## Exam III Review II Questions

Use the following information for Questions 1 and 2:

A stock has a required return on 11 percent.  The risk-free is 7 percent, and the market risk premium is 4 percent.

1. What is the stock’s beta?
• 1.2
• 1.1
• 1.0
• 0.9

2. If the market risk premium increases to 6 percent, what will happen to the stock’s required rate of return?

• 6.00%
• 7.00%
• 11.00%
• 13.00%

## Finance Question Rate of Return Calculation

Question 5-12

Rate of Return

Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average stock is 13 percent, and the risk-free rate of return is 7 percent.  By how much does the required return on the riskier stock exceed the required return on the less risky stock.

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## Fundamentals of Capital Budgeting: Percolated Fiber Free Cash Flow

Fundamentals of Capital Budgeting: Percolated Fiber Free Cash Flow in \$2.50 only

You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops a consultant’s report on your desk, and complains, “We owe these consultants \$1 million for this report, and I am not sure their analysis makes sense. Before we spend the \$25 million on new equipment needed for this project, look it over and give me your opinion.” You open the report and find the following estimates (in millions of dollars):

All of the estimates in the report seem correct. You note that the consultants used straight-line depreciation for the new equipment that will be purchased today (year 0), which is what the accounting department recommended. The report concludes that because the project will increase earnings by \$4.875 million per year for ten years, the project is worth \$48.75 million. You think back to your halcyon days in finance class and realize there is more work to be done!

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In this assignment, we will learn how to buy a car and figure out whether it is priced at or below market value.

First, you need to decide on your budget which is the maximum you can spend on a car and that maximum number should take into consideration price, tax, registration, and fixing if needed.

Second, go to the web site: www.cars.com and search for a car in within your budget constraint.

Third, go to the web site: www.kbb.com (The Kelly Blue Book web site) and find out whether the car is at market value, overpriced, or under priced.

Finally, write a two page paper discussing your findings. Issues to explain or discuss:

• Why did you pick the car your picked?
• What are the 3 different prices that Kelly Blue Book provides?
• Based on Kelly Blue Book prices, is the car over or under priced?
• Any surprises, prior experience, feedback, thoughts…etc

Price of Answer: Just US\$ 15 only

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## Summary of MediSys Corp.: The IntensCare Product Development Team Summary

Write a one page summary of  HBR Brief case study ‘MediSys Corp.: The IntensCare Product Development Team’.

Please, also include the key points of this case study.

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## Regression, Beta, Standard Dev, Correlation and other Calculation for S&P500

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The assignment will be collected at the beginning of final exam. You should turn in the Excel
workbook for this assignment with your report.
1. Use http://finance.yahoo.com to obtain daily closing prices for your company. Use Excel to
calculate daily returns for the period January 1, 2010 – December 31, 2010. Calculate,
• Average daily return,
• Standard deviation of returns.
Repeat the analysis for the Dow Jones Industrial Average (DJIA). Ticker is ^DJI.
• Average daily return for your stock, yourstock R
• Standard deviation of daily returns, yourstock σ
• Average daily return for DJIA, DJIA R
• Standard deviation of daily returns on the DJIA, DJIA σ .

## Alpha, Beta and Fitted Line for Colgate-Palmolive (CL)

Case Study on page 447-448 within the Ross textbook

1.   Go to finance.yahoo.com and download the ending monthly stock prices for Colgate-Palmolive for the last 60 months. Use the adjusted closing price, which adjusts for dividend payments and stock splits. Next, download the ending value of the S&P 500 index over the same period. For the historical risk-free rate, go to the St. Louis Federal Reserve Web site  (www.stlouisfed.org) and find the three-month Treasury bill secondary market rate. Download this file. What are the monthly returns, average monthly returns, and standard deviations for

Colgate-Palmolive stock, the three-month Treasury bill. and the S&P 500 tbr this period?

2.   Beta is often estimated by linear regression. A model often used is called the market model, which is:

## Factors and Forces of Geological Features SCI/245

Choose a state or one of the following regions:

Region 1: Interior Plain

Region 2: Appalachian Highlands

Region 3: Rocky Mountain System

Region 4: Pacific Mountain System

Region 5: Atlantic Plain

Create a 12- to 15-slide PowerPoint® presentation for your selected state or region. Address the following in your PowerPoint®:

• Describe the various geologic events that have occurred in your region.
• Describe the geological features and various types of rocks that formed in the area (for example, mountains, craters, canyons, volcanoes, fault lines, or folds).
• Choose one of these geological features to research. What is the most prevalent rock type of the feature? Describe the mineral composition of the rock type.
• How old is your geologic feature? Estimate the absolute age of the geological feature, and discuss methods used to determine the age.
• What geologic event created your chosen geological feature? Discuss the process of plate tectonics related to the formation.
• Discuss the significance of igneous, sedimentary, and metamorphic rocks in your region.
• Discuss the type(s) of weathering and erosion processes that has most likely affected the physical appearance of your geological feature.
• Discuss any significant water, ocean, desert, or glacial feature(s) associated with your region, and the process involved with creating one of them.
• Discuss resources that are abundant in the region and the importance and economic value of this resource to the region or nation.
• In conclusion, discuss why you selected this geological feature for your PowerPoint® presentation.
• Include graphics
• Include details in speaker notes
• Use APA guidelines for citations and references

Price of Answer: Just US\$9 only

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## ACC 220: Week 8 Responsibility Centre Presentation with Speaker Notes

ACC 220: Week 8 Responsibility Centre Presentation with Speaker Notes in \$3 Only (Instant Download)

Imagine you have been selected by your manager to present a training session to a group of new employees. The new
hires do not have accounting backgrounds and have little or no work history in a responsibility center. The purpose of this training session is to explain the functions of each of the different responsibility centers.

• Develop a 10- to 12-slide Microsoft® PowerPoint® presentation that you could use as part of this training session.
• Explain what each of the different responsibility centers is and what each is accountable for and why each center has its own budget.
• Give an example of the kinds of decisions where incremental analysis would be used in each center.
• Include speaker notes for your presentation.
• Post your presentation as a Microsoft® PowerPoint® attachment.