• 8.5% Annual Percentage Rate! 48 month financing on all Mustangs in stock. 60 to choose from. • ALL READY FOR DELIVERY! Prices starting as low as $21.599. • You just add sales tax and 1% for dealer's freight. We will pay the tag. title, and license. • Add 4% sales tax = $863.96 • Add 1% dealer's freight = $215.99 • Total purchase price = $22,678.95
Q: What single payment at the end of year 5 is equivalent to an equal annual series of payments of $600...
A: Cash flows refer to the series cash inflows and cash outflows over the useful life of the project co...
Q: The current and forward rates between the Japanese yen and the US$ are $o.110 and $0.108% respective...
A: When the forward trade costs less than a spot trade, there is a forward discount. Return on a forei...
Q: Briefly discuss the pros and cons of the three (3) approaches used by analysts to value a company’s ...
A: Valuing a company’s equity means determining the value of equity for the firm. It is very important ...
Q: A potential project requires the purchase of $612,000 of equipment. The equipment will be depreciate...
A: 1. Initial investment: $587,000 Year 2: - Capital from year 1: $104500 - Sales: $418,000 - Cash expe...
Q: Kellogg's, maker of Pop-Tarts, recently introduced Pop-Tarts Gone Nutty! The new product include...
A: The formula used for net unit contribution will be as follows: = Selling Price per unit - Variable ...
Q: Ann Tyler, with the help of a financial newsletter and some library research, has been able to assig...
A: Expected value of the investment is the value which is expected to be generated from the investment....
Q: NatNah, a builder of acoustic accessories, has no debt and an equity cost of capital of 17%. Suppos...
A: Given information: Equity cost of capital is 17% Market debt to value ratio is 0.50 Debt cost of cap...
Q: Nowadays it is very important to reduce one’s carbon “footprint” (how much carbon we produce in our ...
A: Formula for calculating monthly IRR: Formula for calculating annual effective IRR:
Q: You are comparing two investment options that each pay 6 percent interest, compounded annually. Both...
A: Investment A: Cashflows - Year 1: $2000 Year 2: $5000 Year 3: $5000 Discount rate = 6% So, Present ...
Q: Tinberg Cans expects sales next year to be $50,000,000. Inventory and accounts receivable (combined)...
A: In simplest terms, the amount of external funds needed (EFN) will be equal to the expected increase...
Q: What is the standard deviation of stock A if it has the following probabilities and rate of returns....
A: Standard deviation measure the value deviated from mean it mainly measure the risk associated with t...
Q: It is currently 2020, and you are trying to estimate the value of Ford’s new car project, the Starli...
A: Free cash flows are the operating cash flows reduced by the increase in working capital and increase...
Q: How is it possible for a firm to grow itself out of business and how can this be guarded against as ...
A: Finance managers are accounting experts concerned for a company or organization's financial well-bei...
Q: When faced with cash flows of equal magnitude occurring at different points in time, we prefer to: a...
A: The time value of money concept is based on the idea that, money received today is more worthy tha...
Q: Krystal plans to save $500 at the end of Year 1, $600 at the end of Year 2, and $700 at the end of Y...
A: Money she will save by end of year 3 is future value of all yearly payments
Q: 1. The future value of $200 received today and deposited at 8 percent for three years is
A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...
Q: An investor pays $30,000 for a convertible bond (one that can be converted into shares of corporate ...
A: The convert price is the price per share at which a convertible security may be exchanged into commo...
Q: A firm has some $1,000 par value bonds outstanding that pay a 12 percent interest rate. The bonds pa...
A: Given information: Par value of bond is $1,000 Coupon rate is 12% Number of years to maturity is 10,...
Q: Explain the difference between conventional mortgages, reverse mortgages, and second mortgages.
A: Difference between Conventional mortgage ,reverse mortgage , second mortgage Mortgage Mortgage is a ...
Q: ABC Co. just completed an IPO with an investment back in a firm commitment basis. The firm issue 6 m...
A: A type of publicly traded security that provides ownership and voting right to its holder is term as...
Q: Series of deposits worth P10, 000, P20, 000 P8, 000 and P5,000 were made at t=0,1,4,6 quarter, respe...
A: Future value is the worth of today’s amount on a future date.
Q: In the past year, TVG had revenues of $2.95 million, cost of goods sold of $2.45 million, and deprec...
A: Times Interest Earned = Earnings Before Interest and Tax/ Interest Expense
Q: Assume that both portfolios A and B are well diversified, that E(rA) = 20% and E(rB) = 15%. If the e...
A: Given: E(rA) = 20% E(rB) = 15% BetaA = 1.3, BetaB = 0.8
Q: Please answer all questions
A: Given Information: Payback Period : 2.50 Years WACC :7 % Years Cash Flows (in $) 1 350,000 2 ...
Q: How much money would have to be deposited today to accumulate:
A: A theory that helps to compute the present or future value of the cash flows is term as the TVM (tim...
Q: If you begin investing at age 45 instead of age 40, how much more do you need to invest per month to...
A: For calculating the monthly difference in order to create $ 1M at retirement, I have used the FV(Fut...
Q: You have $33,556.25 in a brokerage account, and you plan to deposit an additional $5,000 at the end ...
A: given, FV = $220000 r= 12% time line
Q: Henry Fuller has agreed to purchase a used automobile for $13,500. He wishes to limit his monthly pa...
A: The portion of the purchase price of goods and services that are paid immediately at the time of pur...
Q: What is the required return on an investment with a beta of 1.3 if the riskfreerate is 2.0 percent a...
A: CAPM evolved as a way to measure this systematic risk. Sharpe found that the return on an individual...
Q: Max wants to monitor his expenses for a month. What should he do first? Choose the correct answer b...
A: Expenses need to be monitored carefully by a rational person to manage personal finance and to set u...
Q: PT Cinta Flora is a firm specializing in developing Bonsai. The firm has three choices regarding whe...
A: Capital budgetingA technique that is utilized in the evaluation of the capital expenditure project/p...
Q: Explain why the following statement is true: "All else the same, firms with relatively stable sales ...
A: 1.Stable sales indicate stable cash flows which means that the firm will be able to service its obli...
Q: Company A’s stock has an expected return of 0.10 and a standard deviation of 0.25. Company B’sstock ...
A: Computation of expected return as follows: Expected Return of the portfolio = (Weight of stock A ×Ex...
Q: Assume that a stock is giving $2 dividends and the expected rate of return is 10%, how much the stoc...
A: Expected return is the return expected on the financial securities using some model like capital ass...
Q: Best Foods forecasts the following cash flows on a special meat packing operation under consideratio...
A: A discount rate at which the net present worth of an investment is equal to zero is term as internal...
Q: A bank pays 4% nominal annual interest on special three-year certificates. What is the effective ann...
A: Effective Annual Rate is a modified rate of return where it considers the compounding effect. Intere...
Q: First National Bank pays 5.3% interest compounded semiannually. Second National Bank pays 6% interes...
A: FV =PV(1+rm)nm n = no of years m = no of compounding in year
Q: You have $12,500 you want to invest for the next 20 years. You are offered an investment plan that w...
A: Amount we will have at the end of 20 years is future value of current investment
Q: What is the value of a perpetuity that pays $100 every 4 months forever? The discount rate quoted on...
A: Given information: Cash payment of $100 APR is 5.70% Number of periods is for every 4 months
Q: If PV=$100, i=2%, n=5 years, and the investment compounds annually, what is the equation for Future ...
A: Given Information: Present Value (PV) : $ 100 Rate (i) : 2 % Time Period (n) : 5 years
Q: You are considering buying stock A. If the economy grows rapidly, you may earn 30 percent on the inv...
A: The return on an investment as estimated by an asset pricing model. It is calculated by taking the a...
Q: Consider an investment project with the following repeating cash flow pattern every four years forev...
A: Annual equivalence of cash flows is used to convert the cash flows to periodic amounts. It is calc...
Q: With $10,000 available, you have two investment options. The first option is to buy a certificate of...
A: Bond is one of debt security which is issued by corporations or government for financing. It provide...
Q: Assume that thr nominal interest rate is 14%, the risk premium is 4% and real interest rate is 3%, f...
A: Given: Nominal interest rate = 14% Risk premium = 4% Real interest rate = 3%
Q: Suppose the production function in an economy is Y = KU.LU.S, where K is the amount of capital and L...
A: Given: Y=K0.5L0.5 Where, K is the amount of capital. L is the amount of labor. There are 25 and 9 u...
Q: A firm has decided to manufacture biodegradable golf tees. These are two production processes availa...
A: MARR=15%Let volume of tees be X.Process ATotal cost of Process A=$22,000×A/P,15%,10+$15,000+0.15×X-$...
Suppose you want to buy a car. You have surveyed the dealers' newspaper advertisements, and the one shown has caught your attention. You can afford to make a down payment of $2,678.95, so the net amount to be financed is $20,000.
(a) What would the monthly payment be?
(b) After the 25th payment, you want to pay off the remaining loan in a lumpsum amount. What is this lump sum?
Step by step
Solved in 3 steps
- Cowboy Construction buys materials on account from Highes. Highes offers a 2 percent discount for invoices paid within 10 days. Full payment is due within 90 days. But Cowboy Construction routinely pays its invoices on the ninetieth day. If Cowboy’s effective tax rate is 42 percent, what is the cost of capital for accounts payable in percentage? Excel calculationMr. Flores made a money market placement of P1, 000.000 for 30 days at 7.5% per year. If the withholding tax is 20%, what is the net interest that Mr. Flores will receive at the end of the month? Ans. Net Interest = P5, 000 A bill for a motorboat specifies the cost as P1, 200 due at the end of 100 days but offers a 4% discount for cash in 30 days. What is the highest rate, simple interest at which the buyer can afford to borrow money in order to take advantage of the discount? Ans. r = 21.4% The monthly demand for ice cans being manufactured by Mr. Sison is 3,200 pieces with a manually operated guillotine, the cost cutting price is 25 pesos per piece. An electrically operated hydraulic guillotine is offered to Mr. Sison with the price of 275,000 pesos and which will cut by 30% less the unit cutting cost of money. How many months will Mr. Sison be able to recover the cost of the machine if he decides to buy now. Ans. 11.5 monthsCommercial paper is usually sold at a discount. Mucus Corporation has just sold an issue of 90-day commercial paper with a face value of $1 million. The firm has received initial proceeds of $978,000. Show Solutions and Explanation. (Note: Assume a 365-day year.) A. What effective annual rate will the firm pay for financing with commercial paper, assuming that it is rolled over every 90 days throughout the year? (Format: 1.11%) B. If a brokerage fee of $9,612 was paid from the initial proceeds to an investment banker for selling the issue, what effective annual rate will the firm pay, assuming that the paper is rolled over every 90-days throughout the year? (Format: 11.11%)
- Zerox Copying Company plans to borrow $174,000. New Jersey National Bank will lend the money at one-half percentage point over the prime rate at the time of 12.50 percent (13 percent total) and requires a compensating balance of 24 percent. The principal in this case will be funds that the firm can effectively use in the business. This loan is for one year. a. What is the effective rate of interest? (Input your answer as a percent rounded to 2 decimal places. Use a 360-day year.) b. What would the effective rate be if Zerox were required to make four quarterly payments to retire the loan? (Input your answer as a percent rounded to 2 decimal places.)Lancaster Lumber buys $8 million of materials (net of discounts) on terms of 3/5, net 30, and it currently pays on the 5th day and takes discounts. Lancaster plans to expand, which will require additional financing. Assume 365 days in year for your calculations. If Lancaster decides to forgo discounts, how much additional credit could it obtain? Write out your answer completely. For example, 5 million should be entered as 5,000,000. Do not round intermediate calculations. Round your answer to the nearest cent.$ What would be the nominal cost of that credit? Do not round intermediate calculations. Round your answer to two decimal places. % What would be the effective cost of that credit? Do not round intermediate calculations. Round your answer to two decimal places. % If the company could get the funds from a bank at a rate of 10%, interest paid monthly, based on a 365-day year, what would be the effective cost of the bank loan? Do not round intermediate calculations. Round your…Mavericks Cosmetics buys $4,691,301 of product (net of discounts) on terms of 7/10, net 60, and it currently pays on the 10th day and takes discounts. Mavericks plans to expand, and this will require additional financing. If Mavericks decides to forego discounts, what would the effective percentage cost of its trade credit be, based on a 365-day year? Answer in % terms to 2 decimal places.
- Commercial paper is usually sold at a discount. Fan Corporation has just sold an issue of 90-day commercial paper with a face value of $1 million. The firm has received initial proceeds of $978,000. (Note: Assume a 365-day year.) 1.What effective annual rate will the firm pay for financing with commercial paper, assuming that it is rolled over every 90 days throughout the year? Format: 1.11% 2.If a brokerage fee of $9,612 was paid from the initial proceeds to an investment banker for selling the issue, what effective annual rate will the firm pay, assuming that the paper is rolled over every 90 days throughout the year? Format: 11.11%Commercial paper is usually sold at a discount. Tan Corporation has just sold an issue of 90-day commercial paper with a face value of $1 million. The firm has received initial proceeds of $978,000. (Note: Assume a 365-day year.) 1.If a brokerage fee of $9,612 was paid from the initial proceeds to an investment banker for selling the issue, what effective annual rate will the firm pay, assuming that the paper is rolled over every 90 days throughout the year? Format: 11.11%Snider Industries sells on terms of 2/10, net 35. Total sales for the year are $600,000. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 40 days after their purchases. Assume a 365-day year. What is the days sales outstanding? Do not round intermediate calculations. Round your answer to the nearest whole number. days What is the average amount of receivables? Do not round intermediate calculations. Round your answer to the nearest dollar. $ What would happen to average receivables if Snider toughened its collection policy with the result that all nondiscount customers paid on the 35th day? Do not round intermediate calculations. Round your answer to the nearest dollar. $
- 1) The total quality sold is 500 but 20% of your revenue total is service and 80% is sales. Of the sales revenue total, 50% of these sales are on account. 2) On April 1st this week you take out a $50,000 loan to then buy a 3-year bond with a face value of $50,000 and stated rate of 7% which makes interest payments bi-monthly (twice a month). The market rate of interest on April 1st is 7.5%. answer this transaction in excel . show the accounts and t accounts in excel.Mavericks Cosmetics buys $4,691,301 of product (net of discounts) on terms of 7/10, net 60, and it currently pays on the 10th day and takes discounts. Mavericks plans to expand, and this will require additional financing. If Mavericks decides to forego discounts, what would the effective percentage cost of its trade credit be, based on a 365-day year?nider Industries sells on terms of 2/10, net 25. Total sales for the year are $600,000. Thirty percent of customers pay on the 10th day and take discounts; the other 70% pay, on average, 30 days after their purchases. Assume a 365-day year. What is the days sales outstanding? Do not round intermediate calculations. Round your answer to the nearest whole number. 24 days What is the average amount of receivables? Do not round intermediate calculations. Round your answer to the nearest dollar. $ What would happen to average receivables if Snider toughened its collection policy with the result that all non-discount customers paid on the 25th day? Do not round intermediate calculations. Round your answer to the nearest dollar.