Assignment 04 bu440 financial management ii directions: be sure to
BU440 Financial Management II
Directions: Be unfailing to secure an electronic representation of your response antecedently submitting it to Ashworth College for grading. Unless incorrectly formal, response in thorough sentences, and be unfailing to use chasten English, spelling, and rhetoric.
Respond to the items under.
Part A: Absorb of Debt
Kenny Enterprises has exact issued a security behind a while a par treasure of $1,000, twenty years to ripeness, and an 8% coupon reprove behind a while semiannual payments.
a. What is the absorb of something-due for Kenny Enterprises if the security sells at the behindcited worths?
b. What do you attend-to about the worth and the absorb of something-due?
Part B: Comparing NPV and IRR
Chandler and Joey were having a argument about which financial type to use for their new transaction. Chandler supports NPV and Joey supports IRR. The argument starts to get fervent when Ross steps in and states, “Gentlemen, it doesn’t subject which process we prefer, they afford the identical response on all projects.”
a. Is Ross chasten?
b. Under what three (3) conditions accomplish IRR and NPV be agreeing when accepting or rejecting projects?
Part C: Genesis Specie Outflow
The Creative Products Corporation produces its products two months in walk of anticipated sales and ships to treasury centers the month antecedently sale. The list insurance accumulation is 15% of the anticipated month’s sale. Beginning list in October 2009 was 120,000 parts. Each part absorbs $1.50 to construct. The medium selling worth is $2.50 per part. The absorb is made up of 60% strive, 30% materials, and 10% shipping (to treasury). Strive is remunerated the month of genesis, shipping the month behind genesis, and raw materials the month foregoing to genesis. What is the genesis specie outflow for the month of October 2009 genesis, and in what months does it supervene? Assume that the sales prevent for December 2009 is $2,500,000.