Cadillac Company is evaluating an investment that would have an eight-year life and would require a P300,000 purchase of equipment which has no salvage value. The project has the following additional information : Sales, P500,000; Cash Variable Expenses, P200,000; Fixed cash expenses, P150,000; Depreciation expense, P37,500.  If the company's required rate of return is 10%, what is the payback period of the investment. A. 3 years B. 2 years C. 2.5 years D. 2.67 years

Q: rate" is characterized by being The "discount administered by the Federal Reserve System and not…

A: The discount rate is the rate that the Fed charges to commercial banks and other financial…

Q: 1 A 0 $1,000 $800 YR NPWB 0 A=$1,200 1 2 3 YF

A: Net present value is difference between the present value of cash flow to the initial investment of…

Q: According to the assigned Root Capital materials, the organization is helping to O a. increase the…

A: Return on Asset: ROA: Return on assets indicates to investors how well a firm uses the money it has…

Q: Shawn is buying a new Jet Ski for $12,500. He is considering two credit options. Option A offers a 6…

A: There are various alternatives to financing. Taking a loan from a third party is an easily…

Q: proposed new product. The land `costs P15,000,000, the building costs P30,000,000, the equipment…

A: Capital budgeting is a financial commitment as well as an investment.By applying active, the…

Q: where do the collateral and security in the mortgage market belong? a. securities b. properties…

A: Collateral and security in the mortgage market belong to a. securities.

Q: Tower City aims to construct a new bypass between two main routes that will reduce commuter travel…

A: Here, Cost of Route is $15 million Cost Savings is 17500 people $100 per year Cost Expense is $7500…

Q: Joshua is saving up to buy a house. He invested $10000 at 3.5% per year, compounded quarterly. He…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: What is Behavioral Finance and how does it relate to effective asset allocation? expand your answer

A: The process of raising funds or capital for any type of spending is referred to as finance. It is…

Q: A 11-year, semiannual coupon bond sells for $938.52. The bond has a par value of $1,000 and a yield…

A: Price of the bond (P0) = $938.52 Maturity value of the bond (Z) = $1000 Semiannual yield to maturity…

Q: Stock A has a price of $75 per share and you own 300 shares. Stock B has a price of $240 per share…

A: Stock A price = $75 Stock A shares = 300 Total value of stock A = $22,500 (i.e. 300 * $75) Stock B…

Q: Determine the rate of return on the total investment and the payout period if the annual profit is…

A: Payback (payout) period refers to the period within which the sum invested by the company in a…

Q: Given fixed costs is Rs 1,00,000 selling price per unit is Rs 10 and variable cost per unit is Rs 6.…

A: As you have asked more than one question, we will answer the first question for you. To get answers…

Q: List the business, technological, and organizational challenges that were addressed throughout the…

A: Management is the administration of a company, a non-profit organisation, or a government agency.…

Q: Lace Company provided the following information during the current year: 500,000 Dividend received…

A: A cash flow statement is a part of a financial statement. It helps to reconcile the opening cash…

Q: CIT plc has an outstanding issue of £1,000-par-value bonds issued 5 years ago with a 12% coupon…

A: Bonds: It is a debt instrument issued by the firm to raise capital. The issuer pays coupon payments…

Q: 12. Suppose the current exchange rate is $1.84/£​, the interest rate in the United States is…

A: ​ Black-Scholes formula It is  a mathematical model for the dynamics of a financial market  that…

Q: Each Tuesday, Ryan Airlines reduces its one-way ticket from Fort Wayne to Chicago from $136 to $25.…

A: Airlines companies often offer attractive discounts on their ticket fares, when they try actively to…

Q: A tractor was purchased for $74486 and at the bank interest rate of 4.67% per year. The residual…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: A 20-year loan of 20, 000 may be repaid under the following two methods: i. amortization method with…

A: given that: Loan Amount=20000 Loan period= 20 years The excel formula is:

Q: A venture will provide a net cash inflow of $57,000 in Year 1. The annual cash flows are projected…

A: Year 1 cash inflow = $57,000 Required return = 0.156 Initial cost = $739,000 Growth rate to break…

Q: ote a price for a custom-designed doughnut machine to be delivered by the end of 2018. Once it is…

A: The minimum return on investment expected by the company is known as the required rate of return. It…

Q: RUZTIN 204/E2I Financial Manageme Networking capital equals. O a. Current Assets minus Current…

A: Working capital is the amount required to run day to day business operation. It is also known as…

Q: Assume that a company has provided the following information regarding a capital investment…

A: Present value of a future amount With discount rate (r), period (n) and future amount (F), the…

Q: 4.A corporation is considering purchasing a machine that will save $210,000 per year before taxes.…

A: Net present value is the sum of all present values of cash inflows minus present value of cash…

Q: How much money is invested at each rate?

A: Investment: It represents an asset that is acquired for the purpose of income generation or price…

Q: A non paying dividend stock is priced at 50. Call option delta is 0.5. Stock volatility is 0.29. By…

A: Here, Spot Price is 50 Strike Price is 55 Call Option Delta is 0.5 Stock Volatility is 0.29

Q: In Shiller’s terminology, what are ex post stock prices?

A: The intrinsic value of the stock could be higher or lower. The stock investor's purpose is to find…

Q: 2. A loan is being repaid with 20 annual payments of P1,000 at the end of each year. Atter the tenth…

A: Here, Annual Payment is P1,000 Number of Payments is 20 Semi Annual Payments after 10 payments is X…

Q: FINANCIAL STATEMENT ANALYSIS AND RATIO ANALYSIS The following are the balance sheet and income…

A: Treasury ratios are created using financial statement figures to provide meaningful information…

Q: Based on the information provided below, estimate the total profit or loss on a position: 1.…

A: The futures contract: A futures contract allows a buyer or a seller to purchase the underlying asset…

Q: trofitted space-heating system is being considered for a small office building. The system can be…

A: Present worth method is to determine the present value of all cost and benefits from the project.…

Q: AIX Investment Group considers two alternative portfolios. The risk and return characteristics of…

A: A risk adjusted return is the profit earned in an investment after taking the risk associated to it…

Q: The EPA proposes to cap emissions of ground-level ozone promoting emissions in both Illinois and…

A: Marginal abatement cost is the cost that the concerned institution needs to incur to reduce an…

Q: what is the present worth (PW) for the following cash flow?. Use (i=6%) Annual payment= $100 per…

A: Present worth of a future amount can be calculated as: = Future amount * Present Value Factor (i%, n…

Q: After graduation, you just got hired by an engineering company and you were planning to take a loan…

A: This question can be solved in light of annuity and present value. As the loan is repaid in equal…

Q: A loan is being repaid with 20 payments of 1500 at the end of each year. Interest is calculated at…

A: In the question above. With prospective method we will discount all the outstanding payments due on…

Q: 4. When her granddaughter was born, Melay invested P 20 000 at 12% compounded quarterly. How much…

A: PV = Present value = P20,000 FV = Future value = ? r = Rate of interest = 12% = 0.12 n =Number of…

Q: 3. Maricel borrows P 10 000 with interest at 15% compounded monthly. How much should she pay at the…

A: To calculate the due amount we will use future value formula as follows:   Due amount =…

Q: In how many years will it take P18,000 accumulate t P20,000 when deposited in a savings account that…

A: Answer -  Compound interest formula -  A = P (1+ r/n)nt Given, A = 20000 P = 18000 r = 0.25%…

Q: Income Statement: A small food stall owned by Ms. Lopez is located at San Fernando Pampanga. She…

A: It is given that: Sales in 2018- 285000 – increase by 10% Cost of goods sold – 10% of projected…

Q: Q.1.3     Banks are promoting online banking to their customers. Based on the statement above and…

A: Q.1.3. A customer can make financial transactions via the Internet by using online banking. Online…

Q: Our company, Mom and Pop Inc is at the the end of the fiscal year. We observe that in the market our…

A: Dividend Growth Model: It is  valuation model,  where  fair worth of stock is determined , assuming…

Q: Based on the following information, estimate the justified leading P/E ratio    Return on Equity:…

A: Given, The EPS is $6.20 Return on equity (r) is 18% Growth rate (g) is 6.09%

Q: Financial markets are important because A. It gives investors equal footing with debtors B. Capital…

A: The answer is option A. Financial markets are important because it gives investors equal footing…

Q: As you can see in the graph below, two alternatives of A and B are compared to each other. What do…

A: Analysis of Graph: At x%, PWA and PWB intersects. At y%, PWA touches the axis      Cross over…

Q: You borrow $11,331 and repay the loan with 5 equal annual payments. The first payment is supposed to…

A: The loans are paid by the equal periodic payment and these payments carry the payment of principal…

Q: ctly negatively correlated risky securities A and B. A has an expected rate of return of 12% and a…

A: A minimal variance portfolio is a strategy for maximising returns while minimising risk.It entails…

Q: You are considering buying a Call Option on XYZ Company stock. XYZ Company stock is currently at $75…

A: Let S denote share price, P Payoff, u up-factor and d down-factor Share price after one year: S_u =…

Q: Larry wants to make a decision on a six- year amortized loan for him to buy a new car. The value of…

A: It will be enough if the present value of monthly payment of $700 is equal to or more than the car…

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.