Explain what the companies should do with their profits, conditional to the availability or absence of highly profitable investment opportunities.
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Q: What is the systematic risk for a portfolio with two-thirds of the funds invested in X and one-third…
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Q: The Seattle Corporation has been presented with an investment yield end of year cash flows of…
A: NPV is calculated as sum of present value of cash inflows less initial investment
Q: Compute the interest paid on a 4-year lease for a $25,894 car if the annual rate of depreciation is…
A: Present Value of lease is $25,894 Time period is 4 years Annual interest rate is 3% To Find:…
Q: Anna is buying a house seling for $265.000. To oblain the morigage Anna la required to make a 10%…
A: 1) Down-payment = House Price * 10% = 265,000 * 10% = 26,500 2) Mortgage Loan = House Price -…
Q: e the Hoskold's Formula to compute the price if the money is worth 8% on sinking fund and the yield…
A: Given A= 5,400,000 n=7 i=5% i'=8%
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A: Solution:- When an equal amount is paid each period at beginning of each period, it is called…
Q: You buy a 6 year bond with an annual 5% coupon at par value, $1000. If the yield to maturity at the…
A: Solution: Bond value is the present value of the cash inflows receivable from the bond for the…
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A: Cost of equity is referred as the return, where the corporation that requires regarding the project…
Q: duration of this bond?
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A: Future Value: It represents the future worth of the present amount and is estimated by the product…
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A: Real MARR is 3% Inflation rate is 5% To Find: Discounted payback period
Q: The price of a condominium is $88,000. The bank requires a 5% down payment and one point at the time…
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Q: The unpaid balance at the start of a 30-day billing cycle was $660.63. No purchases were made during…
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Q: Consider a bond with 15 years to maturity, a coupon rate of 13% that is paid annually, a face value…
A: Face value = $1000 Coupon rate = 13% Coupon amount = 1000*0.13 = $130 Yield to maturity = 15% Years…
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Q: Compare and contrast the unit trusts and the exchange traded funds.
A: Given, We are required to explain the comparison between unit trusts and (ETF's).
Q: Given the following information, what is the financial break-even point? Initial investment =…
A: The financial break-even point is the level of earnings where earnings per share are zero. In other…
Q: In a perfect world where asset return is normally distributed. We have risk and return…
A: The expected return on a portfolio is the weighted average of the expected return s of the…
Q: The asset's market risk premium is
A: Market risk premium = Return on market portfolio - Risk free rate of return
Q: new engine was installed by a textile plant at cost of P and projected to have a useful life of 15…
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Q: The following information is available on two mutually exclusive projects. Project…
A: Project A; Cash flow; Year 0 = - $700 Year 1 = $200 Year 2 = $300 Year 3 = $400 Year 4 = $500…
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A:
Q: What factors affect accounts payable turnover ratio?
A: Accounts Payable ratio is calculated by dividing total supplier purchases by the average accounts…
Q: Suppose we need to make 10 end-of-year payments of $5, 000 to pay off a loan. Assuming the rate of…
A: Interest rate = 5% Loan amount = $5,000 Time period = 10 years
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A: The Excel Formula sheet of above table is
Q: Morty is looking into buying an apartment. He checked out a few places recently, and it looks like…
A: The answer is Yes. Morty is ready to buy that apartment.
4a) Explain what the companies should do with their profits, conditional to the availability or absence of highly profitable investment opportunities.
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Solved in 2 steps
- Does the successful investment decision increase a company's market value?Is it feasible for a new company endeavor to be lucrative while also experiencing financial difficulties?ASAP What is more important for a firm–profit maximization or value maximization? What issues orconflict of interest can come up between owners and managers and how can they be solved?
- Which of the following is not a determinant of investment? a) The efficiency of capital equipment b) The level of consumer demand c) Interest rates d) The willingness of investors to buy new share issuesIf a company is looking for an investment opportunity, they should be able to demonstrate how they would go about doing so.Is it realistic to believe that an optimal capital structure exists or might be achieved by a company?
- What are two crucial presuppositions we make when we choose to use the present cost of capital of a firm to evaluate the profitability of projects in which we invest? Be thorough.To measure the financial viability of a proposed business, which is the more powerful measure- profitability, liquidity, solvency or payback period? Support your answer with clear examples.Which of the following considers both time value and risk factor of the business concern? a. Sales Maximization b. Asset Maximization c. Profit Maximization d. Wealth Maximization
- How does the percentage of ownership a company has in an investment effect them? Would the percentage of ownership be a big factor in your decision whether or not to invest in a company? Please explain.46.When the economic method is used, the investor will recognize the investment income when: Select one: a. the company in which it invested reports income and the increase in the fair value of the investment. b. Receive dividends from the company you invested in. c. the company that invested reported income. d. the fair value of the investment has increased.How does the % of ownership a company has in an investment effect them? Would the % of ownership be a big factor in your decision whether or not to invest in a company? Please explain.
