Essay about Integrative Problem-Exchange Rate Behavior

The fixed cost is assumed that Larry has discovered the other fixed cost incurred. The total investment is $800,000. The worst case scenario assumes that Larry got a total line of credit from the bank in the amount of $400,000 and invested $400,000 from other source. The Notes payable – short term and the long-term debt is (11.8 + 3.7) = 15.5 % from Table F in the handout. The Loan interest and payment per year is ($400,000 * 0.155)= $62,000. The Income data from Table F indicates that there is a 0.4% of all other expenses net out of the total sales which equals to $109,908 (5,700,666 gallons * $4.82 *0.4%) .

8. Karen has $16,000 that she wants to invest for 1 year. She can invest this amount at The North Bank and earn 5.50 percent simple interest. Or, she can open an account at The South Bank and earn 5.39 percent interest, compounded monthly. If Karen decides to invest at The North Bank, she will:

What annual interest rate is needed to produce $200,000 after five years if only $100,000 is invested?

2. If you had a payment that was due you in 5 years for $50,000 and you could earn a 5% rate of return, how much

7. A company pays $600,000 for 30% of the common stock of X, Inc. In the first year, X,

You have submitted this Assignment on Wed 26 Sep 2012 8:58:18 PM EEST. You achieved a score of 90.00 out of 100.00. Please read all questions and instructions carefully. Note that you only need to enter answers in terms of numbers and without any symbols (including $, %, commas, etc.). Enter all dollars without decimals and all interest rates

(a)    $30,000 receivable at the end of each period for 8 periods compounded at 12%.

4. Apple, whose global sales are generally dollar denominated, finds it has excess cash of $155,000,000,000, which it can invest for up to three years. It has determined that its best options are either a three-year Euro-dollar ($) deposit paying 2.75% or a three-year Swiss Franc denominated deposit paying 1.60% since it expects the SF to appreciate 1.15% per annum against the dollar over the next three years. Using cash flow analysis determine the best currency option in which Apple should invest. Be sure to show your complete calculations of the annual return on each investment at the end of the three-year term. Assume that the annual interest amount is reinvested, i.e. compounds, at the same annual interest rate. Would your answer change if Apple revised its outlook for the SF to appreciate 1.2% per year? Show all calculations!!!

If she wishes to protect the firm against an unfavorable increase in interest rates she could: A) sell an interest rate futures contract of a similar maturity to the loan. B) buy an interest rate futures contract of a similar maturity to the loan. C) swap the adjustable rate loan for another of a different maturity. D) none of the above 13) A U.S. investor makes an investment in Britain and earns 14% on the investment while the British pound appreciates against the U.S. dollar by 8%. What is the investor 's total return? A) 22.00% B) 23.12% C) 6.00% D) 4.88% 14) The Mexican government sold $1bn century bonds, with a maturity of 100 year, in Europe in 2010. The bond is classified as _______? A) foreign bond B) Eurobond C) domestic bond

3. (TCO 3) Fanta Cola has $1,000 par value bonds outstanding at 12 percent interest. The bonds mature in 25 years. What is the current price of the bond if the YTM is 11 percent? Assume annual payments.

After the calculations you end up coming out with a rate of 14.87%. The third and final part of question three asks what rate you will need if the interest is compounded semiannually. All you have to do is double the amount of terms and you will come out with a lower number of 7.177%. Since the interest is compounded semiannually that means that you will need to times that number by two and you come out with your final number of 14.35%.

At 8 percent interest, how long does it take to double your money? To quadruple it?

b) Manuel pays his account in full on 3 September. How much does he pay?

First we need to get the present value of the annuity for the 1,500 semiannual PMTs at year 14

The first option is choosing the currency of pounds. The cost in euros is EUR1,133 million. This amount was computed by first converting the EUR750 million into pounds. When the principal amount was converted, this will be used to get the payment for each year. The last year which is year 10, the payment for that year will be added to the principal to get 496 million pounds. This amount will be converted into euros to get the total cost of the bond.