A project has the following cash flows:
Project Cash Flows | |
Time (yrs) | Cash flow ($) |
0 | -400 |
1 | 0 |
2 | 500 |
What is the payback period of the project in years?
Normally cash flows are assumed to happen at the given time. But here, assume that the cash flows are received smoothly over the year. So the $500 at time 2 is actually earned smoothly from t=1 to t=2.
Read the following financial statements and calculate the firm's free cash flow over the 2014 financial year.
UBar Corp | ||
Income Statement for | ||
year ending 30th June 2014 | ||
$m | ||
Sales | 293 | |
COGS | 200 | |
Rent expense | 15 | |
Gas expense | 8 | |
Depreciation | 10 | |
EBIT | 60 | |
Interest expense | 0 | |
Taxable income | 60 | |
Taxes | 18 | |
Net income | 42 | |
UBar Corp | ||
Balance Sheet | ||
as at 30th June | 2014 | 2013 |
$m | $m | |
Assets | ||
Cash | 30 | 29 |
Accounts receivable | 5 | 7 |
Pre-paid rent expense | 1 | 0 |
Inventory | 50 | 46 |
PPE | 290 | 300 |
Total assets | 376 | 382 |
Liabilities | ||
Trade payables | 20 | 18 |
Accrued gas expense | 3 | 2 |
Non-current liabilities | 0 | 0 |
Contributed equity | 212 | 212 |
Retained profits | 136 | 150 |
Asset revaluation reserve | 5 | 0 |
Total L and OE | 376 | 382 |
Note: all figures are given in millions of dollars ($m).
The firm's free cash flow over the 2014 financial year was:
Which of the below formulas gives the profit ##(\pi)## from being long a put option? Let the underlying asset price at maturity be ##S_T##, the exercise price be ##X_T## and the option price be ##f_{LP,0}##. Note that ##S_T##, ##X_T## and ##f_{LP,0}## are all positive numbers.
Question 704 utility, risk aversion, utility function, gamble
Mr Blue, Miss Red and Mrs Green are people with different utility functions.
Each person has $256 of initial wealth. A coin toss game is offered to each person at a casino where the player can win or lose $256. Each player can flip a coin and if they flip heads, they receive $256. If they flip tails then they will lose $256. Which of the following statements is NOT correct?
Being long a call and short a put which have the same exercise prices and underlying stock is equivalent to being:
Question 852 gross domestic product, inflation, employment, no explanation
When the economy is booming (in an upswing), you tend to see:
Question 898 comparative advantage in trade, production possibilities curve, no explanation
Adam and Bella are the only people on a remote island. Their production possibility curves are shown in the graph.
Assuming that Adam and Bella cooperate according to the principles of comparative advantage, what will be their combined production possibilities curve?
To receive the dividend you must own the stock when the market closes on which date?