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Assume an average selling price of $547 per unit, a variable cost per unit of $339, a monthly interest rate of 1.1 percent, and a default rate of 3.1 percent. What is the NPV of extending credit for 30 days to all who are expected to become repeat customers?

Simple Foods has a zero coupon bond issue outstanding that matures in 14 years. The bonds are selling at 56 percent of par value. What is the company’s aftertax cost of debt if the combined tax rate is 23 percent? (Use semiannual compounding.)

The accounting manager of Gateway Inns has noted that every time the inn’s average occupancy rate increases by 3.3 percent, the operating cash flow increases by 4.6 percent. What is the degree of operating leverage if the contribution margin per unit is $47?

Lou Construction is looking at a new system with an installed cost of $411,500. This cost will be depreciated straight-line to zero over the project’s seven-year life, at the end of which the system is expected to be sold for $35,000 cash. No bonus depreciation will be taken. The system will save the firm $129,400 per year in pretax operating costs, and the system requires an initial investment in net working capital of $22,500. All of the net working capital will be recovered at the end of the project. The tax rate is 23 percent and the discount rate is 13.2 percent. What is the net present value of this project?

Highway Express has paid annual dividends of $1.32, $1.33, $1.38, $1.40, and $1.42 over the past five years, respectively. What is the average dividend growth rate?

More by Moore has a growth rate of 4.3 percent and its stock is currently selling for $31.88 per share. It is equally as risky as the market. The stock market has an expected return of 13 percent and an expected market risk premium of 11.55 percent. What is the expected rate of return on the stock?

A stock experienced returns of 5 percent, −17 percent, and 15 percent during the last three years. What is the standard deviation of the stock’s returns for the three-year period?

Character, Incorporated, is analyzing a proposed project that is expected to have sales of 2,450 units, ±8 percent. The expected variable cost per unit is $246 and the expected fixed costs are $309,000. Cost estimates are considered accurate within a ±3 percent range. The depreciation expense is $106,000. The sales price is estimated at $599 per unit, ±2 percent. What is the amount of the total costs per unit under the worst-case scenario?

The primary difference between a line of credit and a revolving credit arrangement is the:

Which one of the following is the most likely reason why a stock price might not react at all on the day that new information related to the stock’s issuer is released? Assume the market is semistrong form efficient.