Present value is based on the concept of:   a. discounting.   b. duration.   c. systematic risk.   d. compounding.

Q: Jimmy has $212,810 accumulated in a 401K plan. The fund is earning a low, but safe, 3% per year. The...

A: Given, amount accumulated $212,810. Rate is 3% per year withdrawals are $23,000 each year

Q: A contract requiring a specified future monetary payment at a specified future point in time in exch...

A: A derivative is a complicated financial security that is agreed upon by two or more parties. Traders...

Q: Why do floating charge holders frequently include a negative pledge clause in the charge.

A: Negative pledge ensures that, in case of insolvency of a firm, other creditors wont be able to obtai...

Q: Sungsam Electronics has to choose between two investment options Each alternative involves an initia...

A: Initial Investment = 100,000 Cash Flows: Year Cash Flow - A Cash Flow - B 0 -100,000 -100,000 ...

Q: Perform profitability analysis for the two quotas

A: Profitability analysis is a type of analysis or a financial ratio which helps in assessing the profi...

Q: Suppose you invest $25500 for 12 years paying 2.25% annual interest. How much will you have at the e...

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

Q: Modern Artifacts can produce keepsakes that will be sold for $76 each. Non-depreciated fixed costs a...

A: Given, Initial investment $2940 Fixed cost $940 per year Sales price per unit $76 each

Q: If $1200 is due on September 25, 1976, find the present value on June 27, 1976, if the discount rate...

A: Present Value = Future Value / 1 + (r * t)Where r  = 7%t = time = (27 June 1976 to 25 September 1976...

Q: The investor has set aside an amount of Rs 5,00,00 to be equally divided into aggressive and defensi...

A: Trigger point is 20%  

Q: An exchange traded fund (ETF) is a security that represents a portfolio of individual stocks.  Consi...

A: The ETF is trading at $366. The current price of IBM is $121.57. The current price of MRK is $36.59....

Q: Use the following information in the table below to answer the question: Blanc Blanc Financial Year ...

A: The accounting return on equity (ROE) is calculated as net income divided by average shareholder equ...

Q: You are a senior manager at Poeing Aircraft and have been authorized to spend up to K400,000 for pro...

A: Payback Period: It is the capital budgeting tool that helps to estimate the time taken to recover th...

Q: A note dated August 18 and due on March 9 (no leap year) runs for exactly:

A: In the world of finance 'note' refers to a legal document which is represenatation of a loan amount ...

Q: November 2009, Perrigo Co. (PRGO) had a share price of $39.20.  They had 91.33 million shares outsta...

A: market capitalization = Number of shares outstanding × Market price per share

Q: APPLY THE CONCEPTS: Net present value and Present value index Sutherland Engineering is looking to i...

A:

Q: An annuity-immediate has 3 annual payments of $200, followed by a perpetuity of $300 starting in the...

A: The term "perpetuity" refers to an endless stream of financial flows. Money's value depreciates over...

Q: What is the shape of the yield curve given the term structure below? What expectations are investors...

A: Yield Curve: The yield curve plots the different interest rates and maturities of bonds. It acts as ...

Q: Southern Tours is considering acquiring Holiday Vacations. Management believes Holiday Vacations can...

A: maximum Southern Tours should pay today to acquire Holiday Vacations = present value of future cash ...

Q: pes of risk that are relevant in capital budgeting. How is each of these risk ty

A: Step 1   A capital budget is a financial tool for estimating long-term project value. When trying to...

Q: p 11, 2022 110.00 110.60 106.60 106.60 107.41 439,750 p 10, 2022 109.20 110.80 109.20 109.90 109.96 ...

A: Stock prices goes up and down according the demand in the market and from the given data we can dete...

Q: Assume that the government sets a binding price ceiling on the interest rate that banks charge on lo...

A: A price ceiling is a mandate that the price charged on certain goods or products may not rise or fal...

Q: e of the investment, knowing that inflation is 3% cumulative annually and that the required profitab...

A: The internal rate of return (IRR) is a financial metric for determining the profitability of potenti...

Q: In November 2009, Perrigo Co. (PRGO) had a share price of $39.20.  They had 91.33 million shares out...

A: Enterprise value is also known as firm value and this is the market value of a company or a business...

Q: A preferred stock will pay a dividend of $1 per year. If the annual return is 7.63%, what is the sto...

A: Stock price today = Annual dividend / Annual return where, Annual dividend = $1 Annual return = 7.63...

Q: 14.) The Virginia Corporation recently issued 10-year bonds at a price of $1,000. These bonds pay $6...

A: The current price of a projected amount of money or series of payments with a predetermined rate of ...

Q: When the annual cash flows are unequal, the payback period is computed by adding the annual cash flo...

A: Year Annual cf Cumulative cf 1 20000 20000 2 30000 50000 3 40000 90000 4 50000 140000 5 60...

Q: 5. David was having a heated argument with Sue that the business should consider more than sharehold...

A: The question is based on the concept of different approaches used in corporate finance for the finan...

Q: EBIT is $12,000 and interest expense is $3,000. If the tax rate is 20%, what is the net income? O $7...

A: EBIT = $12000 Interest expenses = $3000 Tax rate = 20%

Q: A preferred stock will pay a dividend of $1 per quarter. If the annual return is 6.06%, what is the ...

A: Here, Dividend per Quarter is $1 Therefore, Dividend per year will be: =$1*4 =$4 Annual Return is 6....

Q: If your goal is to determine how effective a firm in managing its assets, you would examine O Profit...

A: If the goal is to determine firms effectiveness in managing assets, asset management ratios should b...

Q: You own 100 shares of a "C" Corporation.  The corporation earns $5.00 per share before taxes.  Once ...

A: Number of shares owned = 100 Earning per share before tax = 5 Corporate tax rate = 40% Personal tax ...

Q: using only ANNUITY DUE formulasQuestion: A man bought an equipment costing P60,000 payable in 12 qua...

A: Annuity due formula for calculation of periodic payment when present value is known: Pv= P60,000,  n...

Q: A company is expected to pay a dividend of $6.73 in the following period. If the expected growth rat...

A: D1 = $6.73 Growth rate (g) = 4% r = 11%

Q: What are the portfolio weights for a portfolio that has 110 shares of Stock that sell for $79 per sh...

A: Number of shares of stock A = 110 Shares Price per share stock A = $79 Number of shares of stock B =...

Q: With respect to issues related to the cost of capital: Multiple Choice an increase in the debt ratio...

A: Cost of capital refers to the percentage that shows the proportion of total financed amount includin...

Q: Which of the following statements regarding limited partnerships is true? A) There is no limit on a...

A: Limited liability partnership:- A limited partnership is identical to a general partnership, except ...

Q: b) Herman bought a terrace house at RM650,000. He paid a 10% down payment and the balance was financ...

A: Calculate the present value of the loan taken by multiplying the purchase value which is RM650,000 w...

Q: EBIT is $12,000 and interest expense is $3,000. If the tax rate is 20%, what is the net income? O $4...

A: Income taxes is the amount of taxes which needs to be paid by the individual or business to the gove...

Q: A farm to market road project has a capital investment of Php 500,000 and returns Php 100,000 per ye...

A: Investment = Php 500,000 Annual return = Php 100,000 Period = 4 Years MARR = 12%

Q: The future value of an investment is Php5,500,000 while its present value is Php3,500,000. It has a ...

A: Given: Future Value “FV” = Php5,500,000 Present Value “PV” = Php3,500,000 Number of years = 13 Numbe...

Q: Assume all firms have the same expected dividends. If they have different expected returns, how will...

A: All the firms have same expected dividends but different expected returns.

Q: Remerowski Corporation Inc. asks you to estimate the cost to purchase a new piece of production equi...

A: It is given that :Original Equipment:cost of similar old equipment- $10,000 Capacity- 2000 units cos...

Q: Compute the present value for each of the following bonds: a. Priced at the end of its fifth year, a...

A: A bond is a financial instrument issued by large business organizations and governments to raise deb...

Q: Which of the following would not be classified as a current asset? Prepaid expenses Plant, property ...

A: Current assets are those assets which are already in cash or can be converted into cash into short p...

Q: why is profit maximization supposedly not the most important goal of a company

A: Profit Maximization: The process of raising the profit earning capacity of the business is known as ...

Q: Selected information from the comparative financial statements of AppleVerse Company for the year en...

A: Receivables turnover ratio measures the number of times in a year the company collects its overdues....

Q: how do the upward trend and downward trend of share price(stock price changes) relates to the market...

A: Market Efficiency - A market is efficient when such  market is characterized by perfect and immediat...

Q: Darnell Limited has capital project opportunities each of which would require an initial investment ...

A: Net Present Value is a capital budgeting technique which helps in the evaluation of an investment pr...

Q: When the price of the underlying financial instrument exceeds the exercise [strike] price of a call ...

A: An option is a financial derivative that represents a contract that the option writer sells to the o...

Q: An investment that will give you monthly payments for 14 years costs $146,897. If your required retu...

A: An annuity is a series of cash flows that involve equivalent periodic amounts at equal time interval...