Scenario D: Six months later your credit card is carrying a balance of $500. You decide that you want a new TV from Target for $350 and also charge that to your credit card. Since you continuously carried a balance, your credit card company upped your APR from 19.5% to 21%. Assume you do not charge anything extra to your card. 16. What is your starting balance? 17. What is the minimum payment you must make?

Q: ective rate of interest on an investment is 5.52%, what is the nominal rate of interes nded monthly?

A: Solution:- Effective rate of interest means the net interest rate for the year after effect of all…

Q: Estimates for one of two process upgrades are as follows: First Cost = Php 40,000 Annual Cost = Php…

A: Annual worth is the net revenue from the investment annually. It is calculated using the discounting…

Q: An engineer who is about to retire has accumulated $50 000 in a savings account that pays 6% per…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

Q: Calculate the break even number of units with a target profit of $120,000 if the fixed expenses are…

A: Break even analysis is used for identifying the number of units that the firm needs to produce in…

Q: Bob wants $300,000 in his retirement account when he retires in 30 years. How much does he need to…

A: This question can be answered in light of future value of annuity. Annuity is a payment of equal…

Q: You own Php35,000 from the bank for 3 years at 8.50% annual interest, and you will make equal…

A: Loan amount (P) = Php35,000 Monthly loan term (t) = 36 (i.e. 3 years * 12) Monthly interest rate (r)…

Q: What is the efficient market hypothesis? Explain this concept

A: 1) Efficient market hypothesis refers that the current market price captures all  past, present and…

Q: The market value of Lays Corporation's equity is 50 million $ and the market value of its debt is 27…

A: Cost of equity = Risk free rate + (Market rate of return - risk free rate) * Beta   Weight of equity…

Q: If the billing cycle is from the first day of April to the last day of April, how many days are in…

A: Billing cycle is the time period between two statement closing dates. It is also called billing…

Q: A company estimates that a certain piece of machinery will have to be replaced in five years' time…

A: Future value of growing annuity (due) = [P/(r-g)] *((1+r)^n - (1+g)^n / (r-g))P = Initial payment =…

Q: According to the CAPM, the expected return of an asset that has just diversifiable risk and no…

A: As per CAPM,  Expected Return = Rf + ( Beta * (Rm -Rf)) Rf = Risk free rate of return Rm = Market…

Q: the price of a bond with a 8% coupon rate, 10 semi-annual coupons, and a face value of $100 if the…

A: Price of bond is present value of coupon payment and present value of par value of bond on the yield…

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

A: Kenya: USA:

Q: Suppose that $10,000 of a 6-year fixed-principal Treasury note with a coupon rate of 6.5% is…

A: Treasury notes: Treasury notes are fixed principal coupon paying bonds that pay a semi-annual…

Q: Find the FUTURE VALUE in SIMPLE ANNUITY of each of the following scenarios where R is the regular…

A: Future Value of Ordinary Annuity refers to the concept which dictates the compounded value of a sum…

Q: WHAT IS THE ADVANTAGE OF offshore trust?

A: Offshore trust companies can be defined as those companies which help customers with a high net…

Q: Discuss the assumptions underlying the Gordon growth model.

A: Gorden Model recognizes that the current market price of the share reflects expected dividends . In…

Q: The Tamaraw Corporation is trying to determine the effect of its inventory turnover ratio and DSO on…

A: Answer -  Part 1 - Cash Conversion Cycle - Inventory conversion period + average collection period…

Q: a. What is the bond’s price today, if today’s market interest rate for bonds of comparable maturity…

A: Bond valuation refers to a method which is used to compute the current value or present value (PV)…

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: Andrew wants to open an account for his grandson that he hopes will have $30,000 in it when he turns…

A: Given,  Amount required at end of 21 years = 30,000 Interest per month = 2.5/12 = 0.20833% Time…

Q: You just won a prize that comes with two payout choices. The first option is to get $130,000 right…

A: For evaluating which proposal out of the given options is better, present worth of the cash flows…

Q: Solve manually using formulas. Xia received an HMO card which allows her to reimburse all of her…

A: The future value is used to measure how much money an account will hold after certain deposits have…

Q: Hail & Sons operates for 240 days in a year. It has been offered credit terms of 4/30, net 90 days.…

A: Credit term refers to a method used by the firms to encourage buyer or debtor to pay the amount of…

Q: Habit 1 can be described as Be proactive-You're in charge Think Win-Win-Everyone can win Put first…

A: Strong leadership used to play a vital role, which ensures the corporation that stay financial…

Q: Analyze the income statement of any company on an excel sheet using Graphs.   Please share the…

A: Target Corporation is an American department store chain  and it is eighth  largest retailer  in the…

Q: Smart Company is expecting temporary idle cash. Hence, it is considering investing in marketable…

A: Here, Per Transaction Cost id P10 Interest Rate is 6% Cash Payment is P12,000,000 monthly

Q: Describe how the 2008 financial crisis, when analyzed alongside the fall of LTCM, provides evidence…

A: The 2008 financial crisis occurred due to the burst in housing bubble that was fueled by subprime…

Q: Profitability Ratio for pepsi CO

A: The profitability ratio shows the efficiency of a company in making a profit. The profitability…

Q: What is the present value of a 5-year annuity of $4,900 with the first payment to be received 3…

A: As per formula Present value = [P+[P*{1-(1+r)-(n-1)}/r]]/(1+r)t Where P - Annual payment i.e. $4900…

Q: Identify the following interest rates as nominal or effective: (ABET, SO1) A: 1%= 6% per semiannual,…

A: Effective rate is the rate of return for particular period. Say 1 month, 1 year and compounded 1…

Q: (b) Consider the following two financial assets: (1) an ordinary share that is expected to pay a…

A: The dividend discount model states that we can find out the price of a stock based on the present…

Q: Jane is planning on saving for a car purchase in 8 years, however, she can only contribute to the…

A: Here we will use the concept of annuities and time value of money. The amount invested by Jane at…

Q: Nuka Cola has a beta of 0.85. If the risk-free rate of return is 4% and the expected return on  the…

A: Beta = 0.85 Risk free rate of return = 4% Market return = 9%

Q: increase a firm’s cost of capital

A: The consideration of a below-average risk project is likely to increase a firm's cost of capital.

Q: Mr. Jones will invests P 5,000 in a fund at the end of each 6 months to accumulate P 100,000 to buy…

A: Solved using Financial Calculator  FV = 100,000 PMT = -5000 I/Y = 2.45/2 = 1.2250 CPT N = 18 semi…

Q: 25) What is the present value of the following set of cash flows, discounted at 15% per year? Year 1…

A: Present Value=Future value/(1+r)n rate=15%

Q: The Diligence Corporation is considering a plant expansion that will increase its sales and net…

A: The net working capital: A company needs to make additional investments in inventories, needs to…

Q: Suppose that five years ago a corporation issued a 9-year bond with a coupon rate of 6.50% and the…

A: Bond price With coupon payment (C), period (n), yield (r) and face or par value (F), the bond price…

Q: Wendell’s Donut Shoppe is investigating the purchase of a new $42,800 donut-making machine. The new…

A: Here, Initial Investment is $42,800 Cost Savings is $5,700 Contribution per dozen is $1.50 No. of…

Q: (c) If the one-year interest rate on a dollar denominated Treasury bill is 4.5% p.a. and that on a…

A: The interest rate parity indicates that the forward premium or discount on currency exchange should…

Q: e Interest Coverage Ratio for pepsi company for year 2

A: Interest coverage ratio show the ability of the company to interest and debt on time without any…

Q: Fran has made a taxable gift of one-half of the value of the residence because Stan paid no…

A: Gift tax charges on the value of large gifts which is transferred and affect the wealth without any…

Q: Explain how a mortgage company’s degree of exposure to interest rate risk differs from that of other…

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

Q: An investor makes a single deposit of 10,000 into fund A for 10 years which earns a 6% effective…

A: Given, The amount invested is 10,000

Q: (2) In the context of project management, why is it important to manage risks?

A: A Risk is any untoward incident that can lead to failure of a project. A project  involves…

Q: Becky is a corporate account manager at a company that sells athletic equipment to other businesses.…

A: Bonus is the part of remuneration paid to employees in addition to the basic pay. Bonuses are paid…

Q: True or False. 1. Financial goals can be classified as to timing and purpose. 2. Consumable-product…

A: Financial goals- are the target i.e., saving target, spending target , investment target, etc., set…

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 -…