American Manufacturer has the opportunity to invest in a 4 year project that required an initial investment of $900,000 and generated cash flow of $100,000 in each of the first 2 years and $400,000 in each of the last two years. If the firm has a weighted average cost of capital of 10%, the firm should ________ the project because

Q: The current yield on the bond is  b) The yield to maturity of the bond is

A: Current Yield on Bond: It is estimated by dividing the annual coupon payments by the price of the…

Q: 8 years ago a company installed a robot that today has a market value of $60,000 and every year it…

A: Given, Value in market of the robot=$60,000 Decline in the value each year= $2,000. Value of  MARR…

Q: One of the mutually exclusive alternatives below must be selected Base your recommendation on…

A: Incremental Analysis: When two mutually exclusive projects have equal lives, incremental analysis…

Q: An equally-weighted portfolio that consists of 13 stocks has a beta of 1.5. If you replace one of…

A: Beta value of a stock can be defined as the volatility of the stock in relation to the market. It is…

Q: 12. A company has agreed to pay $4.2 million in 6 years to settle a lawsuit. How much must it invest…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The amount invested is…

Q: QS 24-23 (Algo) Internal rate of return LO P4 Perez Company is considering an investment of $30,490…

A: Internal Rate of Return:  Internal Rate of Return (IRR) is the required rate of return at which the…

Q: A company issued 10-year $1,000 par value bond with a conversion ratio is 50. What is the bond…

A: Conversion price can be calculated by dividing the par value of bond by conversion ratio Conversion…

Q: The minority stakeholders may exchange their P100 par value shares for P400 cash in case they do not…

A: When an acquiring business tries to take over a target company against the target company's…

Q: Suppose the 1-year domestic interest rate is 0.28, keeping in mind that means (100\times×0.28)%.…

A: Domestic Interest rate = 28% Expected exchange rate = 59 Current spot exchange rate = 50

Q: SLO-5.3. The ease with which an investment can be converted into cash is called * Oprofitability…

A: Investment means engaging your funds to generate income for the future. Basically there are two…

Q: You are given the following information concerning three portfolios, the market portfolio, and the…

A: Risk and return are two parts of investment. There is a positive relation between the risk and…

Q: Yesterday, John bought a ten-year, $50,000 coupon bond with an annual rate of 5% compounded…

A: Solution:- Market rate of return on bond means the rate of return required by the investors in…

Q: Marie and Danny Would like to buy a house for $220,000. The down payment for the mortgage is 30% of…

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

Q: he Zinger Corporation is considering an investment that has the following data: Year 1 Year 2 Year 3…

A: Pay back period is amount of period required to recover initial investment of the project from the…

Q: All of the following are the names of the three major credit bureaus EXCEPT Equifax Experian…

A: Credit bureaus are the agencies which provide information to lenders and creditors which helps in…

Q: Clifford, Inc., has a target debt-equity ratio of .80. Its WACC is 9.1 percent, and the tax rate is…

A: WACC is a weighted average cost of all the sources of capital. It is equal to the sum of products of…

Q: how does asx impacts liquidity of new zealand equity marke

A: ASX is the Australian Securities Exchange. ASX is essentially an Australian public company and it…

Q: Cost of Equity with and without Flotation Jarett & Sons’s common stock currently trades at $30.00 a…

A: Cost of Equity without floatation cost: Given, Next Year's Dividend = 1 Share Price = 30 Growth = 4%…

Q: Lupo, Inc., has an average collection period of 52 days. Its average daily investment in receivables…

A: a) Given,  Average collection period = 52 days Average collection period = 365/ Receivables turnover…

Q: Chris invests $19,000 at 4% simple interest for 7 year. How much is in the account at the end of the…

A: Answer -  Formula for Simple Interest : A = P(1 + rt)   Given: First, converting R percent to r a…

Q: If you are an investor or capitalist, what are the important things you should consider before…

A: Limited partnerships (LPs) are common forms of venture capital businesses, in which the partners…

Q: manufactures and sells gas-powered electricity generators. It ase a new line of fuel injectors from…

A: AW analysis we calculate the annual equivalent cost of all cost that is equivalent to all cost and…

Q: At what rate converted annually will make PhP 3,287 accumulate to PhP 3,969 in 4 years?

A: Here, Present Value is Php 3,287 Future Value is Php 3,969 Time Period is 4 years

Q: Raymund just won the lottery. He can get his prize either in the form of $40,000 at the end of each…

A: Prize money at the end of each year us $40,000 Single amount paid immediately is $500,000 Interest…

Q: Frederic, Inc. a successful nursery, is considering several expansion projects. All of the…

A: Expected return - It is the amount of profit or loss an investor anticipates on investment by…

Q: Cullumber Company is considering a long-term investment project called ZIP. ZIP will require an…

A: Net Present value is present value of cash flow minus initial investment

Q: Palmer products has outstanding bonds with an annual 8% coupon. The bonds have a par value of $1,000…

A: Solution: Yield to maturity (YTM) means the rate of return yield by the bond if it is held till…

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A: Turn over ratio It measures the ability of the firm to effectively utilizing its assets and…

Q: Spot price Buy at ATM call @ 12 Sell OTM call @ 13 Net payoff 8 2.75 -3.6 -0.85 9 1.75…

A: Here,

Q: hat it the firm’s cash conversion cycle?

A: Cash Conversion Cycle: It represents the period in which a firm converts the investments in…

Q: Find the future value of the following ordinary simple annuity. Periodic Payment $791.00 Payment…

A: Quarterly payment (P) = $791 Period = 3.25 Years Quarterly periods (n) = 3.25*4 = 13 Interest rate =…

Q: Why does have equity habve a higher vost of capital compared to debt?

A: Reasons why equity have higher cost of capital than debt is 1) Debt has tax advantages I,e tax…

Q: Melvin Indecision has difficulty deciding whether to put his savings in Mystic Bank or Four Rivers…

A: Given,In this question, we are going to solve the payment made by melvin in terms of the…

Q: A company has a choice of two alternatives to improve their production process. Each alternative…

A: Explanation : When Two Alternative was given and both having positive NPV but we can choose only one…

Q: what is the expected return of the portfolio? (Format: 1.11%)

A: Expected Return on Portfolio: It is estimated by the sum of individual security returns which is…

Q: An equally-weighted portfolio that consists of 13 stocks has a beta of 1.5. If you replace one of…

A: Beta refers to a measure of a market risk that cannot be diversified means it is a measure of…

Q: For a 10% $1,000 coupon bond, when the market interest rate is greater than 10%, the value of the…

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

Q: A gold-mining firm is concerned about short-term volatility in its revenues. Gold currently sells…

A: Data given: Current market price of gold per ounce  = $2100 Upper Price of gold per ounce = $2200…

Q: what it the firm’s cash conversion cycle?

A: Cash Conversion Cycle: It is a metric used in finance that indicates the time it takes for a firm…

Q: Suppose we observe the prices of 7-year zero-coupon (with a face value of $91.36) and year 6-to-7…

A: Zero coupon bond refers to the bond issued at discount. Zero coupon bond is a debt security that…

Q: 4 QUESTION 9 A wealthy donor has given $400,000 to a university and specifies that it is to be used…

A: An individual usually saves for the future through depositing the smaller amount of the funds from…

Q: You put $10,000 in an account earning 5%. After 3 years, you make another deposit into the same…

A: Amount deposited today us $10,000 Interest rate is 5% Account balance after 7 years is $20,000 To…

Q: Kobe Ltd recently sold 15 million shares in an IPO. The offering price was Sh.25.50, and the…

A: Floatation Cost is the cost which is incurred by the company which has newly issued securities…

Q: A call center agent receiving a monthly salary of P21,000 with mandatory annual deductions of…

A: Gross salary is a monthly or annual salary of an individual before deducting any deductions

Q: Bartlett Car Wash Co. is considering the purchase of a new facility. It would allow Bartlett to…

A: Accounting rate of return can be calculated as: = Average Net Profit/ Average Investment * 100 It…

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A: Loan is a borrowed amount of money for a fixed time period. The fee for borrowing the funds is…

Q: Find the value (using Binomial Tree) of a European style call option on an underlying stock which is…

A: Options are instruments to hedge risk. They are a type of derivative, whose value is derived from…

Q: RCISES . The management of Sisa Fitness Center is planning to replace an old P30,000. The old…

A: Given: Particulars Year 0 Initial investment           -50,000 Installation           -10,000…

Q: Question The following economical indictors are referring to types of project (A and B). Answer the…

A: Investment Appraisal: It is  the analysis  to consider  profitability , affordability and strategic…

Q: You have $2,100 to invest for 2 years. Which account should you choose to have the largest account…

A: Future Value: It is the future worth of the current amount and is computed by compounding the…

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.