A company estimates that it will need $169,000 in 16 years to replace a computer. If it establishes a sinking fund by making fixed monthly payments into an account paying 4.2% compounded monthly, how much should each payment be? The amount of each payment should be $ (Round to the nearest cent.)
Q: An investor wants to design a complete portfolio with an expected rate of return of 15% from two…
A: Portfolio return, risk and the optimal portfolio: The portfolio return is the sum of the products of…
Q: what if tax rate is 25% what would be answer
A: Given, Required return on stock is 12% Required return on bonds is 8% Tax rate = 25% Cost of Debt =…
Q: A high level of financial leverage exposes firms to default risk. However, as a result of it,…
A: Financial leverage is related to the capital structure of company and it is very important for the…
Q: The Bird Co. is considering a 7-year project that would require a cash outlay of $160,000 for…
A: Project Life is 7 years Initial cash outlay for Machinery is $160,000 Working Capital requirement is…
Q: Financial products go through a lifecycle as well; however, the stages of the product lifecycle for…
A: Financial products are intangible products that meet our financial needs. Examples of financial…
Q: (Expected rate of return and risk) Carter Inc. is evaluating a security. Given the information in…
A: PROBABILITY RETURN 0.1 6% 0.4 8% 0.4 10% 0.1 15%
Q: (Related to Checkpoint 9.1) (Floating-rate loans) The Bensington Glass Company entered into a loan…
A: Floating rate changes in every period depending on the reference point. When LIBOR is taken as a…
Q: Discuss any five criteria against which technology‐based projects would be selected.
A: Projects are evaluated based on the many factors and only based on various factors final selection…
Q: 1. Emily and Jimmy each make deposits of 150 at the end of each year for 30 years. Starting at the…
A: An annuity is a series of periodic payments that are paid for a lump sum amount that is paid. There…
Q: The Campbell Company is considering adding a robotic paint sprayer to its production line. The…
A: The NPV of a project is used to measure its profitability into account. It takes the concept of TVM…
Q: A Treasury STRIPS matures in 7 years and has a yield to maturity of 9.4 percent. Assume the par…
A: Treasury strips refer to the bonds that is to be sold at the fair value in the market and at the…
Q: A man inherited a regular endowment of P100,000 every end of 3 months for 10 years. However, he may…
A: Quarterly amount (P) = P100,000 Period = 10 Years Number of quarterly payments (n) = 10*4 = 40…
Q: Your client Ben is in his late 30s (married, with two kids) and working as a full-time doctor in ZZ…
A: Investment are important for better life but doing investment involves risk also so there should be…
Q: What are the monthly and quarterly rates equivalent to the 750% p.a. rate?
A: Given, Effective annual interest rate (EAR) = 750% per annum i) a) Simple Interest per month =…
Q: QUESTION 4 At the beginning of the year, a firm has current assets of $324 and current liabilities…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: (Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 6 percent…
A: Annual coupon amount = $1000 * 0.06 = $60 Purchase price = $1055 Maturity period = 12 years Maturity…
Q: Suppose a European call option to buy 1 euro for 1.40 CAD costs 0.08 CAD. The option maturity is in…
A: Strike price is 1.40 CAD Premium is 0.08CAD Forward rate is 1.50CAD Note: Ignoring time Value of…
Q: The degree of operating leverage (DOL) is interpreted as the ratio of the percentage change in net…
A:
Q: 5. Ten years ago, Amanda Cortez invested $20,000 in an account paying an annual interest rate of…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: eather is willing to invest $30,000 for six years, and is an economically rational investor. She has…
A: Simple interest is simple that is there is no interest on interest and only there is interest on the…
Q: 9. Implied interest rate and period Consider the case of the following annuities, and the need to…
A: Present Value of Ordinary Annuity refers to the concept which gives out the discounted or today's…
Q: Jane Austen purchased shares with a market price of $50 when the initial margin requirement was 70%.…
A: The initial margin requirement is the minimum amount of the shares that need to be paid to buy a…
Q: Determine the risk-neutral value of a eight-month European put option to sell a FLB (First Local…
A: We have to price the put option. We will use the Black Scholes Option pricing model. It's a fairly…
Q: A loan is to be paid by installments of $800 1-month from now, $600 3-months from now, and $500…
A: The concept of TVM states that money has an inherent interest-earning capacity which makes the money…
Q: Senyor Pigafetta borrowed today from Ginoong Lapulapu P300,000.00 and agreed to repay the loan with…
A: Loan amount (p) = P300,000.00 Monthly interest rate (r) = 0.01 (i.e. 0.12 / 12) Number of payments…
Q: involving investments, mortgages, loans, and so on are based on either a fixed or a variable in used…
A: Simple interest is simple in nature that means no interest on interest is there but in compounded…
Q: In 2016 Beth purchased a 10-year, 3.20% p.a. semi-annual paying coupon bond with a Face Value (FV)…
A: We will calculate the price of the bond with present value formula in excel. Just simply type =PV in…
Q: . An investor can invest money with a particular bank and earn a stated interest rate of 4.40%;…
A: Nominal interest rate is interest rate without compounding but effective rate is considered after…
Q: Problem 1 The Bird Co. is considering a 7-year project that would require a cash outlay of $160,000…
A: The company can discount cash flow methods to evaluate a project and whether to accept it or not.…
Q: Which of the following statements is not true about mortgages? O Mortgages are examples of amortized…
A: Mortgages are loans given to an individual to buy a property. These are usually long-term loans…
Q: The number of people living in a town is decreasing by 11% per year. if the current population is…
A: Here, To Find: Population in 13 years =?
Q: You are considering purchasing shares in a company that has a beta of 0.9. The average return for…
A: The risk-free rate means the investment that carries no risk and the returns provided by it refer to…
Q: The annual interest rate on a credit card is 13.99%. If the minimum payment of $30 is made each…
A: Annuity refers to the equal cash flow at a regular interval over a defined period. If the cash flows…
Q: In 10 years, P20,000.00 will be needed to pay for a building renovation. To generate the sum,…
A: Amount required after 10 years (FV) = P20,000.00 Number of payments in sinking fund (n) = 3 Interest…
Q: Joe is a plumber and has 50,000 in revenue for the year. What can you definitely conclude? Joe…
A:
Q: t more difficult to maintain a short position than a long position. True or false? Explain your ans
A: There are two methods in the stock market one is to go long in the market and other is you go short…
Q: 3. The maker of cardboard boxes leases a warehouse and pays $7,000 at the beginning of each month…
A: Note: Hi! Thank you for the question, As per the Honor code, we are allowed to answer one question…
Q: What exactly are the effects of choosing the wrong indexing strategy?
A: Index-It is a yardstick that used to measure the performance of a stock or portfolio against certain…
Q: Identify whether the following statements about the simple and compound interest methods are true or…
A: 1) TRUE Compound Interest = Present Value * (1 + Interest rate)n Simple Interest = PV + (PV *…
Q: 2. Discounted Payback (DCPB) and IRR evaluations. Use the cash flow situation (table below) to…
A: MARR = 0.04 or 4% Discounted payback period is the period required to recover a project's initial…
Q: What are the two types of Financial Risk? What is the risk-return tradeoff?
A: Risk The instabilities in portfolio values are known as investment risk. The level of risk depends…
Q: Maple Aircraft has issued a 4¾% convertible subordinated debenture due 3 years from now. The…
A: Conversion Value The amount received by the holder of convertible security when he/she converts the…
Q: (Related to Checkpoint 9.3) (Bond valuation) Calculate the value of a bond that matures in 12 years…
A: Par Value = $1,000 Time Period = 12 Years Coupon Rate = 14% Yield = 15%
Q: Felix is keen to apply his finance knowledge to his real-life investment goals. He is currently 19…
A: As per the given information: Future value of contribution made by Felix - $5,000,000Investment made…
Q: You have just won a lottery that promises an annual payment of $120000 beginning immediately. You…
A: Present Value Present value is the current value of tomorrow's money at a specified rate of return…
Q: 33- A citizen annually deposits the amount of R$1,000.00 at the end of each calendar year, in a bank…
A: Solution:- When an equal amount is deposited each period at end of period, it is called ordinary…
Q: A man wants to set up a 529 college savings account for his granddaughter. How much would he need to…
A: An annuity is a contract where a fixed amount is paid periodically. It is used to help investors…
Q: 1) Calculate the present worth (P+) of the given cash flow, i= 10% 0 A- $100 3 $150 6 $200 7 $250 8…
A:
Q: John Doe buys 125 shares of Microgen Inc. at $35 a share and holds the stock for a year. Patricia…
A: The margin purchase of stocks refers to the practice of borrowing from a broker and then using the…
Q: A B E H J K M N 3. What price should the municiple bond trade at in order to have a YTM 70 basis…
A: Yield to Maturity "YTM" is the rate which investors expect on a bond when it is held till maturity.…
Step by step
Solved in 3 steps with 3 images
- Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?If a production machine costs $18,000, and we are able to set up the following payment arrangements with the bank: Number of payments = 4 (one at the end of each year) Interest Rate = 5% Amount of each annual payment = $5,000 Questions: What is the present value of the stream of cash flows (the series of payments)? Will we be provided with enough purchasing power at the present time to be able topurchase the machine?A company wants to have $30,000 at the beginning of each 6-month period for the next 4 1/2 years. If an annuity is set up for this purpose, how much must be invested now if the annuity earns 6.42%, compounded semiannually? (b) Solve the problem. (Round your answer to the nearest cent.)$ _____
- A company makes fixed annual payments to a sinking fund to replace equipment in five years’ time. The equipment is valued at £200,000 and interest rates are 10%. How much should each payment be? How would these payments change if the company could put an initial £20,000 into the fund?Suppose you wish to purchase a factory that will yield an annual return of $12,000 for 12 years, after which the factory will have no value. You want to earn 8.25% annually on your investment and also set up a sinking fund to replace the purchase price. If money is placed in the fund at the end of each year and earns 4.2% compounded annually, how much should you pay for the factory? a) $81,921 b) $81,487 C)O $80,487 $80,921 e) O $82,487 Boş bırak Cevap Listesi KÖnceki 2/12 Sonraki> КарatWhat will be the equivalent uniform annual amount that will be deposited in a bank for 15 years that will be replaced the capitalized cost of a project with the following cost; The initial cost is P2,000,000 and an additional cost of P500,000 at the end of every 5 years. The annual operating costs are P100,000 at the end of every year for the first 6 years and P160, 000 thereafter. In addition, there is expected to be a major repair work cost of P300, 000 every 13 yrs. Assume i =15%.
- Jane Doe plans to make twelve end-of-month payments of $18,000 each on a short term investment account. The account earns a monthly interest rate of 2.5%. a. What is the present worth (i.e., Po) of these payments? b. Repeat Part (a) but assuming that they are beginning-of-month payments. a. The present equivalent of the payments is $ nearest dollar.) b. The present equivalent of the payments is $ nearest dollar.) (Round to the (Round to theA company wants to have $20,000 at the beginning of each 6-month period for the next 4years. If an annuity is set up for this purpose, how much must be invested now if the annuity earns 6.31%, compounded semiannually? (a) Decide whether the problem relates to an ordinary annuity or an annuity due. ordinary annuityannuity due (b) Solve the problem. (Round your answer to the nearest cent.)A loan of P30,000 is to be repaid monthly for 5 years that will start at the end of 4 years. If interest is 12% converted monthly, how much is the monthly payment? (Draw the cash flow diagram; indicate the artificial payments and the actual payments.)
- A loan of $77,800 is due 10 years from today. The borrower wants to make annual payments at the end of each year into a sinking fund that will earn compound interest at an annual rate of 10 percent. Required: a. What will the annual payments have to be? Note: Do not round intermediate calculations and round your final answer to the nearest whole dollar amount. b. Suppose the investor makes the payments monthly instead. How much would they need to pay each month? Note: Do not round intermediate calculations and round your final answer to 2 decimal places. c. If payment was made by making monthly payments with monthlyThe Omega Venture Group needs to borrow to finance a project. Repayment of the loan involves payments of $2,740at the end of every six months for six years. No payments are to be made during the development period of nine years. Interest is 4% compounded monthly. (a) How much should the Group borrow? (b) What amount will be repaid? (c) How much of that amount will be interest?An Investment project has annual cash inflows of $4,500, $3,800, $5,000, and $4,200, for the next four years, respectively. The discount rate is 15 percent. a. What is the discounted payback period for these cash flows if the initial cost is $5,600? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the discounted payback period for these cash flows if the initial cost is $7,700? (Do not round Intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the discounted payback period for these cash flows if the initial cost is $10,700? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a, Discounted payback period years b. Discounted payback period years Discounted payback period years C.