Twoyears ago, a certain company invested S450,00 in a project with a simple interest of 8% per year. Now; the company plans to invest the total amount accumukated so far in another project with a compound loss of 10% per year for another three years Calculate Equal Payments Equivalent to Returm?
Q: A coupon bond that pays interest of R40 semi annually has a par value of R1,000, matures in 4 years,…
A: Face value = R1,000 Discount = R36 Price = 1000-36 = R964 Years to maturity = 4 Years Number of…
Q: Use the information below provided by Angel Baby Angel Company: Sales 8,250,000.00 Operating…
A: Data given: Net operating profit =$ 3,525,000.00 Tax rate = 40% Interest expense=$ 1,750,000.00 WACC…
Q: ABC Corporation bought 5 short futures. The contract size is 10,000 shares of Mining Inc. The strike…
A: ABC Corporation bought 5 short futures. It means ABC is a Put Buyer. The put Buyer will exercise…
Q: The amount by which the balance sheet does not balance at first is called ______ Total Liability…
A: The balance sheet can be defined as one of the financial statements of the business organization…
Q: Option Trading Strategies - Two Assets $40 Fist Asset Proft Second Asset Profit Total Profit - ie…
A: In case of a Long put, Payoff is Maximum of (exercise price - Stock price,0), I,e option is…
Q: What are the Black-Scholes Options Pricing Model's underlying assumptions?
A: The Black-Scholes Options Pricing Model can be defined as the pricing model used to ascertain the…
Q: he financial statements showed the following: Operating income $2,750,000, Depreciation $1,350,000,…
A: Operating income = $2,750,000 Depreciation = $1,350,000 Change in working capital = $860,000 Tax…
Q: Characteristic Line and Security Market Line You are given the following set of data: Historical…
A: a) Beta co-efficient of a stock can be calculated using the formula as below:…
Q: a. Calculate the average rate of return for each stock during the 5-year period. Do not round…
A: Expected return refers to the return earn by an investor on the amount invested during a period of…
Q: the Financial Manager of C&C Corporation and are evaluating to launch a new product that requires an…
A: Net present value is the difference between the present value of cash flow and initial investment of…
Q: Sell Disney Stock "Short"
A: Stock refers to a type of security that shows the fractional relationship in the company. It is used…
Q: As an Analyst you were tasked to compute for the Weighted Average Cost of Capital of various…
A: Weighted average cost of capital (WACC) is the average cost of capital of the firm from all sources…
Q: of a $35 strike call? Assume S = $38.50, = 0.25, r = 0.06, the stock pays no dividend andthe option…
A: When a derivatives contract is exercised, the strike value is the cost at which it could be…
Q: A copyright is issued when a firm uses identifying words, names or symbols on its product to…
A: Copyright can be defined as the protection of work created by the artist which is original,…
Q: On the average, the announcement of an open-market repurchase program can be viewed by investors as…
A: Repurchase of stocks is generally known as buyback of stocks. It is the process in which companies…
Q: Fil Development buys on terms of 2/15, net 60 days. It does not take discounts, and it typically…
A: Accounts payable: Accounts payable are the liabilities which arises due to credit purchases from the…
Q: norigage has 21 years left, and has an APR of 8.707% Withn montniy payments of $1,449. at is the…
A: The mortgage loans are to be paid by the monthly payments and these monthly payments carry the…
Q: An initial investment of $12,000 on an Artificial Intelligence (AI) powered cyber defense project is…
A: Net Present Value is the difference between present value of cash inflows and cash outflows. At IRR,…
Q: Assume you have a brand new nephew in the family and you want to contribute to the child's college…
A: A bond is a debt instrument that is used to raise capital. It differs from loans as they can be…
Q: Suppose the stock price is $20 today. In the next six months it will either fall by 50 percent or…
A: Let S denote the share price, r risk free rate, up-factor (u) = 1.50 and down factor (d) = 0.50…
Q: StataProb Corporation has a current market value of 106.42 dec 92 per share. Which corporation will…
A: The earning of corporation will depends on the dividend and market price of stock and that would…
Q: A stock you are interested in is priced at $105, it's recent dividend was $5, if the market expects…
A: Market's expected return = [{D0*(1+g)}/P0]+g Where Recent dividend (D0) = $5 Current price (P0) =…
Q: what is the maximum amount that the company should pay for the machine today such that the chouices…
A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount…
Q: When Bridget takes a new job, she is offered a $2800 bonus now or the option of an extra $250 each…
A: Here we will use the concept of time value of money. As per the concept of time value of money the…
Q: Option Payoffs and Profits 540 s20 Option Pey Option ro Eerce Pre s20 S40 $10 $20 $10 $40 $50 se0…
A: In case of a Long put, Payoff is (exercise price - Stock price,0), I,e option is exercised only if…
Q: QUESTION 4 Bob and Roberta are married and have two children. They are covered by a comprehensive…
A: Coinsurance is the amount, usually stated as a fixed percentage, an insured must pay against a claim…
Q: 59. Modified True or False T means Correct and F means Wrong Scenario: If you have a series of…
A: Cash flow is the inflow and outflow of cash in the business. It is real or virtual movement of money…
Q: A company has taken a steadily amortized loan of 3 250 000 € The loan term is 8 years with quarterly…
A: Interest on loan: It is the expense of borrowing money. It starts to accumulate, or include when…
Q: Which of the following correctly characterizes the risks in merger arbitrage? O A. The strategy is…
A: Merger arbitrage is the process where an investor trades in the stock of the companies involved in…
Q: You find a bond with 27 years until maturity that has a coupon rate of 9.0 percent and a yield to…
A: Given, The face value of bond is $1000 Coupon rate is 9% term is 27 years
Q: Silahis Trading made investments in non-trading equity securities. The cumulative “Holding Gain or…
A: Answer - Calculation of amount required to debit to other comprehensive income account at the end…
Q: current price stock XYZ is RM20. In 3 months, it will be either RM22 or RM18. A 3-month call option…
A: Options are called derivative financial instruments, because the value of options is derived from…
Q: Farmers Alliance Limited is considering investing in new equipment with the initial cost of…
A: Given, Project's Net Worth =Cash inflows NPV - cash outflows NPV Option (1): Case when the project…
Q: Arthur is deciding to make end-of-year deposits of P1,200 per year. What rate of return would enable…
A: Future Value: The future value is the amount that will be received at the end of a certain period.…
Q: please show step by step. answer has to be 2.43. no excel function either James bought a four-year…
A: Solution:- Macaulay’s duration is that period where price risk and reinvestment risk cut each other.
Q: UITY DUE PROBLEM: Mr. Alarcon pays the rental of a computer shop at P 10,000 payable in advance at…
A: The present value of monthly rental payment that would be paid would give the annual rental payment…
Q: The Dow Jones Industrial Average (DJIA30) and the Standard strial Index (S&P500) have a number of…
A: Dow Jones and S and P 500 are very important in stock market of US and are barometers of US stock…
Q: ds, year-end rate
A: A merger occurs when two separate entities combine hands to create a new, united entity.The…
Q: Interest Rate Guarantee: On July 1, 2021, ABC Corp. agreed with the bank a P5,000,000 loan to be…
A: 01-07-2021 5,00,00,000.00 5,00,00,000.00 30-09-2021 7% 10% 31-03-2022 Due Date…
Q: A loan officer states, "Thousands of dollars can be saved by switching to a 15-year mortgage from a…
A: We will apply the principles of compounding and time value of money here. The principle of…
Q: To create a fund of P1,000,000, how many deposits of P48,000 must be placed at the beginning of each…
A: Accumulated fund (AF) = P1,000,000 Monthly deposit (m) = P48,000 Monthly interest rate (r) = 0.005…
Q: For example, you are a portfolio manager, and you get to select your pick of clients (individual or…
A: As a portfolio manager, the pick would be individual investor and sub class would be HNWIs. HNWIs or…
Q: Eric has an option position on Langdon stock that results in a zero dollar payoff when the stock…
A: Purchasing a put option means the right to sell at certain security only if stock price is less than…
Q: Macaulay duration 11.8100 Modified duration 11.2500
A: Macaulay duration refers to the weighted average period which is up to the maturity of the cash…
Q: onclusion
A: A mutual fund refers to the investment which pooled money from many investors for the purpose of…
Q: At the end of March 2019, a Zambian corporate bond had a coupon rate of 6%, a par (face) value of…
A: Given, The face value of the bond is K1,000 Yield is 4.5% Coupon rate is 6%
Q: If POST is 1234 and FLIRT is 56784, what is FROST? 58234 58243 43285 52384
A: Data given: If POST = 1234 FLIRT=56784 Workings P=1 O=2 S=3 T=4 F=5 L=6 I=7 R=8 T=4
Q: Malik Inc.'s bonds currently sell for $1,095.80 and have a par value of $1,000. They pay a $50…
A: Yield to call is the yield earned till the bond is called. It can be calculated using the RATE…
Q: What is the Yield to Call (YTC)?
A: Yield to call (YTC) refers to the return earned or received by the bondholders on the bonds held by…
Step by step
Solved in 3 steps
- Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated revenue producing lite of 4 years. Mason has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?An equipment which can be purchase for P700,000 is expected to generate a net cash flow of P200,000 annually for five years which is the estimated service life of the equipment. Its salvage value at the end of the service life is estimated to be 5% of its purchased cost. a. What is the rate of return of the initial investment? b. What is the simple pay-back period? c. If the company's minimum attractive rate of return(MARR) is set at 15%, using NPW is this investment acceptable? d. What is the internal rate of return(IRR) of this machine? e. What is the external rate of return(ERR) at the 15% MARR?
- An investment has an initial cost of $3.2 million. This investment will be depreciated by $900,000 a year over the 3-year life of the project. Should this project be accepted based on the average accounting rate of return if the required rate is 10.5 percent? Why or why not? Net Income $211.700 186.400 Year 165,500 O Yes; because the AAR is 10.5 percent O Yes; because the AAR is less than 10.5 percent O Yes; because the AAR is greater than 10.5 percent O No; because the AAR is greater than 10.5 percent O No; because the AAR is less than 10.5 percentA company is considering an investment that will cost $759,000 and have a useful life of 6 years. The cash flows from the project are expected to be $450,000 per year in the first two years then $170,000 per year for the last 4 years. If the appropriate discount rate is 16.0 percent per annum, what is the NPV of this investment (to the nearest dollar)? Select one: O a. $316870 O b. $321617 O c. $1834870 O d. $439045Assume that JL Corporation would like to know the amount of investment it will make in order to yield an amount of P500,000 which it will receive three years from now. Assume that the rate for this type of investment is 10%.
- Starwood Ltd is considering to invest in a new project. The project is expected to generate cash flows of $1,000 every four years forever with the first cash flow starting in year 2 and $4,000 every four years forever with the first cash flow starting in year 4. Suppose similar investments are paying a return of 10% p.a. compounded quarterly. How much should Starwood Ltd be prepared to pay for this project? $10,732.18 $10,235.32 $10,770.56 $11,697.21 $11,255.51You are considering two mutually exclusive projects with unequal lives. One of the projects has an up-front cost of $59,000 (CF0= -59,000) and produces positive after-tax cash inflows of $21,000 a year at the end of each of the next 5 years. Assuming the cost of capital is 9.2%, what is the equivalent annual annuity of the project?Raysut cement has taken up a new project with an initial investment of 125000 OMR.The expected future cashflow from the project over the next three years will be 57000 OMR, 55000 OMR and 65000 OMR.What is the profitability index if the discount rate is 15 percent? Select one: a. 1.04 b. 1.23 c. 1.12 d. None of these e. 1.07
- A present investment of tk 500,000 is expected to yield receipts of tk70, 000 a year for 15 years. What is the appropriate rate of return that will be obtained on this investment? (Hint: apply linear interpolation if necessary).Consider a project in which you have to invest $15,000 today and you will receive $24847 in one year. What is the internal rate of return (IRR) of this project? The IRR is % (Keep 2 decimal places). Answer:The company will invest for a 2-year project. The first year, return of the investment is 240.000 USD and the second year, return is 432.000 USD. If the annual interest rate is 20%, how much money should be invested at present value for this investment to be profitable? (20P)