Bretz Baskets would like to offer a special product to its b…

Bretz Baskets would like to offer a special product to its best customers. However, the firm wants to limit its maximum potential loss on this product to the firm’s initial investment. The fixed costs are estimated at $3,600, the depreciation expense is $870, and the contribution margin per unit is $6.89. What is the minimum number of units the firm should pre-sell to ensure its potential loss does not exceed the desired level?

A project will require spending $2,300,000 on new fixed asse…

A project will require spending $2,300,000 on new fixed assets that will be depreciated on a straight-line basis to a value of zero over five years, at which point the assets will be worthless. The project involves selling new products for $36,000 per unit, with a variable cost of $22,000 per unit. Annual fixed costs are expected to be $425,000. The company uses a 20 percent discount rate. What is the financial break-even point?