Explain the differences between depreciation expense and impairment loss of property, plant and equipment, discussing the depreciation methods and the indicators of impairment.

Q: The following data are gathered: ·       The real risk-free rate is 1.05% ·       Inflation premium…

A: Risk free rate of the return, which is defined as the theoretical return rate of investment along…

Q: What are the ways in which a bank can increase its capital adequacy ratio?

A: Capital Adequacy Ratio or CAR is referred as the measure through the capital for the bank that are…

Q: Determine the monthly amortization for a 30-year mortgage of P6,000,000 at a 5% interest rate,…

A: This question is an application of annuity. The monthly amortization is the equal monthly instalment…

Q: $600 per year for 10 years at 14%. $   $300 per year for 5 years at 7%. $   $600 per year for 5…

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: lobex Corporation plc shares are currently trading at $5.00 each. Management wishes to  raise…

A: Rights issue is a form of share issue to raise finance for a company. During rights issue, the…

Q: A 5-year long-term corporate bond yields 12%. The real risk-free rate is 2%. Inflation is forecasted…

A: The liquidity premium can be ascertained using the determinants of interest rates. It is calculated…

Q: D. Conaider E CRA)= 20%0 E CR): 30% a port folio of 2 assets A &B where risky =10% 8:20% : 20%. A,B…

A: Solution:- Minimum Variance Portfolio is that portfolio in which the weights of securities are such…

Q: The real risk-free rate of interest, r*, is 3%.  Inflation is expected to be 4% this year, 5 percent…

A: Yield on 10 years bond will be the risk free rate,inflation and maturity risk premium.

Q: The type of the risk that can be eliminated by diversification is called

A: the type of the risk that can be eliminated  by diversification is called

Q: 1) Finance function is limited to supply of funds to the requirements of the organisation. True…

A: Aim of the finance function is a) Raising sufficient funds( Financing Decisions) b) Proper…

Q: An investment opportunity will pay £100 with a 10% probability, £50 with a 40% probability, or will…

A: Expected value can be calculated as follows = Investment return x Probability There is certain…

Q: In identifying alternative courses of action, one should consider the following, except a. continue…

A: The answer is option (d) change the current situation. In identifying an alternative course of…

Q: Assume your goal in life is to retire with one million dollars. How much would you need to save at…

A: To calculate the annual saving amount we will use future value of annuity formula as follows…

Q: The asset has FC of 10 000 000 and is expected to last in 10 years with the salvage of 800 000.…

A: Depreciation as per Sum of years Depreciation  First years  = Sum of digits * ( Cost of asset -…

Q: Discuss carefully the following quotation: “It is reasonable to assume . . . that business can pass…

A: Value added tax is an indirect tax that is levied at each point in which value is added to the…

Q: You have an opportunity to invest $ 102,000 now in return for $79,700 in one yoar and $30,400 in two…

A: To calculate the NPV we will discount the cash inflows and than we will reduce present value of cash…

Q: National Company expects P30,000,00 in earnings next year. Its dividend payout ratio is 40%, and its…

A: Expected earnings = P30,000,000 Dividend payout ratio = 40% Equity to asset ratio = 40%

Q: Suppose Kenya is expecting 8% inflation rate during the next one year as compared to 3% inflation…

A: Kenya: USA:

Q: GsCo.’s stock sells for P35 that recently paid a P5 dividend. The growth rate will remain the same…

A: Flotation cost is the cost to be incurred on issue of new equity shares, net proceeds from the new…

Q: Find the present value of a deferred annuity of ₱6399 every six months for 3 years that is deferred…

A: To calculate the present value of annuity we will use present value of annuity formula, since first…

Q: 1) The financial management decisions can be classified into four basic kinds, Investment Decisions,…

A: The Financial management decision are classified into 3 kinds. 1. Investment Decisions 2 Financing…

Q: Could you explain how you getting the effective interest rate....and any other formula that can be…

A: Effective interest rate is different from the annual percentage rate. This is because effective…

Q: An analyst is studying the movement of the stock ABC. His research and came up with a different…

A: Probability of Economic conditions; Strong (Ps) = 0.30 Normal (Pn) = 0.50 Weak (Pw) = 0.20     Rate…

Q: Mr. Dalisay applied for a bank loan with a principal of P150,000 to be paid after five years in…

A: Principal loan amount = P150,000 Loan period = 5 years Current market rate = 0.10     Principal will…

Q: What is the annuity payment?

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: Under a new company employees savings plan, an employee will pay P 250 at the beginning of each…

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

Q: Please type the answer by computer, so i can see it clearly, thank you!!! Explain the tradeoff…

A: The term "mortgage" refers to a loan used to buy or maintain a home, land, or other type of asset.…

Q: (b) Calculate the effective interest rate paid by Vri.com and Xadine in the following swap. Vri.com:…

A: Interest Swapping- Under this a person who is taking loan at fixed rate wants to changed it into…

Q: Gs Co. has a debt to equity ratio of 25% and a weighted average cost of capital at 25%. The firm…

A: While computing weighted average cost of capital, the after-tax cost of debt is taken. Therefore, in…

Q: Critically discuss whether, in general, mergers and acquisitions are successful in practice.

A: The phrases "mergers" and "acquisitions" are frequently used together, although their meanings…

Q: getting rich. 2. In evaluating alterna

A: Financial planning helps a person in achieving goals of one’s life by selecting the best alternative…

Q: (a) Distinguish between the activities of retail and investment banks and discuss how this has an…

A: An investment is an asset or item purchased for the purpose of generating an increase in income or…

Q: A business sets up a sinking fund so they will have a $46,000.00 to pay for a replacement piece of…

A: A Sinking fund refers to a fund that is kept aside or borrowed for the purpose of paying off a debt…

Q: A project has an initial cost of $50 000, net annual cash inflows of $20 000, and a $2 000 salvage…

A: Rate of return is the return on the profit on investment, It can change the value of investment,…

Q: Determine the PW (Present Worth) at 7% and at 8% of the given cash-flow diagram. Use MS Excel

A: Present worth using 7%        Present worth using 8%

Q: A firm has an net operating profit of P300,000, interest of P35,000, and a tax rate of 25%. The firm…

A: Earnings before interest and taxes: Earnings before interest, depreciation and taxes are the…

Q: Speculating with Currency Call Options. ABC Inc.,  purchased 75,000 units call option on British…

A: An option is a financial derivative that gives the buyer the right to buy or sell the underlying…

Q: up to $700 monthly in order to repay the loan. Determine if it is enough for him to agree on this…

A: Loan payment: These represent periodic payments made by the borrower to the lender for the purpose…

Q: Find the IRR of the project.

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: You read in The Wall Street Journal that 60-day T-bills are currently yielding 9.5%.  Your…

A: As there is no probability of loss in these type of risk free rate thus it is free from any kind of…

Q: As soon as Erika graduated from college and got her first fulltime job, she decided she would start…

A: Monthly deposit (m) = $400 Monthly deposit period (p) = 120 (i.e. 10 years * 12) Monthly interest…

Q: What was the total percentage return on this investment? Answer as a percentage (e.g. 0.01 is 1.0%)…

A: Total return refers to a method which shows the relationship between the total return and current…

Q: (a) Discuss the two opposite views towards regulating financial markets/institutions. (b) Discuss…

A: Commercial banks, investment banks, insurance companies, and brokerage firms are the most frequent…

Q: Speculating with Currency Call Options. ABC Inc.,  purchased 75,000 units call option on British…

A: Value at time 0 of call option = $0.021 Strike price = $0.78 Exercised price = $0.86 Number of units…

Q: Use the following information for the next three questions. Instrument Corp. has the following…

A: Available for sale security (Non-Trading Investment): It is a  a debt or equity instrument which  is…

Q: u observe the following information regarding Company ABC and Company XYZ: ·     Company ABC has a…

A: The standard deviation show risk related to the company and beta show the risk related to the…

Q: b. Financial Management means planning, organizing, directing and controlling the financial…

A: Risk management refers to the process of identifying, analysing, and accepting or mitigating risk in…

Q: Pedro buys a condo for $629,000, with a down payment of $40,000. He takes out a 30-year mortgage for…

A: Loan amount (P) = $589,000 Monthly interest rate (r) = 0.0025 (i.e. 0.03 / 12) Monthly period of…

Q: the correct answer. 1. Which of the following is not among the risks that need to be evaluated in…

A: There are many types of risk involved in life that need to be covered by financial planning and risk…

Q: firm has zero debt in its capital structure.  Its overall cost of capital is 10%.  The firm is…

A: Weighted average cost of capital = (weight of Debt * Cost of debt) + (weight of Equity * Cost of…