Finance Answers

Various concepts associated with money

(1).Is dividend policy a type of financial decision or it is a type of investment decision? Explain

(2).as the company's financial manager would you recommend to the board of directors that the company adopt a stable dividend payment per share or a stable dividend pay out ratio?

What are the disadvantages of each?

A company sources of long term funds include bonds, preferred stock and common stock. Identify some financing risks associated with these sources and explain how these risks affects the return expected from investments financed by these sources.

Discuss the steps of performing trend analysis on the financial statements of any

company.

Download the Balance sheet of any company of your interest from the open sources.

Perform the comparative analysis of that Balance sheet and discuss your findings.

Hint to attempt: to choose a company from open source- type the name of the company

in the web page.

Download the annual report as available, latest. Identify the relevant data, and then

perform comparative analysis of Balance Sheet of the company

A worldwide cosmetics company can upgrade the quality of one of its products by

purchasing new equipment at a cost of K155,000. The new equipment would replace

old equipment that has a current market value of K23,000. The old equipment originally

cost K180,000 and was three quarters depreciated. If the old equipment was used for

an additional 12 years, its salvage value at that time would be K5,000. The new

equipment has an expected life of 12 years. Its salvage value is estimated at K30,000.

By upgrading the quality of this product, the company would be able to increase the sale

price. As a result, the operating income before tax will increase by K20,000 per year for

the first 3 years, and by K25,000 per year during the last 9 years.

The company’s tax rate is 40% and its cost of capital after tax is 15%. Depreciation is

on straight line basis.

Required

Compute the net present value (NPV) and the internal rate of return (IRR)

Mary is having a yard sale and is willing to sell a painting if she gets at least $2, buts she has not marked a price on it. John is at her sale and willing to pay up to $100 for this painting. What can economic theory tell us about the price that will result? Choose the ONE most correct answer and provide a reason for your answer.                                                          

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2.1 Discuss the stages of a financial crisis in an emerging economy.

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2.2 Explain how a financial crisis may be prevented in the emerging economies

Evaluate in detail, why it is important for product managers to understand and track the price, income and cross‐price elasticity of demand of their products.

When the price of a product increases by 6% and the quantity demanded of the product changes from 1 400 to 1 200, what is the price elasticity of demand of the product? (Ignore the negative sign and round off to 2 decimal places)