An investor is considering an investment that will pay $2,290 at the end of each year for the next 10 years. He expects to earn a return of 12 percent on his investment, compounded annually. Required: a. How much should he pay today for the investment? b. How much should he pay if the investment returns are received at the beginning of each year? (For all requirements, do not round intermediate calculations and round your final answers to the nearest whole dollar

Q: The current zero-coupon yield curve for risk-free bonds is as follows: . What is the price per $100 ...

A: YTM for maturity 2 years (r) = 5.47% n = 2 years Face value (F) = $100

Q: ¿How much is the Customer Lifetime Value? (Select best answer) Assumptions: Retention Rate= 75%, Av...

A: We need to write down what we have given in this Question Retentions Rate=75% Average Annual Costume...

Q: A lease agreement valued at $25,000.00 requires payment of $900.00 at the beginning of every quarter...

A: Given Information : Value of Lease = $25,000 Payment made each quarter = $900 Number of years = 12

Q: Assume that today’s settlement price on a CME EUR futures contract is 1.10405. Your performance bond...

A: Performance bonds are the financial instruments that are issued by one party to the other as a guara...

Q: How much is the expected rate of return for Stock A? Use a whole number in percent form, no space, n...

A: Highly favourable probability (P1) = 0.1 Favourable probability (P2) = 0.3 Normal probability (P3) =...

Q: A bond with 5 years to maturity and a coupon rate of 6% and face value of $20,000. If the required r...

A: The market price of the bond is calculated as present value of cash flows of bond

Q: The analyst estimates that after three years the National Inc’s free cash flow will grow at a consta...

A: The value of company can be calculated as per the free cash flow valuation model

Q: Sara met with a financial planner and has determined that she will need $1,250,000 when she retires ...

A: Retirement amount needed (FV) = $1,250,000 n = 30 years = 360 months r = 5.65% per annum = 0.47083% ...

Q: Three years ago Samia issued 10 year bonds that pays 5% coupon annually and sells for $1045. Calcula...

A: One of the most important factors in bond valuation is yield. Bonds are compared based on their yiel...

Q: Use the Excel "PV" function to find the present value of a 10% annual coupon bond with a $1,000 face...

A: Bond Bonds have an annual coupon rate attached to themselves, which the bondholder receives each yea...

Q: 5. Portfolio Beta Portfolio beta can be computed in the same way as portfolio return was computed. I...

A: Beta is used in determining the risk premium to be expected from investment made in a asset because ...

Q: Explain the term receivable float and the ways to avoid receivable float loss. Provide a hypothetica...

A: Receivable float means Float is the time gap in the receivables management   a) Period of credit off...

Q: 7. Find the amount of simple interest on a loan of $4,500 at  9 1 2%  interest for 13 years. $427.5...

A: Simple interest can be calculated by using this equation Simple interest =Principal*Rate*Time

Q: A copying machine costs P 40,000, has a life of 4 years with a salvage value of P 5,000.  The follow...

A: Total number of copies in all 4 years = Sum of copies in all years = 1800 + 2200 + 3000 + 4000 =1100...

Q: Metallica Bearings, Incorporated, is a young start-up company. No dividends will be paid on the stoc...

A: Share price Share price is the current market price of the share. It is the price of the share at wh...

Q: A contractual relationship in which an individual must act in the best interests of a principal when...

A: Solution:- Lease agreement is the agreement under which the owner of the asset (lessor) grants a rig...

Q: Bulldogs Inc. has sold 2,000 shares of P200 par, 4% preferred stock at an issue price of P184 per sh...

A: Issue price (P0) = P184 Par  value = P200 Dividend rate = 4% Annual dividend (D) = 200*0.04 = P8 Iss...

Q: An amount of ₱234,000 is deposited in a bank paying an annual interest rate of 6.15%, compounded con...

A: Solution:- Continuous compounding means that the interest is getting compounded every moment. Future...

Q: An accountant for Bulldogs Inc. must calculate the weighted average cost of capital of thecorporatio...

A: Weighted average cost of capital(WACC) is the average or overall cost of capital of the company whic...

Q: a parent on the day of the child is born wishes to detrmine what lump sum would have to be paid into...

A: An annuity is a contract between you and an insurance company in which you make a lump-sum payment o...

Q: Black Inc.'s capital structure consists entirely of long-term debt and common equity. The cost of ca...

A: Cost of long term debt = 5% Tax rate = 40% After tax cost of debt (RD) = 5%*(1-0.40)                ...

Q: 3. Find the amount (in $) of interest and the maturity value of the loans. Use the formula  MV = P ...

A: Solution:- When an amount is invested somewhere, it earns interest and the amount receivable at matu...

Q: One of the advantages to the firm of financing with preferred stock is that 65% of the dividends pai...

A: Preferred stockholders are the shareholders to whom dividends are paid out before paying to the comm...

Q: A project your firm is considering for implementation has these estimated costs and revenues: an inv...

A: NPV is used to calculate the net present value of investment or project. NPV method is used to decid...

Q: Two types of heat exchangers (y and z) would like to compare the cost of use in a particular chemica...

A: EUAC is uniform equivalent annual cost which is equivalent all cost including the cost of acquisitio...

Q: A firm's current ratio has steadily increased over the past 5 years, from 1.9 to 3.8. What would a f...

A: Current ratio measures the liquidity  which is calculated by dividing current assets by its current ...

Q: 13. The following information relates to two companies   Alpha plc Beta plc Profit after tax £2...

A: Business valuation is used to find out what economic value the owner gets from investing in the said...

Q: You are an investor who is interested in purchasing AC shares which is currently trading at a price ...

A: Growth rate = 3% Required return = 8% Expected dividend = P25

Q: Severn plc is assessing a new project to expand its business. It will require an investment of £20m ...

A: Investment = £20,000,000 Annual cash inflow for first 5 Years = £1,750,000 Annual cash inflow after ...

Q: If today 1 US Dollar can buy 3 Korean Won and 1 Korean Won can buy equals 2 Philippine Peso, what is...

A: Exchange rate (ER) is a value at which two or more currencies are exchanged or traded. To make the p...

Q: Company A and B both expected rates of return of 18%. Company A has a Standard Deviation of 45% and ...

A: Expected returns of both A and B = 18% Company A standard deviation = 45% Company B standard deviati...

Q: Suppose a ten-year, $1,000 bond with an 8.1% coupon rate and semiannual coupons is trading for $1,03...

A: A bond is defined as the financial instrument that is used to raise capital from the market at a sta...

Q: udy has just completed the development of a better face shield for health workers. The new product i...

A: Annual revenue = $150,000 Investment = $9000.34 Life = 5 years Salvage value = $3000 Working capital...

Q: A Loan amounting to PHP150,000 was secred dated, January 1, 2016. the loan will be paid by means of ...

A: The present value of loan is equal to the present value of all future term installments discounted a...

Q: 22. The company has P5,000,000 n in inventory and P2,000,000 in accounts receivable. Its a daily sal...

A: Cash conversion cycle is the time period that the company takes to convert its inventory into cash. ...

Q: paid P8,220 interest at 12.6% for 15 month loan. What was the original loan? 5. Antonieta Zoleta bor...

A: The future value of the amount is value of amount today plus interest accumulate over the given peri...

Q: A couple purchased a home 20 years ago for $200,000. The home was financed by paying 10% down and s...

A: Cost  of home = $200,000 Down payment = 10% Loan amount (PV) = 200,000*(1-0.10)                     ...

Q: Franco wants to accumulate P150,000 in order to make the down payment for a new car. He plans to inv...

A: Annual investment (P) = P25,000 Future value required (FV) = P150,000 Interest rate (r) = 8% Period ...

Q: The Black-Scholes model is used by Bulldogs Inc. to value call options on the stock of National Inc....

A: There is one popular mathematical model, which is used for calculation of value of call or put optio...

Q: 11.  Amina has a jewellery business in a well-established shop. Her most recent income statement sho...

A: Solution:- Sales implies the revenue generated by an entity from its primary operations, while gross...

Q: E 14956.75 7. Edward Cariaga loans P35,300 at 6½% simple interest, how long it will take him to get ...

A: Simple Interest is the method in which we calculate the interest on a specific principal amount at a...

Q: are the rates stated or quoted in the terms or contract of a particular security. Which is false abo...

A: Nominal interest rate of bond or any security has many components risk free rate, inflation premium,...

Q: Consider the following information given to > answer the series of questions below to determine the ...

A: Solution:- We know, expected rate of return in case of data (ie. Which involves probability) is the ...

Q: Find the present value of $6000, due after 4J years, if money can earn interest at the rate (.08,m =...

A: Time value of money (TVM) is used to measure the value of money at different point of time in the fu...

Q: The following data are gathered for: · The real risk-free rate is 1.25% · Inflation ...

A: The real risk-free rate  (RP) = 1.25%Inflation premium is constant (IP) = 2.50%Default risk premium ...

Q: An investor is evaluating the common share of Bulldogs Inc. which has a beta of 1.8. The expected re...

A: Risk free  rate = 2% Market return = 8% Beta = 1.8

Q: . A one-month European put option on a non-dividend stock is currently selling for 2.50$. The stock ...

A: An European put option can only be exercised on its maturity. It is a kind of derivative option that...

Q: A construction company agreed to lease payments of $622.77 on construction equipment to be made at t...

A: Lease gives the right of use the equipment during the stated period and periodic payments are to be ...

Q: certain product payment offers 30/ 25/ 18/5 discounts. What is the total net price rate /hat is the ...

A: There are multiple discounts given on the product but they may be converted into equivalent single d...

Q: The required price per share will be $

A: Face Value or Maturity value of Bond = $1000 Conversion ratio = 31  Required price of share = Face V...