2. Calculating Payback An investment project provides cash inflows of $865 per year for eight years. What is the project payback period if the initial cost is $3,100? What if the initial cost is $4,300? What if it is $7,900?

Q: Bank pays 5 percent simple interest on its saving account, whereas Collar Bank pays 5 percent intere...

A: Simple interest is the interest on principal amount and no interest on interest but in the compounde...

Q: Pearson Motors has a target capital structure of 35% debt and 65% common equity, with no preferred s...

A: Solution:- Weighted Average Cost of Capital (WACC) means the average minimum return required by the ...

Q: What is an efficient market and why is it important for derivatives markets?

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one...

Q: ABD Co. manufactures textiles. ABD's manufacturing costs last year included the following salaries a...

A: Production or services labour that is assigned to a single product, cost centre, or work order is kn...

Q: Takao inherited regular endowment of P100,000 every end of 3 months for 10 years. However, he may ch...

A: Given: Particulars Amount Inherited amount(PMT)             100,000 Interest rate 14% Years...

Q: ABC recently completed a 5-for-1 stock split. Prior to the split, its stock sold for P120 per share....

A: Stock split = 5 for 1 Stock price before split = P120 Total market value increased = 15%  

Q: 1. Calculate the receivables turnover ratios and days to collect for Hayes Companies and Softee S 2-...

A: In this given case, the accounts receivables ,net of allowance is not given for Softee sodas for 201...

Q: Which factor below is causing many of the world's top financial institutions to consider movin their...

A: Several financial institutions are considering moving their global operations out of London and shif...

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

A: Given The value of investment over 4 years  

Q: arett & Sons' common stock currently trades at $24.00 a share. It is expected to pay an annual divid...

A: Answer  -    Given,  Current Price Per Share - $24 Dividend at end of Year - $2.50 Constant growth r...

Q: All the following activities are inflows to the company except.. O Decrease in any asset O Decrease ...

A: Note: This post has two distinct questions. The first has been answered below:

Q: Calculate the simple interest earned. Round to the nearest cent. P = $3900, r = 5.3%, t = 6 months

A: P = $3900 r = 5.3% t = 6 monnths

Q: 9-10. (Growth rate in stock dividends and the cost of equity) Doosan Babcock, a electronic equipment...

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions a...

Q: Procter and Gamble​ (PG) paid an annual dividend of $2.79 in 2018. You expect PG to increase its div...

A: Share prices fluctuate on a regular basis due to market factors and internal factors. Interest rate,...

Q: Q8. Composite Portfolio Performance Measures Big Rock has several investment portfolios with a local...

A: Solution:- Treynor measure measures the excess risk per unit of Beta. So, Treynor measure = (Return ...

Q: An rrsp is now worth $229,000 after contributions of $3000 at the beginning of every six months for ...

A: Worth of rrsp"Future Value" is $229,000 Paymant type is begining of the period. Semi annual Contribu...

Q: Sarafina has bonds in her portfolio. She wants to know about her position in the bond market. Specif...

A: Yield to maturity (YTM) is the total return expected on a bond if it is held until it matures. It is...

Q: to determine the regular payment amount, rounded to the nearest dollar. Consider the following pair ...

A: Mortgage is a value which is taken from external sources for a specific period. This amount is repai...

Q: the discounted amount is P8500 while the discount rate is 22 ure amount of the money?

A: The discount on the amount is the interest that is earned on the investment and face value is future...

Q: Saving cash in the bank is not as attractive as it was in the past, and Big Rock is looking to inves...

A: Markowitz Portfolio Theory was propounded by American Economist Harry Markowitz in the year 1952 in ...

Q: Match the correct type of bank risk with the appropriate associated statement. 1.The possibility th...

A: Risk is referred as the possibility of the something bad happened. It also involves in an uncertaint...

Q: How would an increase in the interest rate or a decrease in the number of periods until the payment ...

A: Interest rate is defined as an amount of an interest due per period as the proportion of amount, whi...

Q: All are true about the corporate stocks except ... a. Represents ownership interest in a corporation...

A: Corporate stocks are a part/ fraction of ownership in a corporation .

Q: Wine and Roses, Incorporated, offers a bond with a coupon of 8.0 percent with semiannual payments an...

A: Face value (FV) = $1000 Coupon rate = 8.0% Semi annual coupon amount (C) = 1000*0.08/2 = $40 Years t...

Q: . You buy a 6 year bond with an annual 5% coupon at par value, $1000. If the yield to maturity at th...

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

Q: compute the cost of equity for this project 2. compute the relevant cost of debt for this project ....

A: Cost of Equity: It represents the cost of raising equity capital from the investors. The company pa...

Q: what is my capital gain if: par value=1000 maturity=13 coupon rate= 7.4% interest paid annually ...

A: Capital gain is the gain from change in the price of an asset. It may be short term or long term in ...

Q: It is good to compute first the additional benefits that a project can give and the additional cost ...

A: Meaning of the given options:: a) Law of supply and demand- The law of demand states that when price...

Q: 1. Solve for Return of Risk Free Asset and its average Year Risk free rate (%) Inflation (%) Return...

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first...

Q: You win a lottery that will pay you $120,000 per month for 12 months, starting 1 month from now. Wha...

A: Present value of annuity in form of lottery winnings can be calculated as: = Annuity amount * Presen...

Q: get the amount and percent of the following problem   2001 2000 Amount Percent Sales Revenue 2,000,...

A: The base year will be 200 and amount of increase or decrease will be calculated amount of current ye...

Q: The higher the interest rate, the higher my future value will be. O True False

A: The given statement is correct. The future value is a concept of time value of money which states th...

Q: You are considering a loan with an annual rate of 8%. The mortgage is $130,000 with 180 monthly paym...

A: Payment Number Interest Payable Principal Payment Balance of Loan 1 ($130000.00*8%*1/12) ($1242.35...

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 5-year project will require an investment of $100 million. This comprises of plant and machinery w...

A: NPV is the difference between present value of cash inflows and present value of cash outflows. NPV ...

Q: The interest rate for the first five years of a $95,000 mortgage is 7.2% compounded semiannually. Mo...

A: Given, The mortgage loan is $95000 Rate is 7.2%  Term of amortization is 25 years Prepayment is $300...

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: Survey Corps lends money to improve their equipment, P10,000 due in 2 years, P25,000 due in 3 years,...

A: Given: Year Amount 2 10000 3 25000 5 50000

Q: Terex company has a beta of 1.7 and is trying to calculate its cost of equity capital. If the risk -...

A: The cost of equity can be calculated by using CAPM formula based on risk premium and risk free rate.

Q: Calculate the effective interest rate per month for an interest rate of 14% in continuously compound...

A: Effective annual rate (EAR) refers to a real interest rate which an investor is expect from his inve...

Q: Carlo Aldric wants to have P40,000 per year for 15 years during his retirement. What amount would yo...

A: Annual amount (P) = 40,000 Interest rate (r) = 5% Period (n) = 15  Years

Q: Dausin Design offers bonds with a coupon rate of 9 percent per year, paid semiannually. The yield to...

A: Solution:- We know, Current Price of a bond = Present Value of Cash Inflows receivables from bond. C...

Q: What are Magnum's total financing needs (that is, total assets) for the coming year?

A: Total financing needs (total assets) refers to the total amount of capital required for the company ...

Q: Pink has just sold equipment to Black. Pink is a US company who has USD accounting. Sale date is Mar...

A: There are variations in exchange rate due to which there are losses and gains on the exchange rate.

Q: An endowment fund is providing an annual scholarship of P50,000 for the first five years, P60,000 fo...

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at t...

Q: All the statements are incorrect regarding current ratio except? a. The more predictable a firm's ca...

A: Solution:- Current Ratio means the ratio of current assets to current liabilities of a firm. It meas...

Q: What form of partnership allows some of the investors to limit their liability?

A:   A limited partnership enables some of the partners to limit their liability. Under this condition...

Q: During the month of February, direct labor cost totaled PhP650,000 and direct labor cost was 40% of ...

A: Answer -  Calculation of manufacturing overhead -  Direct labor cost total = 650,000 Its equal prime...

Q: Secondary Market can be best described in which of the following statement? a. It is a market for an...

A: Stock market there are buying and selling of securities are done depending on demand and supply of s...

Q: A year ago, the Really Big Growth Fund was being quoted at an NTA of $21.50 and an offer price of $2...

A: The Holding period returns: The returns earned on an asset between the time it was purchased and sol...

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.