ANSWER THE FOLLOWING QUESTIONS 6

1.Here is a book balance sheet for Duane S. Burg Associates. Figures are in millions.
Unfortunately the company has fallen on hard times. The 6 million shares are trading for only $4 apiece and the market value of its debt securities is 20 percent below the face (book) value. Because of the companys large cumulative losses it will pay no taxes on future income. Suppose shareholders now demand a 20 percent expected rate of return. The bonds are now yielding 14 percent. What is the weighted-average cost of capital?
2.Calculate WACC for Burg Associates (Data given in Question no. 1) company face a 35 percent corporate income tax rate.
3. What is the basic difference between sensitivity analysis and scenario analysis?
4.Consider a firm operating a copper mine that incurs both variable and fixed costs of production. Suppose the mine can be shut down temporarily if copper prices fall below the variable cost of mining copper. Why is this a valuable operating option? How does it increase the NPV of the mine to the operator?

Herman Goldstein
Answer the following questions:
Part A:
The selection from Policing a free society has
six sections, as follows:
1. Directing Police Agencies through the
Political Process
2. The Basic System and the Problems It Presents
3. Various Administrative Arrangements for
Achieving Accountability
4. Emergence of Police Autonomy as a Virtue
5. Recent Developments Pointing to Inadequacies
in the Present System
6. Essential Elements for Achieving Greater
Accountability
For this assignment you must write the one main
idea in each section of the reading. Section titles are useful clues for
determining what is the main idea in a section. If there are several ideas in a
section, choose the one which is the most important. Limit this exercise to ideas
which explain why something happened or why something is so. For this exercise
do not look for ideas which are comparisons or ideas which are mental
inventions. Stick to ideas which explain something.
Each idea should be stated in just one sentence.
It is more likely to be an “idea” if the word “because” appears around the
middle of the sentence.