C. contribution margin
D. net income
E. operating cash flow
Nelson's Interiors has $2.13 million in net working capital. The firm has fixed assets
with a book value of $23.23 million and a market value of $26.16 million. The firm has
no long-term debt. The Home Centre is buying Nelson's Interiors for $29.5 million in
cash. The acquisition will be recorded using the purchase accounting method. What is
the amount of goodwill that The Home Centre will record on its balance sheet as a
result of this acquisition?
A. $1.21 million
B. $3.34 million
C. $3.88 million
D. $4.14 million
E. $6.27 million
If a firm creates an interest rate collar on a variable rate loan, then the rate the firm pays
A. remain constant at the average of the floor and cap rates.
B. remain constant at the floor rate.
C. remain constant at the cap rate.
D. be higher than, or equal to, the cap but lower than, or equal to, the floor.
E. be higher than, or equal to, the floor but lower than, or equal to, the cap.
National Trucking has paid an annual dividend of $1.00 per share on its common stock
for the past fifteen years and is expected to continue paying a dollar a share long into
the future. Given this, one share of the firm's stock is:
A. basically worthless as it offers no growth potential.
B. equal in value to the present value of $1 paid one year from today.