company 1 sells a product for $24.30 with trade discount rates of 7% and 3%. company 2 sells the same product for $22.30 with two trade discount rates of 7% and 5%. a. Which company is offering it for a cheaper price? The company 1 The company 2 b. What further trade discount rate must the company with the higher price provide to match the lower price?
Q: Question A Calculate the nominal interest rate per annum convertible every 4 months that is…
A: To calculate the nominal interest rate per annum convertible every 4 months that is equivalent to a…
Q: onsulting company Clark Robinson and Morton CRM is in that never ending budgeting phase of the year.…
A: IRR is an internal rate of return and is the financial break even point where the present value of…
Q: You have the following financial market information. You also have 1.34 million Australian dollar…
A: Arbitrage are short term opportunities that exist in the market due to missed pricing in the market…
Q: LMN Corporation, a real estate company, is planning to pay a dividend of $0.80 per share. Most of…
A: Dividend = $0.80 per share Income tax, Tc = 40.00% Capital gain tax, Td = 27.00% Exemption, E =…
Q: Miguel deposits 5000 into an investment today that earns 5.2% compounded annually and maturing in 3…
A: Miguel Deposit value = $5,000Interest rate = 5.2% compounded annuallyNo of years = 3 yearsAnderson…
Q: You plan to save money for a down payment of $37,000 to purchase an apartment. You can only afford…
A: Future value is an estimate of future cash flows that may be received at a future date, discounted…
Q: H5. A cmpany's tax rate is 40%, its beta is 1.20, and it uses no debt. However, the CFO is…
A: According to Capital asset pricing model ke = Rf + ( beta * market risk premium )whereke = cost of…
Q: Given the following information of the mortgage pool that backs a MPT, what is the regular scheduled…
A: The pool of mortgages that make up mortgage-backed security (MBS) when the securities were issued,…
Q: 1 2 3 4 5 6 7 8 9 10 11 12 13 A B Purchase price Down payment Trade in Amount financed Monthly…
A: Mortgage payment is done at a fixed interest rate for a fixed duration of time. Normally, the…
Q: Question 3 You are considering the following three mutually exclusive projects. The required rate of…
A: Internal rate of return is a method of capital budgeting used to determine the profitability of…
Q: ive typing answer with explanation and conclusion Fama's Llamas has a weighted average cost of…
A: Weighted average cost of capital is total cost of financing the capital of the company. It includes…
Q: Assume a security follows a geometric Brownian motion with volatility parameter = 0.2. Assume the…
A: An option is a financial derivative that provides the holder the right, but not the obligation, to…
Q: A borrower wishes to borrow $989,000 today using a partially amortizing 30 year loan. Specifically,…
A: To solve the question, first we need to use the formula for present value of annuity. Then, we will…
Q: You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of…
A: A company's average after-tax cost of capital from all sources, including common stock, preferred…
Q: Your supervisor has asked you to do the following calculations: (a) A bank bill with 120 days to…
A: The Bank Bills are issued for a specified sum, a specified period, and a stated interest rate. The…
Q: The market price of a European call is R3.00 and its price given by Black-Scholes- Merton model with…
A: Market Price of European call = R 3.00Black-Scholes Merton model call option price = R…
Q: 11.2 The Wellington Construction Company is considering acquiring a new earthmover. The mover's…
A: NPV is also known as Net present Value. It is a capital budgeting techniques which help in decision…
Q: The price of $100 par-value T-bond maturing in 15 years and paying a 7% coupon is 130. The bonds…
A: Underlying Asset: In the case of a Treasury bond futures contract, the underlying asset is the…
Q: Which of the following regarding the S&P 500 inclusion anomaly is FALSE? Group of answer choices a)…
A: S&P 500 (Standard & Poor's 500) is a stock market index that measures the performance of 500…
Q: You are considering a project which requires $185,000 in external financing. The flotation cost of…
A: Required External Financing = $185,000Cost of Equity = 6.5%Cost of Debt = 2.8%Debt-Equity ratio =…
Q: 6.4 Purchase a Home 1. Tammy and JD are buying a $465,000 home. They have been approved for a 6.25%…
A: Home value = $465,000Mortgage period = 30 yearsDown payment = 30% = 465000 * 0.3 = $139,500Loan…
Q: The target capital structure of Company A, Inc. consists of 35% debt and 65% equity. Company A is…
A: The cost of debt refers to the interest that the company provides to its debt holder for their…
Q: ind the future value of an annuity due with an annual payment of $13,000 for three years at 4%…
A: Annuity means periodic payments and when periodic payments are at beginning of the period, the…
Q: e following is a four-year forecast for Torino Marine. Year Free cash flow ($ millions) Estimate the…
A: Fair value is the value that can be obtained from the free cash flow and based on the cost of…
Q: The current price of silver is $30 per ounce. The storage costs are $0.48 per ounce per y payable…
A: The future price can be calculated by using this equationFuture price =(Currant price+ PV of storage…
Q: Firm commitment versus best efforts. Astro Investment Bank offers Lunar Vacations the follow nitial…
A: When any company goes public to raise money than there is a need for an intermediary for that and…
Q: Below is a list of prices for $1,000-par zero-coupon Treasury securities of various maturities. An…
A: Maturity (Periods) = 3 The price of the coupon bond is
Q: The finding that trading on analysts stock recommendations generates an abnormal return (alpha) is:…
A: In financial markets, the idea that prices incorporate and reflect all available information is…
Q: A portfolio has a total return of 4.5%, a standard deviation of 40%, and a beta of 0.5. The market…
A: Market return, Rm = 12%Standard deviation of market return = 20% Market's treynor measure = 0.10 We…
Q: Billy Bob's Crab & Oyster Shack wants to reduce the cost of labour by replacing some labour with…
A: Annual Cashflow = Annual Savings * (1-Tax rate)Terminal Cashflow = Salvage Value after tax + Net…
Q: s of age and is a member of a specified pension plan (SPP). She is planning for an active retirement…
A: Retirement is the period after the completion of a job period when there is no other source of…
Q: 3. The Sandy Shores Cooperative is owned by the shareholders. The co-op has a total of 58,000…
A: Ownership Percentage=(Number of shares owned by Linda/Total number of shares)×100%Given:Number of…
Q: Sam wants to donate $1,000,000 to establish a fund to provide an annual scholarship in perpetuity.…
A: Here, Donation Amount $ 1,000,000.00Interest Rate3.81%Time Period of ScholarshipPerptuityTime…
Q: Use the put-call parity to show that a European call option on a currency has the same value as the…
A: Put-call parity is a fundamental principle in option pricing that relates the prices of call and put…
Q: Assume now that in our usual setting the stock has continuous dividends. If the interest rate is r =…
A: Delta is a crucial risk measure that quantifies the sensitivity of an option's price to changes in…
Q: Question A Suppose the annualized LIBOR3 is 4.23% and the annualized LIBOR6 is 5.97%. What is the…
A: As per the given information:The forward rate for a LIBOR3 (annualized) deposit is to be placed…
Q: Suppose the return of asset A to D, is given as follows: Asset 2018 2019 2020 2021 A 9% 10% -2 % 15%…
A: In the given case, we have provided the return of asset A to D and the number of years. The expected…
Q: An asset in the market is priced at 12,750 with an annual effective yield rate of 4.5%. The modified…
A: Asset price = 12,750Yield rate = 4.50%Decrease in yield rate = 200 basis or 2%Revised price due to…
Q: The monthly effective rate of discount is 0.7% . Calculate the force of interest per annum which is…
A: For a monthly rate, to find the annual force of interest, we compound the monthly force of interest…
Q: 6-month forward rate = €1.20/£ Euro-zone interest rate = 3% p.a. U.K. interest rate = 2% p.a. What…
A: Based on the interest rate parity the spot rate and forward rate should be in equilibrium with each…
Q: Wong Ltd issued a 15 year coupon bond 2 years ago. It carries a coupon of 8% with a face value of $…
A: Bond price is the sum of the present value of coupon payment and the present value of par value of…
Q: Mean-variance expected utility is given by Eu = e-, where e is expected return, v is the variance of…
A: Mean-variance expected utility is a concept in finance that combines an investor's preferences for…
Q: Regular investments made at the beginning of each months earn is 5.25% compounded weekly. How many…
A: Future value is an estimate of future cash flows that may be received at a future date, discounted…
Q: Travelex Australia provides the following three exchange rates. You assume that there is a…
A: Here, Bid RateAsk RateValue of Chinese Yuan (CNY) in Australian Dollar (AUD)0.20460.2243Value of…
Q: Mark has an amortization and he is required to do semi-annual payments for 15 years. If the present…
A: Loan Amount =10,000,000 pesosInterest rate per year =17%Number of years=15We need to find the…
Q: Calculate the missing values. Express dollar values rounded to two decimal places and break-even…
A: The break-even volume represents the volume of sales required for the firm to cover its total…
Q: Assuming no arbitrage opportunities exist, the risk premium on the factor portfolios F1 and F2…
A: Using simultaneous equations, we can solve for this question. The logic is as below:Using the…
Q: A company enters into a short position in futures contract to sell 5,000 bushels of wheat for $3.50…
A: In future markets, these contracts are settled later on the specified dates but margins are required…
Q: Given that the annual force of interest is 5.1% during the first 6 years and 5.2% thereafter, find…
A: To calculate the present value of a continuous payment stream at a constant annual rate, use the…
Q: Michael Prendergast is considering purchasing a Kite bond with semiannual payments having an annual…
A: Yield to maturity is the rate of return realized on the bond when bond is held till maturity of bond…
Step by step
Solved in 3 steps with 1 images
- If goods are shipped FOB destination, which of the following is true? A. Title to the goods will transfer as soon as the goods are shipped. B. FOB indicates that a price reduction has been applied to the order. C. The seller must pay the shipping. D. The seller and the buyer will each pay 50% of the cost.ABC company offers an item for RM 300 less 20% whilst XYZ company offers the same item for RM 320 less 40%. Find i. the net prices of the item offered by the two shops. ii. the further discount percentage that must be offered by the shop that sells at a higher net price in order to meet the competitor’s price.buying and sellingABC Company offers to fill an order for goods at P 25,800.00 less 25% and 25 %, terms n/30. On the other hand, XYZ Corporation offers P 25,000.00 less 35%, 3%, and 2%, terms 8/10, n/30: on the same order. Assuming that Mr Cruz will pay cash, which is the better offer?
- # You can buy a product from one of three companies. Company A for $3,200 with a trade discount of 30%, Company B for $2,900 with a trade discount of 20% and 10%, or Company C for $3,450 with a trade discount of 20%, 15%, 5%. Which company has the lowest net price?2. A seller sells his product on 14% profit of the market price. If the selling price is₱3,420 then find the market price.One Corporation has two potentialsuppliers. Both are supplying the items atsimilar list prices and trade,discounts.However, Supplier A.offered a credit term of2/10, n/30 and the.other offered a term of3/10, n/40. Which of the following statementsis true? a. Alpha should choose Supplier A and pay on the 10th day.b. Alpha should choose Supplier B and pay on the 10th day.c. Alpha can choose either supplier and always pay on the 10th day.d. If Alpha chose Supplier B, the former should pay on the 30th day so that it can maximize the trade discount
- buying and sellinga. A calculator is listed at P 859.50 and has a trade discount of 33 1/3 %; a) What is the amount of trade discount? b) What is the price paid for the calculator?b. ABC Company offers to fill an order for goods at P 25,800.00 less 25% and 25 %, terms n/30. On the other hand, XYZ Corporation offers P 25,000.00 less 35%, 3%, and 2%, terms 8/10, n/30: on the same order. Assuming that Mr Cruz will pay cash, which is the better offer?c. What is the total cash discount if an invoice dated March 31 for P 15,000 with a payment terms of 3/20; 1/30; n/60 is paid in full on April 20?d. A manufacturer bills a retailer P 25,000 for a brand new refrigerator, and further extends a trade discount of 18 %. What is the trade discount and the net price?e. The list price of a brand new flat screen tv set at Emcor is P 25,000. The item costs P 22,000. After negotiation the tv set was sold at 20,000. What are the initial markup price and the maintained markup price?a. What is the net price factor of a 25/19 series of trade discounts? net price______ b. A catering company buys some items with a list price of $5,000. If the supplier extends trade discount rates of 35/30/5, find the net price using the net price factor, complement method. $______ c. Find the trade discount amount for an order of merchandise with a list price of $29,000 less trade discounts of 30/25/10. trade discount amount________Equate Inc. sells products with a cost of $25,000 during the year to customer for $55,000. It is Equate’s policy to accept returns up to 60 days after the date of purchase. Equate estimates that there is a 60% probability that returns will be 3% of sales and a 40% probability that returns will be 2.5% of sales. What is the transaction price under a) expected value method b) most likely amount method? Choices: A: $53,460 B: $53,350 A: $53,350 B: $53,460 A: $53,460 B: $54,450 A: $54,450 B: $53,460 A: $53,350 B: $53,350
- Purchase-Related Transactions A retailer is considering the purchase of 1,000 units of a specific item from either of two suppliers. Their offers are as follows: Supplier One: $34.80 a unit, 1/10, n/30, no charge for freight.Supplier Two: $35.00 a unit, 2/10, n/30, plus freight of $200. PRICE OF SUPPLIER ONE: $ PRICE OF SUPPLIER TWO $ Which of the two offers, Supplier One or Supplier Two, yields the lower price?Assume that a merchandiser purchases a product from a supplier for $3.00 per unit and then sells it to customers for $5.00 per unit. Ordinarily, the company sell 30,000 units per year; however, it is considering lowering its price to $4.50 per unit. At the lower price, the company expects to sell 49,250 units per year. What total contribution margin will the company earn if it sells 49,250 units at a price of $4.50 per unit? Multiple Choice $69,400 $73,875 $64,025 $83,725What is the transaction price for the following scenario: Scenario A: Tula Inc. sells $20,000 of inventory for $45,000 during the year. Tula estimates returns to be 4% of sales. Scenario B: Universe enters into a contract with a new customer for $12,000. As part of this agreement, Universe agrees to pay $4,000 to the customer to compensate the customer for up-front processing costs. A: $43,200 B: $8,000 A: $43,200 B: $12,000 A: $45,000 B: $8,000 A: $45,000 B: $12,000 None of the above