3. A firm borrowed $1.8 million at 10% per year interest. If the firm repaid the loan in a one payment after 2 years, what was (a) the amount of the payment and (b) the amount of interest? Show up your calculations
Q: Silo Mills is an all-equity financed firm that has a beta of 1.18 and a cost of equity of 12.2…
A: Cost of equity refers to the cost incurred by the company for issuing new equity. When a company use…
Q: What is the future value of a $900 annuity payment over five years if interest rates are 8 percent?…
A: Future Value: The future value is the amount that will be received at the end of a certain period.…
Q: A stock is expected to pay dividends of $1.45 per share in Year 1 and $1.68 per share in Year 2.…
A: current value of the stock can be calculated using multi stage dividend discount method Share value…
Q: Revenue from the sale of ergonomic hand tools was P300,000 in years 1 through 4 and P465,000 in…
A: Sales; Year 1-4 = P300,000 Year 5-9 = P465,000 Interest rate = 0.10 Period = 9 years Present value…
Q: A 20-year loan of 20, 000 may be repaid under the following two methods: i. amortization method with…
A: given that: Loan Amount=20000 Loan period= 20 years The excel formula is:
Q: Why would a company's ROA be positive and its ROE negative
A: ROA refers to return on assets. ROE refers to return on equity.
Q: Hall Service Corporation is considering a project that will require $39,000 in net working capital…
A: Annual sales = $78500 Cash costs = $41000 Annual depreciation ($68000 / 4) = $17000 Tax rate = 0.25…
Q: and generates annual income of $300,000 for the next 4 years with a salvage value of $200,000. At…
A: Initial cost = 1000000 Salvage value = 200000 Life = 4 years Annual revenue = 300000 Tax rate = 40%…
Q: that today is December 31, 2021. Use the following information that applies to Harrison Corporation…
A: Corporate valuation approach use the free cash flow available and that is discounted on WACC and…
Q: Using the rule of 72, approximately how many years are needed to double a $100 investment when…
A: By the Rule of 72, the number of years taken to double the investment is computed as 72/ Rate. The…
Q: For an 11-year, $1,000 par value, 5.08% semiannual-pay bond currently trading at $921.41, calculate…
A: Modified duration helps in determining the price change in the bond for 1% change in interest rate.…
Q: 3. A project requires an initial investment of $1,000,000 and generates annual income of $300,000…
A: Present Worth Method: Cash flows of every elective will be decreased to time zero by assuming an…
Q: Suppose that your firm's current unlevered value, V*, is $800,000, and its marginal corporate tax…
A: Answer - Value of firm = Value of unlevered firm + PV(tax shield) - PV(cost of financial…
Q: Given the following spot and forward rates: Current 1-year spot rate is 3.12%. One-year forward…
A: A bond is a debt instrument used to raise capital by a company or government. It can be traded on…
Q: Suppose Watch-Over-Ya Corp's projected free cash flow for next year is FCF1 = $500,000 and FCF is…
A: Cash flow next year (FCF1) = $500,000 Growth rate (g) = 0.05 WACC = 0.082 Value of operations = ?…
Q: Bennett Company has a potential new project that is expected to generate annual revenues of $206.600…
A: Annual Operating Cash Flow: It is a measure of how much cash generated by a company's typical…
Q: A tractor was purchased for $74486 and at the bank interest rate of 4.67% per year. The residual…
A: Compound interest is interest charged on a loan or deposit. It is the most widely utilized idea in…
Q: A bond has a face value of ₱100, 000, 4-year maturity period, and 3.2% coupon. What is the total…
A: To calculate the total interest paid we will use the below mentioned formula Total interest paid =…
Q: Mr. Cruz borrowed P100,000 from BPI at a stated rate of 6% payable over a period of one-year. What…
A: Loan amount = P100,000 Interest rate = 0.06 Interest amount = P6,000 (i.e. P100,000 * 0.06)…
Q: The following statements relate to derivatives. Which of the following is FALSE? a. Swaps may have…
A: Options are contingent claims, while swaps and future contract are forward commitments. This implies…
Q: The common stock of Shepard Auto sells for $47.92 per share. The stock is expected to pay $2.28 per…
A: To calculate the market rate of return we will use following formula Market rate of return =…
Q: 6. Find the amount at the end of 15 years if P 55 000 is invested at an interest rate of 5%…
A: Initial investment (I) = ₱55,000 Interest rate for first 10 year = 0.05 Semiannual interest rate for…
Q: Given fixed costs is Rs 1,00,000 selling price per unit is Rs 10 and variable cost per unit is Rs 6.…
A: Since you have posted multiple questions, as per answering guidelines we shall be solving first…
Q: Calculating missing cash flow On the timeline below, what is the missing cash flow at time 2? The…
A: Future Value: It is the worth of a resource at a particular date which measures nominal future sum…
Q: uity X and Y provide the following payments: End of Year Y 1-10 1 K 11-20 2 21-30 1 K Annuity X and…
A: Annuity is a stream of constant regular payments.
Q: Income Statement Sales Costs Depreciation expense EBIT Interest expense EBT Taxes (21%) Net income
A: The net income is the income available after doing payments of all expenses including the interest…
Q: What would be your annualized discount rate% on the purchase of a 150-day Treasury bill for $4700…
A: The discount rate in a discounted cash flow analysis is the interest rate used to determine the…
Q: The following information was available for Concord Company at December 31, 2020: beginning…
A: Inventory turnover = cost of goods sold/Average inventory
Q: In 1999, the euro was trading at $0.82 per euro. If the euro is now trading at $0.99 per euro, what…
A: To calculate the percentage change in euro's value we will use following formula Percentage change…
Q: 3. Maricel borrows P 10 000 with interest at 15% compounded monthly. How much should she pay at the…
A: Final Amount (Principal+Interest) = P (1+r/n)nt Where P = Principal Amount r = rate of interest n =…
Q: Identify the types of bond being referred to in the following case: A P5,000,000-face value bond. It…
A: Given, P5,000,000-face value bond. It requires annual principal payment of P500,000 for ten years 1)…
Q: Schnussenberg Corporation's stock just paid a dividend of $1.60 a share (i.e., D0 = $1.60). The…
A: Current price of stock may be calculated using dividend discount method using following formula…
Q: Please use excel to provide the calculation and answer Using the margin facility for a short sale,…
A: Margin call price is when the margin taken from call price is runs low below the required minimum…
Q: t with the required rate of return of 11.2% provides annual cash flows of $2,810 during the years 1…
A: IRR of project is internal rate of return at which present value of cash flow is equal to initial…
Q: With a decrease in time preference, the supply of loanable funds will increase. Select one: True…
A: Loanable funds includes all forms of credit, such as loans, bonds, or savings deposits. There is an…
Q: The market portfolio's historical returns for the past three years were 10 percent, 10 percent, and…
A: Average market return = Sum of returns / number of returns Risk free rate of return = 0.04…
Q: duration __________ when maturity decreases. duration decreases when the coupon rate __________.…
A: The answer is option D. decreases/ increases/ increases duration decreases when maturity decreases…
Q: ABC Co. bought 1,000 CALL options of XYZ Corporation with a strike price of ₱52 at ₱2.75 per option.…
A: Exercise of option - Call option is a right to buy the stock at the strike price on expiry date, if…
Q: Calculate the capitalized cost of a project with a P3,000,000 beginning an extra P850,000 investment…
A: Capitalized cost would be present value of all cost that are going to occur in future course of time…
Q: Analysts projected that Apple will have earnings per share 2$. The industry has average PE ratio of…
A: To calculate the stock price we will use the following formula Price = Earning per share*PE Ratio…
Q: ABC Inc expects to have EPS (earning per share) of $5 in the coming year. The firms plan to pay all…
A: EPS next year = $5 All earning is paid as dividend, hence growth rate (g) = 0 Dividend next year…
Q: A 11-year, semiannual coupon bond sells for $938.52. The bond has a par value of $1,000 and a yield…
A: Price of the bond (P0) = $938.52 Maturity value of the bond (Z) = $1000 Semiannual yield to maturity…
Q: Suppose you bought a $1,000 face value bond with a coupon rate of 5.6 percent one year ago. The…
A: Real rate of return is the net actual return to the investor after adjustment of the inflation.…
Q: Describe a situation when a. Investor would want to use a limit order.
A: The limit order's primary objective is to set a specific price of a security in order to buy or sell…
Q: You are considering buying a Call Option on XYZ Company stock. XYZ Company stock is currently at $75…
A: Let S denote share price, P Payoff, u up-factor and d down-factor Share price after one year: S_u =…
Q: Data from The Economist BigMac index from January 2022 shows that the local price of a Big Mac in…
A: Purchasing power parity says that purchase power of both countries must be equal and exchange rate…
Q: Commercial mortgage backed securities (CMBS) backed by government-sponsored enterprises (GSEs)…
A: A term loan is a form of credit instrument in which money is lent to someone else in exchange for…
Q: What is the present value of an investment that pays $103 at the end of each of years 1, 2, and 3?…
A: Time value of money (TVM) refers to the method used to measure the amount of money at different…
Q: Parra Company completed its income statement and comparative balance sheet for the current year and…
A: Cash flow from operating activities consists of cash inflows and cash outflows that relate to day to…
Q: 2.You are considering an investment costing $300,000. If you want to recover the initial investment,…
A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…
Please answer fast please arjent help please answer
Step by step
Solved in 2 steps
- 1. Let's assume that a loan of $100,000 with an annual interest rate of 6% over 30 years pays monthly payments of $500. a. Calculate the accumulation rate b. Calculate the payment rate . c. Answer : How will the balance of the principal be at the end of the loan in relation to the original amount of the loan? Less, equal or greater? Provide calculations.What is the internal rate of return on a $3,000 loan to be repaid as $3,500 twoyears from now?Schlitz Inc. has obtained a 90-day bank loan of $10,000 with an annual interest rate of 15%, payable at maturity. Assume a 365-day year. a. How much dollar interest will the firm pay on the 90-day loan? : b. Find the 90-day interest rate on the loan
- Suppose you want to borrow $90,000 and you find a bank offering a 20-year loan with an APR of 5%. a. Find your regular payments if you pay n = 1, 12, 26, 52 times a year. b. Compute the total payout for each of the loans in part (a). c. Compare the total payouts computed in part (b). a. The payment for n = 1 would be $ The payment for n = 12 would be $ The payment for n = 26 would be $ The payment for n= 52 would be $ (Do not round until the final answer. Then round to the nearest cent as needed.)4. You loan from a loan firm an amount of $100,000 with a simple interest rate of 20% but the interest was deducted from the loan at the time the money was borrowed. If at the end of 1 year, you have to pay the full amount of $100,000, What is the actual rate of interest?Use the information below for the next two problems. Schlitz Inc. has obtained a 90-day bank loan of $10,000 with an annual interest rate of 15%, payable at maturity. Assume a 365-day year. a. How much dollar interest will the firm pay on the 90-day loan? : b. Find the 90-day interest rate on the loan.
- Consider a business loan maturing in three years that has three remaining annual payments in one, two, and three years. The annual payments are all equal to $2 Million. While analyzing the loan, you are using a YTM equal to 9%. Determine the duration of the loan. 1.94 O 2.00 O 1.91 O 3.00 O 1.83You have been assigned to estimate the interest rates that your company may have to pay when borrowing money in the near future. The following information is available.kPR = 2%MR = 0.1% for a 1 year loan increasing by 0.1% for each additional yearLR = 0.05% for a 1 year loan increasing by 0.05% for each additional yearDR = 0 for a 1 year loan, 0.2% for a 2-year loan, increasing 0.1% for each additional yearExpected Inflation Rates Year 1 = 7% Year 2 = 5% Year 3 and thereafter = 3% a. Calculate the inflation adjustment (INFL) for a 5-year loan. b. Calculate the appropriate interest rate for a 5-year loan.You have approached your bank for a 30 year mortage loan in the sum of $2,160,000. The bank has agreed to lend you the money at the annual rate of 6.32% a Caluate the montly repayment on this loan b Compute the interest payment for the first month of the loan based on the answer in a.
- a)loan of £16,000 is repaid by annual payments of £1,500 each at the end of the year. How long does it take to repay the loan on the basis of an interest rate of 4% p.a.? b)Suppose the payment at t=14 is increased to repay the loan (a balloon payment). What is the value of the payment at t=14? Enter an answer correct to 2 decimal places c)Alternatively, the loan may be repaid via a payment at t=15�=15 (a drop payment). What is the value of the payment at t=15? Enter an answer correct to 2 decimal places2B. a. Suppose we have a four year fixed-payment loan with $900 payments made at the end of each year. Given a market interest rate of 7 percent, how much was initially borrowed?1. Suppose you borrow $16,000. The interest rate is 9%, and it requires 4 equal end-of-year payments. Set up an amortization schedule that shows the annual payments, interest payments, principal repayments, and beginning and ending loan balances. Round your answers to the nearest cent. If your answer is zero, enter "0".
