You’ve observed the following returns on Pryor Farm Produce stock over the past five years: 8 percent, −5 percent, 16 percent, 12 percent, and 8 percent. What is the variance of these returns?

Black Guard Security has annual sales of $355,000 and a collection period of 19.93 days. What is the company’s average balance in accounts receivable? Assume 365 days per year.

What is the standard deviation of the returns on a $30,000 portfolio that consists of Stocks S and T? Stock S is valued at $18,000. State of Economy Probability of State of Economy Rate of Return if State Occurs Stock S Stock T Boom .05 .11 .09 Normal .85 .08 .07 Bust .10 −.05 .04

Wholesome Breads uses specialized ovens to bake its bread. One oven costs $490,000 and lasts 15 years before it needs to be replaced. The annual operating cost per oven is $18,000. If the required rate of return is 17 percent, what is the equivalent annual cost of an oven?

GPR, Incorporated, has an inventory turnover of 18.96 times, a payables turnover of 11.19 times, and a receivables turnover of 8.26 times. What is the length of the company’s cash cycle? Assume 365 days per year.

If a firm experiences _____, it makes sense to offer a longer credit period to customers.

The Green Fiddle is considering a project with sales of $86,800 a year for the next four years. The profit margin is 6 percent, the project cost is $97,500, and depreciation is straight-line to a zero book value over the life of the project. The required accounting return is 10.8 percent. This project should be _____ because the AAR is _____ percent.

A project has average net income of $4,720 per year over its 4-year life. The initial cost of the project is $63,000 which will be depreciated using straight-line depreciation to a book value of zero over the life of the project. The firm set a minimum average accounting return of 11.65 percent. The firm should _____ the project because the AAR is _____ percent.

The Well Derrick has 6.3 percent preferred stock outstanding that sells for $57 per share. This stock was originally issued at $45 per share and has a stated value of $100 per share. What is the cost of preferred stock if the relevant combined tax rate is 23 percent?

Myers Storage purchased a parcel of land four years ago at a cost of $112,600. Today, the land has a market value of $136,600. At the time of the purchase, the company spent $8,400 to grade the land and another $11,500 to install electrical access. The company now wants to build a new facility on the site at an estimated cost of $522,700. What amount should be used as the initial cash flow for this project?