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 =…
Q: Determine, via the present value method, which machine Tim should recommend.
A: The Present value method measures the Net present value of all the future cash flows related to an…
Q: last un Your answer must be correct to exactly 4 decimal places and must not include the percent…
A: Internal Rate of Return (IRR): It is the rate at which the net present value of an investment or a…
Q: STRIPS are: a) Government-backed schemes that allow investors to hedge against market risk.…
A: STRIPS (Separate Trading of Registered Interest and Principal Securities) was established to give…
Q: A car costing $ 48182 is purchased with a 25% down payment and further payments of X at the…
A: The act in which one person or entity provides funds to another person for defined term and agreed…
Q: What is the expected return of a portfolio that has $8,000 invested in S and $2,000 invested in T?…
A: Return of Stock S = (0.25 * 30%) + ( 0.5 * 15% )+ (0.25 * -10%) = 7.5 + 7.5 - 2.5 = 12.5 Return of…
Q: Discuss the concepts of over- and understoring and describe their relationship to the Index of…
A: The Index of Retail Saturation (IRS) is the ratio of available supply to demand for a product…
Q: 1. On January 1, 2013, Y. Corp. issued 10% - 5 year bonds with a face of P100,000 at P97,500.…
A: Solved using Financial Calculator N = 3 PMT = 10,000 FV = 100,000 PV = +/- 97,500 CPT I/Y = 10.67%
Q: Question 4 a. The stock market provides an annual return of 8.4%. A risky project costs £35,000 but…
A: Since multiple questions are asked , we will answer 1st question for you as per prescribed…
Q: What is the operating income (EBIT) for both firms? Round your answers to the nearest dollar. Firm…
A: EBIT refers to earnings before interest and taxes. It is also known as operating income in the world…
Q: w/ ル 16 AaBbCcDc AaBbCcDc AABBCC AABBCCC A 1 Normal 1 No Spac... Heading 1 Heading 2 , 三 Paragraph…
A: Ratios are given as follows for 2 years: 2018 2017 Current Ratio 4.26470 4.82510 Acid test…
Q: A B C Php Php Php Php First cost 24,000 30,000 49,600 52,0 Power per year Labor per Php Php Php Php…
A: Given,
Q: For each of the following annuities, calculate the annual cash flow. (Do not round intermediate…
A: Given, The present values, interest rate and number of years of the annuities. Required: To…
Q: You would like to purchase a Treasury bill that has a $10,000 face value and is 68 days trom…
A: As per Bartleby guidelines, since you have posted multiple questions, first 1 question will be…
Q: Ruby's Corporation needs to raise up its capital to RM80 million to expand its business. It plans to…
A: Total capital = RM80 million Equity capital = RM20 million Debt capital = Total capital - Equity…
Q: Question Two A company must make adjusting entries to ensure that the revenue recognition and…
A: Question two. Correct Option is 'd'.
Q: Evaluate the above offers using the investment evaluation techniques mention below without using…
A: MIRR or modified internal rate of return is an important capital budgeting tool. This tool is used…
Q: /ou are interested in purchasing a computer from the available three options. С-1 C-2 С-3 First Cost…
A: Incremental B/C analysis is known as Benefit and costs analysis where a number of options are…
Q: Ruby corporation is planning to buy bond that matures in 10 years. The annual coupon payment is at…
A: Years to maturity = 10 Years Par value = RM 1,000 Coupon rate = 3.5% Coupon amount = 1000*0.035 =…
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: Suppose financial intermediaries did not exist and only direct finance was possible. How would this…
A: A financial intermediary is a company or people that acts as a go-between for various parties to…
Q: Anna is buying a house selling for $255,000. To obtain the mortgage, Anna is required to make a 15%…
A: Mortgage amount can be calculated as excess of total house cost over and above the amount of down…
Q: What is the maximum that you would be willing to loan your brother for a $100 IOU if he promises to…
A: Since Future value = Present value ×(1+Periodic Interest rate)^n Where, N= Number of periods = 1…
Q: Use the following to answer questions 25 – 27 On January 1, year 1, ST borrows $24,000 to purchase a…
A:
Q: the table below. Name Dividends Yield Series X 8.0% 10.5% Series Y 7.2% 9.8% Series Z 6.5% 11.1%…
A: Price of preferred stock can be calculated from dividend and yield on the dividend.
Q: Describe what the investment role involves for a financial mana
A: Role of financial managers are very important in relation to the achieving and maximizing the wealth…
Q: b) You can invest in taxable bonds that are paying a yield of 9.50% or a municipal bond paying a…
A: A security bond is a legally enforceable promise to pay the government if you or your employee…
Q: A $5000 semi-annual coupon bond paying interest at 7.7%/year compounded semi-annually is redeemable…
A: The purchase price of the bond should be the minimum of the three prices determined at an 8.7% rate:…
Q: Tricana Corporation borrowed $75,000.00 at 3% compounded monthly for 14 years to buy a warehouse.…
A: Borrowed amount is $75,000.00 Interest rate is 3% compounded monthly Time period is 14 years To…
Q: 4. Consider a 10 year semiannual bond redeemable at par that yields a nominal annual rate of 8%…
A: Solved using Financial Calculator N = 10*2 = 20 I/Y = 8/2 = 4 PMT = 6/2 = 3 FV = 100 CPT PV =…
Q: The discounted payback method is better than the regular payback method because The time value of…
A: Payback period is the amount of time required to recover initial investment. Regular payback period…
Q: How can bookkeepers and accountants steal from a property, and what steps can be taken to prevent…
A: Embezzlement, misappropriation, theft, stealing, robbery, or call it what you want, which is usually…
Q: You would like to purchase a Treasury bill that has a $10,000 face value and is 68 days trom…
A: As per Bartleby guidelines, If multiple questions are posted , only first 1 question will be…
Q: Depreciation and accounting cash flow A firm has gathered the following data for its current year's…
A: Given, In this question we are given the data regarding a firms current year's operations . And we…
Q: Direct Materials, Direct Labor, and Factory Overhead Cost Variance Analysis Mackinaw Inc. processes…
A: Answer- Working Note: Particular Actual quantity x actual price/rate Actual quantity x…
Q: the legal rights of stockholders (common and preferred
A: Preferred and ordinary stock have different income claims, which will vary from one stock issuer to…
Q: Please provide the given, required, and complete solution with units. Thank you. At age 30,…
A: As the number of compounding increases the effective interest rate increases and there is more…
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: You have invested your annual bonus in a one year fixed deposit at Alpha Bank which offers a nominal…
A: The difference between simple interest and compound interest is simple interest only calculates…
Q: You're prepared to make monthly payments of $260, beginning at the end of this month, into an…
A: The number of payments made can be calculated with the help of NPER function of Excel
Q: The financial manager of Federal Financial leasing & investment Ltd has well-structured capital. The…
A: Given, Debenture cost is 8% Preferred stock cost is 12%
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: O Corp issues 5%, 20-year bonds with a total face amount of $1,000,000. The market interest rate for…
A: The issue price of bonds will be present value of maturity amount and present value of interest at…
Q: A loan was made 3 years and 8 months ago at 7.5% simple interest. The principal amount of the loan…
A: Here, Simple interest = 7.5% Time = 3 years and 8 months Interest amount = P620 To Find: 1. Discount…
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: Two questions: (CLO-2) La. A two-year Treasury security currently earns 1.94%. Over the next two…
A: Rate of return = 1.94% Risk free rate = 1.00% Inflation Premium = 0.50%
Q: eBook Problem 20-02 Fill in the table using the following information. Assets required for…
A: The problem relates to a concept of financing a project or operations thru Debt and Equity sources…
Q: How much will you have in the account in 15 years? b) How much total money will you put into the…
A: Time value of money (TVM) is used to measure the value of money at different point of time in the…
Q: Calculate the Mean value
A: PERT technique refers to the techniques which are used to simplify the scheduling and planning of…
Q: How did they come up with the Total Project Benefit Costs, Yearly NPV, and Cumulative NPV? We are…
A: Here, To Find: Total Project Benefit Costs =? Yearly NPV =? Cumulative NPV =?
Step by step
Solved in 2 steps with 2 images
- Tony's Pizzaria, owned by my cousin Tony (True!), is looking for a new pizza oven (Not really). Two alternatives are: Model 1: Cost $30,000, estimated life 10 years, Salvage value $4,000, annual income $9,400, annual expenses $5,000 Model 2: Cost $40,000, estimated life 5 years, Salvage $2000, annual income $13,000, annual expenses $ $3,000 Find the discounted payback period for each if MARR is 6%. If their criterion is minimum DPBP, which should they buy?Kaleo has made up his mind—he wants a pool in the family’s backyard! He figures his kids and spouse will be thrilled. However, to cover the cost of the pool, they’ll have to pack up and live away from home for a few weeks during the summer to rent their home to vacationers. He crunched the numbers based on the following estimates. 1. Cost of pool/installation $50,000 2. Life of the pool (no salvage value) 20 years 3. Annual net cash inflows from renting (net of cash expenses for renting and pool maintenance) $6,500 4. Tax rate 23% 5. Average rate of return 8% Kaleo’s daughter, Sarah, found the above information written on a sheet of paper in his office, along with the following notes. “This is a no-brainer! We’ll recover the cost of this pool in just 7 years, even though we plan to live here until we’re old and gray, or at least as long as the pool hangs on. If we can rent our house out for just 3 weeks each year, it’ll be almost pure profit that we can put toward paying off…Ronald McDonald decides to install a fuel storage system for his farm that will save him an estimated 6.5 cents/gallon on his fuel cost. He uses an estimated 20,000 gallons/year on his farm. Initial cost of the system is $10,000, and the annual maintenance the first year is $25, increasing by $25 each year thereafter. After a period of 10 years the estimated salvage is $3000. If money is worth 12%, is the new system a wise investment?
- You need a new oven for your bakery. Your current oven is worn out so you are trying to decide which one of two ovens to buy as a replacement. Whichever oven you purchase will be replaced after its useful life. Oven A costs $25,000 and costs $3,000 a year to operate over an 8-year life. Oven B costs $20,000 and costs $4,500 a year to operate over a 6-year life. Given this information, which one of the following statements is correct if the applicable discount rate is 10 percent? A) The equivalent annual cost of oven A is -$7,481. B) The equivalent annual cost of oven B is -$8,209. C) Oven A lowers the annual cost by $1,406 as compared to oven B. D) Oven B lowers the annual cost by $1,598 as compared to oven A.Zootopia farms is consider replacing one off its tractors. The tractor in question was purchased 2 years ago at a cost of $47,000. The time of purchase the tractor was expected to have a 5000 dollar salvage value at the end of is six year life. The tractor has a current book value of 33,000. If sold today the company could get 26000 for the tractor. It costs $29,000 per year to operate the existing tractor. The new tractor would cost $50,000 and would only cost 21,000 to operate every year. The new tractor would depreciate on a straight-line basis over its 4 year useful life to its expected salvage value of $7,000. The company’s required rate of return is 14 percent. Ignore income tax Answer the fallowing 1) Should the company replace the tractor in question support your answer with NPV calculation 2) provide 2 nonfinancial options that the management of Zootopia must consider in making the decision to replace the tractor.Oliver Douglas decides to install a fuel storage system for his farm that will save him an estimated 6.5 cents/gallon on his fuel cost. Initial cost of the system is $10,000, and the annual maintenance is $25 the first year, increasing by $25 each year thereafter. After a period of 10 years the estimated salvage is $3000. If money is worth 12%, what is the breakeven quantity of fuel?
- DelRay Foods must purchase a new gumdrop machine. Two machines are available. Machine 7745 has a first cost of $10,000, an estimated life of 10 years, a salvage value of $1,000, and annual operating costs estimated at $0.01 per 1,000 gumdrops. Machine A37Y has a first cost of $8,000, a life of 10 years, and no salvage value. Its annual operating costs will be $300 regardless of the number of gumdrops produced. MARR is 6%/year, and 30 million gumdrops are produced each year. Solve, a. What is the annual worth of each machine? b. What is the decision rule for determining the preferred machine based on annual worth ranking? c. Which machine should be recommended?A university bought computers years ago worth $50,000. Its annual operating cost is $4,689. If it is going to be upgraded to have a new life of 4 more years and if is sold today, its price is $38,057. Its salvage value is $500. Alongside with this, it will buy new medium-type computer at a cost of $46,031, salvage cost of $300 and its annual operating cost is 6,634. The medium-type computers are expected to last for 5 years. This is to be considered the 1st Option. The 2nd Option is to buy larger computer, which has a cost of P4.2M, P1.12M salvage value, and P500,000 annual operating cost per year. It would last 5 years. The last option is to lease a computer. The computer has annual payment of P1.4M per year and initial payment of P100,000. It would last 4 years. Assume that the interest rate is 12% per year. What is the Annual Equivalent Cost of the 1st Option?DelRay Foods must purchase a new gumdrop machine. Two machines are available. Machine 7745 has a first cost of $10,000, an estimated life of 10 years, a salvage value of $1,000, and annual operating costs estimated at $0.01 per 1,000 gumdrops. Machine A37Y has a first cost of $8,000, a life of 10 years, and no salvage value. Its annual operating costs will be $300 regardless of the number of gumdrops produced. MARR is 6%/yr, and 30 million gumdrops are produced each year. Based on an internal rate of return analysis, which machine (if either) should be recommended?
- DelRay Foods must purchase a new gumdrop machine. Two machines are available. Machine 7745 has a first cost of $10,000, an estimated life of 10 years, a salvage value of $1,000, and annual operating costs estimated at $0.01 per 1,000 gumdrops. Machine A37Y has a first cost of $8,000, a life of 10 years, and no salvage value. Its annual operating costs will be $300 regardless of the number of gumdrops produced. MARR is 6%/year, and 30 million gumdrops are produced each year. Solve, a. What is the present worth of each machine? b. What is the decision rule for determining the preferred machine based on present worth ranking? c. Which machine should be recommended?A company is considering replacing a machine (defender) that was boughtsix years ago for $50,000 and has now malfunctioned. The machine can be repaired toextend its life by Öve more years. If repaired, the machine will require an operating costof $10,000 per year. If it is replaced, the new machine (challenger) will cost $44,000, willlast for six years, and will have operating expenses of $5,000 per year. The challengerwill have zero salvage value at the end of its six year life. The malfunctioned defendercan be sold at a current market value of $15,000. If MARR is 12% per year, what isthe maximum amount that the company should spend to repair the existing machineinstead of switching to the challenger? Use the outsider viewpoint method. (Note: Allvalues are before taxes, not tax calculations are necessary). please dont use excellYou are running a small machine shop where you need to replace a worn-out sanding machine. Two different models have been proposed:• Model A is semiautomated, requires an initial investment of $150,000, and has an annual operating cost of $55,000 for each of three years, at which time it will have to be replaced. The expected salvage value of the machine is just $15,000.• Model B is an automated machine with a five-year life and requires an initial investment of $230,000 with an estimated salvage value of $35,000. Expected annual operating and maintenance cost of the B machine is $30,000. Suppose that the current mode of operation is expected to continue for an indefinite period. You also think that these two models will be available in the future without significant changes in price and operating costs. At MARR = 15%, which model should you select? Apply the annual-equivalence approach to select the most economical machine.