The expected P/E multiple of ABC is 40 and the expected P/E multiple of XYZ is 8. Why are P/E multiples of the two stocks so different? 

The Hope Corporation has been presented with an investment opportunity which will yield end of year cash flows of: $80,000 per year in Year 1 $50,000 per year in Year 2 $60,000 in Year 3 This investment will cost the firm $100,000 today, and the firm’s required rate of return is 12 percent. What is the NPV for this investment? (Select the closest answer.)

Which of the following is a short-term debt instrument? 

Sarasota Inc. is considering a project that has the following cash flows: Year Cash Flow 0 -$1,200 1 400 2 300 3 700 4 500 The company’s cost of capital (discount rate) is 10%.  Does the company accept the project?

The current market price of ABC Corporation’s 12 percent coupon, 20-year maturity bonds is $1,200.00. Coupon is paid semiannually, and the par value is equal to $1,000. What is the YTM of the bond today?

The Lumber Company had the following balance sheet and income statement information. Balance  Sheet on December 2019: Cash $   120 A/R 900 Inventories 4,000 Total CA $5,020 Debt $3,000 Net Fixed Asset 2,980 Equity 5,000 Total Assets $8,000 Total Liability & Equity $8,000 Income Statement during 2019: Sales $10,800 Cost of goods sold 10,000 EBIT $        800 Interest (12%) 360 EBT $       440 Taxes (%40) 176 Net Income $        264 The industry days sales outstanding (DSO) is 16.  If management can improve the credit department and collection procedure sufficiently to reduce DSO to the industry average (16), how much cash could be freed up?  Assume that the sales level will remain constant.

You just purchased a new car and had to borrow $25,000.  According to the financing arrangement, you must repay the loan via 5 years of monthly payments at a nominal rate of 5.5%.  How much are each of those monthly loan payments?

You want to go to grad school 3 years from now, and you can save $5,000 per year, beginning immediately.  You plan to deposit the funds in a mutual fund which you expect to return 9% per year.  Under these conditions, how much will you have just after you make the 3rd deposit, 3 years from now?

A share of preferred stock pays an annual dividend of $10 per share. If investors require an 10 percent rate of return, what should be the price of this preferred stock?

Buner Corp’s outstanding bonds, which has a face value of $1,000, have 6 years remaining to maturity. The bond’s coupon rate of interest is 8%, and interest is paid semiannually. If investors require a rate of return equal to 12% to invest in similar risk bonds, what should be the market price of Buner’s bond?