PIX company is considering licensing a water treatment system. The company can purchase a one-year option for P150,000 that will give it time to pilot test the process or the company can acquire the license now at a cost of P1.8M plus 25% of sales. If the company waits 1 year, the cost will increase to P1.9M plus 30% of sales. If PIx projects the sales to be P1M per year over the five-year license period. Determine the: PWnow and PWone-year. MARR is 15% per year

Q: Map & describe the bond market in Kenya

A: Bond markets are also known as the debt market or fixed income securities market or credit market an...

Q: BC is expected to pay ¢500 dividend per share next year, and then sell for ¢2,000 thereafter. our di...

A: Next dividend (D1) = ¢500 Price after one year (P1) = ¢2,000 Discount rate (r) = 28%

Q: What mean finance

A: Finance is a broad term that can mean management of large amounts of money in a general sense.

Q: Identify the term being referred to: A theory that states that how high or low an entity pays out d...

A: Solution:- There are two theories related to dividend-  Dividend relevance theory and dividend irrel...

Q: A new airconditioning unit costs P150,000 and will have a salvage value of P15,000 after 5 years. El...

A: First cost (F) = P 150000 Let A = Annual saving Salvage value (S) = P 15000 n = 5 years r = 15%

Q: (Measuring growth) Given that a firm's return on equity is 22 percent and management plans to retain...

A: Return on equity = 22% Retention ratio = 35%

Q: You invest $1,500 into a "hot stock" through the Robin Hood app. The stock does well in the first qu...

A: We can find the money-weighted return by taking the investment made in the stock $1500 and $1000 and...

Q: El Capitan Foods has a capital structure of 40% debt and 60% equity, its tax rate is 35%,  and its b...

A: Unlevered beta can be calculated by using this equation Unlevered beta =Levered beta1+(1-tax)*debteq...

Q: A proposal to reduce oil spill on MX5 has a B-C ratio of 1.5. The conventional annual worth of benef...

A: Annual benefit (X) = P 560000 Annual disbenefit (Y) = P 100000 r = 6% n = 20 years Let F = First cos...

Q: Which of the following is negative affects the currency exchange rate bid/ask spread? A. order costs...

A: The difference arising between the prices quoted by seller and price offered by potential buyer is c...

Q: Suppose a borrower with two mortgages deffaults. At the time of the default, the first lien has a ba...

A: Given, balance of first lien is $200,000. Balance of second lien is $50,000. Property taxes is $5000...

Q: How much must be deposited today into the following account in order to have a $135,000 college fund...

A: Present value = Future value/(1 + r)n   Future value = 135,000 Quarterly interest rate (r) = 3.16%/4...

Q: Explain the best way for a finance manager to establish good relationship with the managers from oth...

A: Financial managers oversee the finances of large enterprises, government organizations, and everythi...

Q: 4. Vanessa invested k US dollars (USD) in an account that pays a nominal annual interest rate of 2.9...

A: Compounding is a method of charging interest in which Interest is charged on the amount including or...

Q: Assess the following statements: I. The traditional liquidity premium theory states that long term i...

A: we will analyze the above Stamets then we check the accuracy of whether each of the statements is co...

Q: Problem 11-08 Two stocks each currently pay a dividend of $2.20 per share. It is anticipated that b...

A:

Q: a new restaurant. The initial cost ( investment) is 750 000 TL. The forecasted cash flows that you...

A: Net present value is the difference between the current worth of cash inflows and withdrawals over a...

Q: You are considering either leasing or purchasing a car. You notice an ad that says you can lease the...

A: Lease is a contract between two parties in which one party gives right to use of asset to another pa...

Q: WHAT IS THE PURPOSE OF FINANCIAL STATEMENT?

A: Financial statement - are prepared by the management  of a company to convey the performance of the ...

Q: You have already $5,000 in your savings account today. You want to have $50,000 in your savings acco...

A: Data given: FV= $50,000 n= 10 years i= 5% p.a. Amount in savings account = $ 5000   Required: Amount...

Q: What is the expected return for the following portfolio? (State your answer in percent with two deci...

A: Solution:- Expected return for the portfolio (in percentage) = Summation of (Weight of Asset x Retur...

Q: For a 20-year geometric cash flow progression increasing at 2% per year, the first-year amount is P1...

A: The future worth of the single of a single cash flow is calculated by the following formula. Here, ...

Q: What is the par yield on the gov bond you’re following? How has it changed since you’ve been followi...

A: Bond Valuation is a method or a procedure or a technique for the valuation of bond which helps in th...

Q: Beginning Balances for Quentin's Four Credit Cards Card A Card B Card C Card D Balance $4,134.00 $2,...

A: Loan is a value which is borrowed from external sources like banks for a specific period. This amoun...

Q: Let's say that the data shows how the spread between the interest rates on corporate bonds and U.S. ...

A: The investment grade bond market, which normally functions well, did not function as well during the...

Q: The work finance is defined as, except:   a. The money management and the process of acquiring neede...

A: We know, the finance manager has the following functions:- I) Financing Decision II) Investing Decis...

Q: a loan, secured by a collateral, that the borrower is obliged to pay at specific terms. O Loan Busin...

A: A loan is referred as the funds through which one or more company, individual, or some other entity ...

Q: A Corporation issued preferred stocks for P120 per share. The issue price is P20 more than the stock...

A: Stock price (P) = P120 Annual dividend (D) = P12 Underwriting cost (UC) = P10 Tax rate = 30%  

Q: What do you think the consequences might be in financial markets if individuals consumed more of the...

A: Since you have asked multiple questions, we will solve the first question for you. If you want any s...

Q: ) Suppose that today's one-year interest rate is 5%. Consider the following one-year interest rates ...

A: Expectations theory Expectation theory is also referred to as unbiased expectations theory which sta...

Q: Why aren't more resources committed to proper financial system prudential oversight to curb excessiv...

A: Risk management is the most crucial tool to run a business smoothly, effectively and efficiently. Th...

Q: dentify the term being referred to: A type of bond that is secured by the issuing entity’s equipme

A: Bonds are debt instruments and there are many types of bonds in the world of finance. 

Q: A forward rate is a borrowing/lending rate for a loan to be made at some future date.   Select one...

A:

Q: Given four proposals for funding a new project with a 100M limit on capital funding and the MARR is ...

A: Internal rate of return is the rate at which net benefits of the project are equal to its net cost. ...

Q: Q3. John Deere expects the cost of a tractor part to increase by $15 per year (through year 10) begi...

A: Data given: Cost of tractor part in year 1-4 = $80 Increase in cost per year from 5 years from now =...

Q: 3. Two different insurance agents present you two health insurance policies as follows. AIA: It cove...

A: Better insurance policy is one that provides you the maximum coverage. Reimbursement rate or insuran...

Q: ment is FALSE regarding the difference between shareholders and bondholders? * Bondholders ar...

A: Step 1 A shareholder is the company's owner, but a bondholder is the company's creditor, to whom the...

Q: E? Future value of annuity are also applicable for future payments which have different amounts...

A: Step 1 The total amount of regular payments on a future date, taking into account a specific refund ...

Q: Given the problem: Conduits made of Timber                                                     Fir...

A: First cost (F) = $50025.34 n = 13 years Scrap value (S) = $2992 Annual cost (A) = $1301 r = 8.6%

Q: LYD Corp. receives an order from a new customer, amounting $55,000. LYD Corp. uses 45-day credit ter...

A: In order to make decision on feasibility of a customer order, we are required to calculate the net b...

Q: If the YTM on a bond is 11.1 %, what will be the periodic rate assuming the bond is paying coupons s...

A: Yield to maturity refers to the internal rate of return which is earned by the investor who makes th...

Q: Crystal wants the latest limited edition of Vogue magazine, but she needs to buy What will she most ...

A: The question is based on the concept of wants and needs. Needs are things that you absolutely must h...

Q: Kirk Van Houten, who has been married for 22 years, would like to buy his wife an expensive diamond ...

A: The amount Kirk has today is the present value = $4,650 The amount of ring cost in 8 years is the fu...

Q: Consider a 16-year, $1,000 par value, 4% annual-pay bond that is currently trading at a flat price o...

A: Here, Current flat price = $870.07 Face value = $1,000 Time in years = 16 years Interest rate = 4% T...

Q: Why is treasury considered a profit centre. What are the revenues and expense

A: In finance profit center refers to that branch or division that adds, in a direct manner, to an enti...

Q: Given that nominal rate of interest i(m) = 0.1488144 and nominal rate of discount d(m) = 0.1417814, ...

A: imm-dmm=im×dmm2

Q: Five years ago you purchasedan 8% coupon bond for $975. Today you sold the bond for $1,000. What is ...

A: a. Calculate the rate of return as follows: rate of return=Sale price of bond+Coupon paymentsPurchas...

Q: 7) Consider a 10-year 10% annual coupon bond with par value of $1,000 and a yield to maturity of 9%....

A: Modified duration (D) = 8.75 Convexity (C) = 64.80 Change in YTM (∆y) = 10.50% - 9% = 1.50% = 0.015

Q: A binding contract is created when a contractor submits a bid for a project O True O False

A: A binding contract is a contract where the parties to the contract are legally enforceable and the p...

Q: Suzette invested $934.00 in a 95-day term deposit at 7.19% p.a. Using the future value formula, S= P...

A: Invested amount (P) = $934 Period (t) = 95 days = 95/365 = 0.26027397260274 Years Interest rate (r) ...

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.