1. You wish to have $10,000 in an account 10 years from now. How much money must be deposited in the account now in order to have this amount if the account pays 8% compounded annually? * $1,490 $3,871 $4,632 $5,584

Q: There was a bit of concern about one of Big Rock’s newer entities – Big Rock Paving Company. Manage...

A: Current ratio measures the degree to which the current assets over the current liabilities. Current ...

Q: A mortgage balance of $25,000 is to be repaid over a 10-year term by equal monthly payments at 5.6% ...

A: Here, Mortgage balance = $25,000 Term = 10 years Rate of interest = 5.6% compounded semi-annually Mo...

Q: Yield to maturity The bond shown in the following table pays interest annually. (Click on the icon h...

A: Given, the par value is $1000 Coupon rate is 7%  Term to maturity is 9 years and market price is $11...

Q: annual cash flow f

A: Annual cash flows refer to the income of the company before deducting any interest, taxes, depreciat...

Q: Cost of Abalone Country Australia Chile Ireland New Zealand South Africa CLP Abalone Cost AUD 93,500...

A: Data given: $1 US = 104 Yen Offer price = 9.46 million Yen   Working Note #1 Offer price in USD: 9.4...

Q: Small businesses use approach(es) like it/they entail(s) minimal investment & risk. * ; due to that ...

A: Since you have asked multiple question, we will solve the first question for you. If you want any sp...

Q: Magnum plans to retire in 28 years with an amount of $2,500,000. His financial advisor has found a b...

A: Period (t) = 28 Years Interest rate (r) = 5% Future value (FV) = $2,500,000  

Q: The Bond Market Big Rock’s directors are looking to expand into a new suite of services. Although th...

A: Company raises money through various methods equity, bonds and preferred stock. Each one has advanta...

Q: Trivia Williams purchased 5 pounds of irish at the market for $180. He received six irish. If all th...

A: Calculation for 4 irish (of same weight and size) can be calculated as follows: = Value of 1 irish *...

Q: 5. Suppose 1-year T-bills currently yield 7.00% and the future inflation rate is expected to be cons...

A: The risk-free rate is the interest rate an investor would get on an entirely risk-free investment ov...

Q: A bond has a $13,000 face value, a 6-year maturity, and a 3.05% coupon. Find the total of the intere...

A: Face value= $13000 Number of interest payments = 6 Coupon rate = 3.05%

Q: their payment every year. Compute the annual payment to settle their debt if the rate of interest is...

A: A stream of equal cash flows paid or received periodically is termed as annuity. Annuity is either r...

Q: 2. Calculating Payback An investment project provides cash inflows of $865 per year for eight years....

A: Annual cash inflow = $865  

Q: In the Middle Ages, goldsmiths took in customers’ deposits (gold coins) and issued receipts that fun...

A: Customers find goldsmiths to be extremely convenient when conducting a large number of gold transact...

Q: Date Closing Market Index value Closing Price for PG Closing Price for F         01/02/2017 227...

A: Aggresive Vs Defensive portfolio:- Betas larger than one indicate aggressive portfolios, whereas bet...

Q: You work for a logistics company, which considers to invest in a computerized system to improve effi...

A: Here, Initial cost = $90,000 Additional expenses = $25,000 Savings in operating cost = $65,000 Addit...

Q: Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence,...

A: The stock price which is the maximum price to be paid for share consists of dividends and terminal v...

Q: 3. If money is worth 8% compounded quarter ly, determine the present value of the following: a. An a...

A: Annuity is a series of equal cash flows occurring at regular intervals. A perpetuity is an annuity t...

Q: New parents wish to save for their newborn's education and wish to have $37,000 at the end of 18 yea...

A: Given  P=$37,000 r= 7.8% n=1 t=18 years

Q: Galleon Industries is building a temporary manufacturing plant which will be completely removed afte...

A: Cash flow from a project includes all its cash income less cash expenses. It does not include any no...

Q: Check my work foreseeable future. Company B pays corporate taxes at investment. Suppose the opportun...

A: NPV:   Net Present Value (NVP) is one of the conducts to evaluate an investment to see if it's worth...

Q: Which of the maturity lengths between the bonds, bills, and notes would be most advantageous during ...

A: Bear market is the market condition when it drops off 20% or more than market average. It occurs dur...

Q: Edward Corporation expects an EBIT of $40,000 every year forever. The company currently has no debt ...

A: EBIT is $40,000 Cost of equity is 15% Tax rate is 30%  

Q: Suppose that you have good credit and can get a 30-year mortage for $100,000 at 5%. What is your mon...

A: A mortgage is a loan made usually for a property in which the collateral is the property itself.  

Q: Select all the options that would be part of the initial investment of a project consisting in estab...

A: The initial investment will consist of all one-time expenses and payments that are incurred in makin...

Q: Choices for last three requirements 3. What is the approximate IRR of Project A? a. 28% b. 18% c. ...

A: IRR is the internal rate of return. It is the rate at which NPV (net present value) becomes nil. 

Q: A house and lot costing P2 million was bought at down payment of P500,000. He paid 1 million after 1...

A: Future Value The future value is the amount that will be received at the end of a certain period. Th...

Q: a. Calculate the yield to maturity (YTM) for the bond. b. What relationship exists between the coupo...

A: Yield To Maturity: It refers to the total rate earned by the bondholder for holding the bond till m...

Q: Helene invests R5918 in a savings account that pays interest at 6% pa compounded monthly. Exactly 5 ...

A: Invested amount (X) = R 5918 r = 6% monthly compounded = 0.5% per month for n = 5 years (60 months) ...

Q: If money is worth 8% compounded quarter ly, determine tne present value of the following: a. An annu...

A: Discounting is a technique which is used to compute the PV of future cashflows by using an appropria...

Q: Find how much you should invest now at 6% interest, compounded quarterly in order to have $15,750 in...

A: Present Value: It represents the present worth of the future sum of the amount which is discounted ...

Q: A stock has a required rate of return of 13.99%, and it sells for $24.02 per share. The dividend is ...

A: Required return (r) = 13.99% Stock price (P0) = $24.02 Growth rate (g) = 1.6%

Q: 1.  If the yield to maturity for a two year zero coupon bond is 5.8% and the yield to maturity for a...

A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...

Q: Jim has an annual income of $300,000. Jim is looking to buy a house with monthly property taxes of $...

A: Here, To Find: Maximum monthly mortgage payment =?

Q: b) Magen's Bakery, Ic., is considering the purchase of a new cake mixing equipment for $200,000. Thi...

A: Net working capital (NWC) It is calculated as shown below. NWC=Accounts receivable+Inventory-Account...

Q: A nominal rate of interest of 7% compounded continuously is equivalent to an effective annual rate o...

A: Interest rate (r) = 7% Mathematics constant (e) = 2.7182818284590452353602874713527

Q: Assume​ Evco, Inc. has a current stock price of $50.92 and will pay a $2.20 dividend in one​ year; i...

A: Current stock price (P0) = $50.92 Expected dividend (D1) = $2.20 Required return (r) = 18%  

Q: Yukihira paid a 10% down payment of P200,000 for a restaurant and agreed to pay the balance of month...

A: Payment per period can be calculated using PMT function in excel.   PMT(rate, nper, pv, [fv], [type]...

Q: Big Rock has several investment portfolios with a local mutual fund company. One of the company's di...

A: The formula for the calculation of Sharpe ratio is as follows: Sharpe ratio=Expected return on portf...

Q: It is the sum of the first cost, and the present worth of all cost of replacement, operation, and ma...

A: First cost means initial investment. Present worth means present value of the future cash flows. It ...

Q: Big Rock is listed on the local stock exchange and its stock has had mixed performance over the last...

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first t...

Q: 5. If a credit union pays 4.125% interest compounded quarterly, what is the effective rate of intere...

A: Interest rate (r) = 4.125% Number of compounding per year (m) = 4

Q: If money is worth 12% compounded bimonthly, what quarterly savings is required in order to have P320...

A: We need to use future value of annuity formula to calculate quarterly payment PMT =FV*i(1+i)n  -1 wh...

Q: What is the equivalent effective rate of interest compounded quarterly if the ne is 19.5%? O 20.97%

A: Effective rate is interest rate after considering the effect of the compounding and while nominal ra...

Q: Krell Industries has a share price of $22.32 today. If Krell is expected to pay a dividend of $1.07 ...

A: Current stock price (P0) = $22.32 Expected dividend (D1) = $1.07 Price after 1 years (P1) = $23.71

Q: Management of the Toys R4U Company needs to decide whether to introduce a certain new novelty toy fo...

A: Note: This post has several subparts. The first three have been solved below.        

Q: Complete the table:

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts fo...

Q: You wish to buy a house. The market value of the house is $650,000 and you have saved $120,000 as a ...

A: Interest Rate = 6.5% Time Period = 26 Years Market Value = $650,000 Down Payment = $120,000

Q: a. If the interest rate is 5.0% per year, approximately how long will it take for your money to quad...

A: As per Bartleby Honor Code, when multiple questions are asked, the expert is required only to solve ...

Q: or an investor who plans to purchase a bond that matures in one year, the primary concern should be ...

A: Step 1You obtain the face amount of the bond and any interests that have accumulated since the last ...

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.