Q: be greater than 40.00. The risk-free rate is 4%. Calculate the price of a one-year European call…
A: European call can be exercised on the expiration of call option unlike the American call option…
Q: Mantle Corporation is considering two equally risky investments: ∙ A $5,000 investment in…
A: Investor shall be indifferent when the return on both the investment shall be equivalent.
Q: expected return and volatility (
A: Expected return refers to the profit or loss that an investor should earn from an investment that…
Q: Given recent evidence concerning the CAPM, which of the following portfolios might be expected to…
A: An asset that plots above the SML is considered an undervalued asset as it provides a return larger…
Q: Stock Z has the following returns for last five years. Calculate the arithmetic average return and…
A: Arithmetic Average Return refers to the concept which is appropriate for a shorter period of time.…
Q: a. Use the appropriate formula to find the value of the annuity. b. Find the interest. Periodic…
A: Monthly payment (M) = $80 r = 7% per annum = 7%/12 per month = 0.5833% per month n = 35 years = 420…
Q: total amount in Fund A and Fund B after 10 years.
A: Funds refer to the pool of money which should be kept aside for some specific or special purpose.…
Q: 3
A: A discounted payback time is a corporate finance method for determining a project's profitability.
Q: You have S10,000 to invest for 90 days. Current spot rate: $1.32/£. The 90-day forward rate is…
A: Forward rate = [Spot rate * (1 + domestic interest rate) ]/ (1 + foreign interest rate).
Q: Consider a bond with a coupon rate of 8% and a yield to maturity of 5%, will this bond sell for…
A: Current Market price of the bond is calculated using Financial Calculator Assuming, Face value of…
Q: 16. Jolynn had an average daily balance of $415.22 on his May credit card statement. The bill showed…
A: The finance charge will depend upon the APR and the time period for which the balance was due.
Q: The future value of the account with interest compounded annually is The account earns $____ (what…
A: Future Value: It is the future worth of a present sum of amount and is calculated by the product of…
Q: (a) Although the sharing of business profit by a person is prima facie evidence of partnership, yet…
A: Partnership is defined as the formal arrangement through the two or more parties with the purpose to…
Q: There are two LBO funds set up for ten years with $1 billion committed capital each. Fund A has the…
A: Two LBO Funds - 10 years with $1 Billion Capital each Fund A - Constant management Fee = 2% and…
Q: Find the savings plan balance after 15 months with an APR of 2% and monthly payments of $100
A: Future Value of Annuity: It represents the future worth of the current stream of cash flows and is…
Q: n annuity pays $4152 per month, and payments are made at the end of each month. If the interest rate…
A: Present value of annuity can calculated by using Excel PV function.
Q: 4.10) PVIFA you need to repay the loan by equal payments at the end of every 6 months Example 9: You…
A: Given, The loan amount is P50,000 Interest rate is 10% Term is 3 years
Q: If the principal is 124,860 and the future value is 182,568 what is the value of the single payment…
A: single payment present worth factor =Present value (Principal) /Future Value
Q: How much must you deposit each year into your retirement account starting now and continuing through…
A: The current value of a forthcoming sum of money or series of payments with a predetermined rate of…
Q: A B 1 Particulars Values 2 Future Value (FV) 3 Interest rate Compounded monthly (I/Y) |0.05 4…
A: When interest is compounded monthly, the interest rate per annum shall be divided by 12 to calculate…
Q: Determine the monthly principal and interest payment for a 15-year mortgage when the amount finand…
A: Loans are to be paid by the monthly payments that carry the payment of the principal amount and…
Q: Calculate all three (see Problem 8.11) PW indexes (at i = 15%) for the following projects described…
A: Net present Value is the difference between Present Value of cash Inflows and Initial Investment.…
Q: San Jose Realty Corporation acquired a tract of land on January 1, 2020 for P20 million. Transaction…
A: San Jose Realty Corporation Acquired a tract of land on Jan 1, 2020, for P20 million Transaction…
Q: MTE mechanical engineering Company has a machine purchased 5 years ago at a cost of BDT 100000.00.…
A: Data given: Old Machine: Cost price = BDT 100000 Life of machine =10 years Annual depreciation = BDT…
Q: 2. A Machine costs $30,000 to purchase . Salvage value of the machine after 5 years = $7000.…
A: Capital recovery cost refers to those equivalent annual cost of the company which is used to recover…
Q: 5. In order to purchase a 1000 par value 10 year bond, yielding an annual nominal rate of 8%…
A: A bond is a debt instrument through which a company raises capital. It pays back a fixed amount…
Q: The stock of Alpha Tool sells for $81.20 per share. Its current dividend rate, D0, is $3 per share.…
A: Stock valuation The dividend discount model is a method of valuing a stock by discounting expected…
Q: Thomas deposited 300,000Php now, so that his 3 year old daughter will receive 6 equal amounts of…
A: Age of Daughter today is 3 years Amount Deposited today is 300,000Php Annual Receipts starts from…
Q: Discuss Three (3) risks face by commercial bank with asymmetric information and how the above risk…
A: A commercial bank is a financial institution that takes public deposits and lends money for…
Q: You have $100 a month you can deposit into an account earning 3.9% APR, compounded monthly. How long…
A: Given that: Accumulated Value (A)=$10000 Principal amount (P)=$100 Interest rate (R)=3.9%=0.039 t=?…
Q: Find the term of the following ordinary general annuity. State your answer in years and months (from…
A: Present Value of Ordinary Annuity refers to a concept that determines the value of cash flows at…
Q: 25. Sarah is taking out a $24,400 four-year new-car loan with an APR of 6.88%. What is the finance…
A: Present value of loan=$24400 APR=6,88% n=4 years
Q: Firm CCC has no debt. Existing assets generate earnings of $20mil. per year forever. Discount…
A: Here, Existing Earnings = $20,000,000 Discount rate = 10% No. of outstanding shares = 5,000,000…
Q: Mike Trout, the Angels' superstar outfielder, is looking to sign a contract extension with the team…
A: Solved using Financial Calculator FV = 25,000,000 N = 10 I/Y = 5.5 CPT PV = 14,635,764.49 =…
Q: Propose four Amazon short-term and three long-term solutions (for each) and discuss the effects of…
A: Amazon.com, Inc. is a multinational technology corporation based in the United States that…
Q: Stocks A and B have the following historical returns: Year rA rB 2015 -18% 56% 2016 44% 8% 2017 -22%…
A: As per Bartleby guidelines,If a question with multiple sub-parts are posted, first 3 sub-parts will…
Q: $1.4, calculate the value of this stock. (A d off calculations to 2 decimal spaces)
A: Present value 1.4*(1+0.27)=1.78 Year 1 = 1.78*0.89285= 1.59 Year 2 = 2.26*0.79719= 1.80 Year 3 =…
Q: Determine the amount of cash paid to bondholders for bond interest for each of the six independent…
A: Cash paid for interest = Interest expense - interest payable + unamortized discount
Q: Find the total amount that must be repaid on the following note described.
A: Simple interest Amount = Principal Amount x Rate of Interest x Time Amount Repaid = Principal…
Q: A bond that has a face value of $2,000 and coupon rate of 3.60% payable semi-annually was redeemable…
A: Calculation of Bond Price: Given: Future Value (FV) = $2000 Coupon Rate = 3.60% Yield = 4.10%…
Q: suppose that the Matrix corporation has $120 million of assets, all financed with equity, and that…
A: The combination of debt and equity used to fund a company's assets and activities is referred to as…
Q: Wisdom Tree U.S. Total Earnings Fund (EXT) returns for the past 5 years have been: 2015 -2.30 % 2017…
A: Question 8 - Solved using excel Correct option - A ; 13.60%
Q: Directions. Prepare a single-step Income Statement For the year ended Dec. 31, 2019, at space…
A:
Q: There are six laws that regulate consumer credit in the United States. The one that protects credit…
A: The Correct option is 'a. Fair Credit Reporting Act'.
Q: J&R Renovation, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding…
A: a) Pre Tax cost of debt: Interest rate found out using Financial Calculator N = 14 * 2 = 28 PMT =…
Q: Q6. You plan to deposit P100 into a savings account at the end of each month for the next 5 years.…
A: Note: The Answer, given for part b is mentioned incorrect, so we are solving the correct one for you…
Q: Year Net Cash Flow Alt 1 Net Cash Flow Ali PhP 11,000 - PhP 5000 5,000 2,000 4,000 3,000 3 3,000…
A: Capitalized cost is present value of all cost and benefits that are worth today considering interest…
Q: ou expect that the index will experience a gnificant drop in the next 4 months. What would e the…
A: The option are used for hedging the current position in the market and used quite extensively to…
Q: Calculate the percentege gain and loss for bearish and bullish stock Mankel Esends. What is the Code…
A: % Gain or loss for Bullish stock = (Sale Value - Purchase Value)/Purchase Value
Q: Hank made payments of $106 per month at the end of each month for 30 years to purchase a piece of…
A: Here, Monthly payment = $106 per month Total number of years = 30 years Selling price of property =…
Determine the present worth of a commercial space which requires P1,500,200 for original construction: P101,200 at the end of every year for the first 6 years and then P130,000 each year thereafter for operating expenses with interest at 6% compounded quarterly? Show complete solution and formula used. Provide cashflow diagram. Write it legibly in a piece of paper and not in excel.
Step by step
Solved in 2 steps with 2 images
- The Horizon Company will invest $79,000 in a temporary project that will generate the following cash inflows for the next three years. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Cash Flow $ 22,000 35,000 42,000 The firm will also be required to spend $21,000 to close down the project at the end of the three years. a. Compute the net present value if the cost of capital is 9 percent. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. Year 1 2 3 Net present value b. Should the investment be undertaken? O No O YesDetermine the capitalized cost of an expenditure of P 200,000 at time 0, P 25,000 in years 2 through 5, and P 40,000 per year from year 6 onward. Use an interest rate of 12% per year. Calculate it manually, not in excel. Show complete solution and formula used. Please write it in a paper in order for us to understand. Don't type it. Thank you!ANS. P 456,940.26The Horizon Company will Invest $84,000 in a temporary project that will generate the following cash inflows for the next three years. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Cash Flow $22,000 34,000 58,000 7 3 The firm will also be required to spend $10,000 to close down the project at the end of the three years. a. Compute the net present value if the cost of capital is 8 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) Net present value b. Should the investment be undertaken? Ⓒ Yes O No
- You are offered an asset that costs $150,000 and has cash flows of $1,350 at the end of every month for the next 6years. Assume the cost of capital is 9percent per year.a. What is the IRR of the asset?b. What is the NPV of the asset? c. If your cost of capital is 12percent, should you purchase it? (Setup cash flows in Excel spreadsheets and uses the following Excel Financial functions, IRR, and NPV to derive your answers.Dogwood Company is considering a capital investment in machinery: (Click the icon to view the data.) 8. Calculate the payback. 9. Calculate the ARR. Round the percentage to two decimal places. 10. Based on your answers to the above questions, should Dogwood invest in the machinery? 8. Calculate the payback. Amount invested Expected annual net cash inflow Payback 1,500,000 24 500,000 3 years 9. Calculate the ARR. Round the percentage to two decimal places. Average annual operating income Average amount invested ARR Data Table Initial investment $ 1,500,000 Residual value 350,000 Expected annual net cash inflows 500,000 Expected useful life 4 years Required rate of return 15%For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. An asset costs $20,000 today. If inflation is 6% per year and interest is 10% per year, what will be the appropriate future value of the machine adjusted for inflation in 5 years?
- Please use the following table to answer subsequent questions. Assume 7% cost of capital for both projects. (Numbers in parenthesis means outflow). Year Cash flow for Project X Cash flow for Project Y 0 ($32,000) ($32,000) 1 23,000 33,000 2 44,000 (44,000) 3 (27,000) 52,000 What is the MIRR’s for project Y? Only input the percentage value with 2 decimal places, NO % sign please.What is the profitability index of a project that costs $10,000 and provides cash flows of $3,200 in years 1 and 2 and $5,200 in years 3 and 4? The discount rate is 8%. Note: Do not round intermediate calculations. Round your answer to 4 decimal places. Answer is complete but not entirely correct. Profitability index 1.3657 xDock Company is considering a capital investment in machinery: E (Click the icon to view the data.) 8. Calculate the payback. 9. Calculate the ARR. Round the percentage to two decimal places. 10. Based on your answers to the above questions, should Dock invest in the machinery? 8. Calculate the payback. Payback years - X Data Table Initial investment $ 1,500,000 Residual value 350,000 Expected annual net cash inflows 500,000 Expected useful life 4 years Required rate of return 9% Print Done
- The following table shows the expected cash flows from a project. There are no cash flows beyond year 4. The cost of capital is 7%. a. Calculate the project's NPV. Note: Do not round your intermediate calculations. Enter your answer in thousands rounded to nearest whole number. b. Calculate the economic rent in year 1. Note: Do not round your intermediate calculations. Enter your answer in thousands rounded to 2 decimal places. CO -200 Cash flows ($000s) C1 80 C2 75 C3 70 C4 65 > Answer is complete but not entirely correct. a. Project's NPV $ 47✔ b. Economic rent in 1 Year $ 66.00 XRoopali is considering an investment proposal with the following cash flows: Initial investment-depreciable assets $45,000 Initial investment-working capital 5,000 Net cash inflows from operations (per year for 7 years) 10,000 Disinvestment-depreciable assets 3,000 Disinvestment-working capital 2,000 Determine the payback period. Round to one decimal place. Determine the accounting rate of return on initial investment. round to three decimal places. Determine the accounting rate of return on average investmentUse Given-Required-Solution in answering problems. Provide cash flow diagram as necessary. Answers should be rounded off to two decimal places and enclosed in a box. Write answer on the space provided below. Solution shall be uploaded at the end of the quiz. The price of a system of jockey pumps is P6,000,000. PLM decided to purchase this system and spent P215,500 for shipping and installation. The equipment will last for 10 years with a salvage value of 3% of its total cost. Determine the following: a. Yearly charge of depreciation using SL method. b. Respective depreciation charges on the 6th year and 8th year, and book value at the end of 8th year using SYD method