East Coast Marina has 220,000 shares of stock outstanding. The current market value of
the firm is $18.92 million. The company has retained earnings of $3.8 million, paid in
surplus of $6.7 million, and a common stock account value of $220,000. The company
is planning a 3-for-2 stock split. What will the market price per share be after the split?
You are getting ready to prepare pro forma statements for your business. Which one of
the following are you most apt to estimate first as you begin this process?
A. fixed assets
B. current expenses
C. sales forecast
D. projected net income
E. external financing need
The Square Box is considering two projects, both of which have an initial cost of
$35,000 and total cash inflows of $50,000. The cash inflows of project A are $5,000,
$10,000, $15,000, and $20,000 over the next four years, respectively. The cash inflows
for project B are $20,000, $15,000, $10,000, and $5,000 over the next four years,
respectively. Which one of the following statements is correct if The Square Box
requires a 12 percent rate of return and has a required discounted payback period of 3.5
A. Both projects should be accepted.
B. Both projects should be rejected.
C. Project A should be accepted and project B should be rejected.
D. Project A should be rejected and project B should be accepted.
E. You should be indifferent to accepting either or both projects.