6. Given a nominal rate of 15% čómpounde for 12 years in an ordinary annuity. Determine the following: a. Capital recovery factor b. Future worth Factor C. Sinking fund Factor

Q: If a broker quotes a price of 111.25 for a bond on September 10, what amount will a client pay per $...

A: Solution : Given, Face value = $1,000 Coupon rate = 7%     Accrued interest = Face value * coupon ra...

Q: On October 1, 2021, POGI Company purchased 4,000 of the P1,000 face amount, 10% bonds of GANDA Compa...

A: Bonds are defined as the units of the corporate debt, which are issued through the companies as well...

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

A: Given: Closing Market Index value Closing Price for PG Closing Price for F   2278.87 9...

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: 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: Question 2: (a) You wish to buy a house. The market value of the house is $650,000 and you have save...

A: The present value of the loan is equal to the sum of the present values of all future monthly instal...

Q: Fred expects to earn a total of 15 percent on his investments. He recently purchased shares of CC Co...

A: Expected return = 15% Price of share = $20 Dividend paid = $1

Q: EncryptCo is considering a project with a $50,000 first cost that returns $12,000 per year. Assume t...

A: The Payback Period is the period of time it takes to return the cost of an original investment by th...

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: Suppose the yield on a 10-year T-bond is currently 5.05% and that on a 10-year Treasury Inflation Pr...

A: Given: 10 year Treasury bond yield =5.05% 10 year Treasury inflation = 1.80% MRP on T bond = 0.90%  

Q: Big Rock’s directors are looking to expand into a new suite of services. Although they are doing qui...

A: The bond market, also known as the debt market, fixed-income market, or credit market, refers to all...

Q: Charmaine has just purchased an apartment at a price of $10 million. She made a down- payment of $4 ...

A: Loan amount (L) = $6 million n = 15 years = 180 months r = 3% per annum = 0.25% per month Let M = Mo...

Q: What amount of money deposited 35 years ago at 8% interest would provide a perpetual payment of $10,...

A: A perpetual payment is one that goes on forever. We will need to compute the present value of the pe...

Q: IL PROBLEM SOLVING 1. An equipment costing P250. 000 has an estimated life of 15 years with a bok va...

A: Declining balance method of depreciation It is one of the depreciation method to compute annual depr...

Q: tandard Deviation: 10.56% Average Risk Free Rate: 2.18% Using these figures: a) Select the best o...

A: The portfolio should have good return but should be also less risky so both should be there to be be...

Q: • A perpetuity will pay $900 per year, starting five years after the perpetuity is purchased. What i...

A: Given, Payment is $900 Interest rate is 11%.

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: 12. A 20-year 1000 par value bond is purchased at a discount. The bond pays annual coupons of 4%. Th...

A: Bonds are issued at discount or at premium of the par value of bond and discount is below par value ...

Q: Do you think investors should practice dollar cost averaging when investing their money? Why or why ...

A: Dollar-Cost Averaging: Dollar-Cost averaging is an investment approach that involves investing an an...

Q: There is a bank account with a balance of 10,000 dollars and an interest rate of 1% per year. How lo...

A: Rule of 72 Rule of 72 provides a numerical formula to roughly predict the time period required to do...

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

A: Given: Mortgage = $130,000 Periods = 15 Mortgage A: Interest rate =7.25% Closing cost = $1,700 Point...

Q: ABD Company's manufacturing overhead is 20% of its total conversion costs. If direct labor is PhP1,9...

A: Given  Direct Labour Php 1900000 Direct Materials Php 1700000 Manufacturing Overheads is 20% of the ...

Q: Consider the below three investment projects generating cash flows as follows: Project 1 2 3 4 A 1,0...

A: Here, Cost of capital =10% To Find: IRR =? MIRR =?

Q: The present value of an annuity of “Y" pesos payable annually for 8 years, wit the first payment at ...

A: We can use the concept of time value of money here. As per the concept of time value of money the wo...

Q: Calculate the Forward Price of an asset with the following data points: • Current Spot Price: $58.75...

A: The price of an underlying asset on a future date is known as forward price. This is the price at wh...

Q: Bonds: The financial manager wants to buy bonds A, B, C and he decided to buy different mumbers from...

A:

Q: Calculate the reciprocal latice for a1 *, a2 * and az * ā, - 48 ā, - 4ŷ and ā, = 32

A: The reciprocal lattice is defined as the set of all vectors that are wavevectors of plane waves in t...

Q: 12. A 20-year 1000 par value bond is purchased at a discount. The bond pays annual coupons of 4%. Th...

A: Bond is a debt-backed security which is used by investors to reduce risk and increase stable income ...

Q: Solve the quations: Tony and his team identified some risks during the first month of the Recreation...

A: In financial terms, risk is defined as the possibility that the actual gains from an outcome or inve...

Q: Suppose the demand functions for two products are q1 = f(p1, p2) and q2 = g(p1, p2) where p1, p2, q1...

A: Given  Demand function for q1 = f(p1, p2) Demand function for q2= g(p1, p2) where (p1, p2, q1, q2) a...

Q: ou are considering purchasing a refrigerator that costs $2,500 up front or $3,000 in 1 year. At what...

A: Here we will use the concept of time value of money. As per this concept worth of money today is mor...

Q: Assume that you start with a balance of $3900 on your credit card. During the first month you charge...

A: A credit card is a card that is issued by the bank to the users to enable that holder to pay a provi...

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: Tanysha plans to invest $15,000 at the beginning of each year for the next 10 years. If her invested...

A: An annuity is defined as the series of payment made each year for a definite period of time. In annu...

Q: Find the present value of an annuity P20,000 payable annually for 8 years, with the first payment at...

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

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

A: Annuity refers to the payments being made at regular intervals. Ordinary annuity is one where paymen...

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: 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: 5. Calculating IRR If the required return is 11 percent, should the firm accept the following projec...

A: 5. IRR is the required rate of return for the project to have zero Net Present value.   IRR can be c...

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

A: Data given: Market price = $500 per share. D1= $4 per share  Growth  rate = 9% per year for an indef...

Q: A portfolio that combines the risk-free asset and the market portfolio has an expected return of 6.4...

A: Given Expected return is 6.4% and standard deviation is 9.4%. The risk free rate is 3.4%  Expected r...

Q: The Dividend Discount model requires several conditions to hold in order to be valid. One such condi...

A: The dividend discount model (DDM) is a mathematical method for predicting a company's stock price ba...

Q: Suppose you plan to go on a dream vacation for your anniversary in 7 years from today and you plan t...

A: We need to use future value annuity formula to calculate monthly deposit to reach goal. PMT =FV(1+i)...

Q: Technical analysts believe that investors can use past price changes to predict future price changes...

A: Like Fundamental analysis, Technical analysis is alsoan analysis tool used by various day traders an...

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: Use to determine the regular payment amount, rounded to the nearest dollar, Consider the following p...

A: A mortgage is a type of loan in which a financial institution lends money at interest in exchange fo...

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: value of P30, 000 at the end of the per iod. Compute the depreciati nd its book value after 10 years...

A: We can also find the declining depreciation by declining rate which is founded in below table and it...

Q: Which of the following is not a cash disbursement item? a. Cash purchases b. Cash dividend payment c...

A: Cash disbursement is also called cash payment made in specific period.  

Q: A loan of Php 5,000 at an interest rate of 12% per annum for the period of February 1 to May 20. Det...

A: Ordinary simple interest = Principle loan * Interest rate * Number of days / 365 days in a year

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.