Q: 1. A P3000 loan was originally made at 8% simple interest for 4 years. At the end of this period the...
A: Simple interest is a straightforward method of calculating how much money you owe on a loan. To calc...
Q: An rrsp is now worth $229,000 after contributions of $3000 at the beginning of every six months for ...
A: Worth of rrsp"Future Value" is $229,000 Paymant type is begining of the period. Semi annual Contribu...
Q: A mortgage balance of $25,000 is to be repaid over a 10-year term by equal monthly payments at 5.6% ...
A: Loan Amount = $25,000 Interest rate = 5.6% Time Period = 10 Years
Q: Four years ago, Vulcan Ltd. issued a 20-year $1000 par value bond that pays $40 semi-annual coupon p...
A: Solution:- Bonds are the debts raised by the coupon. Bond holders are paid a fixed coupon periodical...
Q: Big Rock has several investment portfolios with a local mutual fund company. One of the company’s di...
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...
Q: Executing an order. Ask price was Php10.00 9:05am the price of the stock was Php9.00 -the price of t...
A: Solution:- When a limit sell order is placed, the order will get executed only when the price reache...
Q: default risk of comm
A: Commercial real states are the types of loans in which independent lenders, banks, etc are actively ...
Q: A stock is currently selling for S0 = $200: Over each of the next 6 months it is expected to grow by...
A: Here; One period is 6 months Time period is 1 year Expected upside movement is 10% Expected downsid...
Q: Kaleb Konstruction, Inc., has the following mutually exclusive projects available. The company has h...
A: Payback period is the amount of time required to recover initial investment. Payback period =Initial...
Q: You want to buy a house that has a purchase price of $190,000. You plan to make a down payment of 10...
A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount...
Q: Compute the present value of each scenario. Show the complete solution. 1. Your mother is expecting ...
A: The present value is calculated as per the concept of time value of money. Here, the future value is...
Q: A special power tool for plastic products costs $400,000 and has a four-year useful life, no salvage...
A: The period in which the cost of asset including working capital investment is fully recovered from t...
Q: Suppose the demand functions for two products are q1 = f(p1, p2) and q2 = g(p1, p2) where p1, p2, q1...
A: Given Demand function for q1 = f(p1, p2) Demand function for q2= g(p1, p2) where (p1, p2, q1, q2) a...
Q: What should be the prices of the following preferred stocks if comparable securities yield 5 percent...
A: Preferred Stock: These are stocks issued by the company to raise preferred capital. The holders of s...
Q: 3. If money is worth 8% compounded quarter ly, determine the present value of the following: a. An a...
A: Annuity is a series of equal cash flows occurring at regular intervals. A perpetuity is an annuity t...
Q: 9-16. (Weightea average cost of capital) The capital structure for the ABC Corporation is provided b...
A: Solution:- Weighted Average Cost of Capital means the average minimum return required by all the fun...
Q: the anhulty of the money which has fUture Wo ed monthly at the rate of 11%?
A: The future value of annuity includes the annuity amount deposited and interest accumulated over the ...
Q: The returns on the Bledsoe Small-Cap Fund are the most volatile of all the mutual funds offered in t...
A: Sharp ratio It is a measure of risk adjusted return. In other words, it tells about the excess retur...
Q: What amount of money deposited 35 years ago at 8% interest would provide a perpetual payment of $10,...
A: A perpetual payment is one that goes on forever. We will need to compute the present value of the pe...
Q: A company produces a certain commodity. The labor and material cost for each item produce is P112. O...
A: Given: Fixed cost = P316,000 Selling price = P425 Variable cost = P112 Other variable cost =P67
Q: Calculate the simple interest earned. Round to the nearest cent. P = $3900, r = 5.3%, t = 6 months
A: P = $3900 r = 5.3% t = 6 monnths
Q: Which of the following is the amount of cash remaining after a company has covered its operating act...
A: Cash flows are majorly divided into 3 types: - Operating cash flows - Investing cash flows - Financi...
Q: Hy point to straight-line. Now what is the present value of the depreciation tax shields? (Enter you...
A: Tax shield of depreciation is benefits in taxation due to the depreciation of equipment available. P...
Q: Find the unknown quantity, assuming compound interest (report value as a negative number): 50 50 50 ...
A: Interest rate is 4% Time period is 7 years To Find: Value of F
Q: Big Rock is listed on the local stock exchange and its stock has had mixed performance over the last...
A: Initial value is $1000 Value at end of year 1 is $1268 Value at end of year 2 is $1334 Value at end ...
Q: what are the key characteristics of active fund management and passive fund management, focusing on ...
A: The key characteristics of active fund management is the frequent buying and selling in an attempt t...
Q: Assume that you start with a balance of $3900 on your credit card. During the first month you charge...
A: Given, Starting balance is $3900. First month charge is $400. Second month charge is $650 Rate of in...
Q: For this question the inflation rates are actual inflation levels ( so a 6 month inflation rate incr...
A: Treasury Inflation Protection Securities: Treasury Inflation Protection Securities, or TIPS, in shor...
Q: a. Determine the equal payment series coumpound amount factor after 8 years b. Determine the total a...
A: A stream of equal cash flows paid or received periodically is termed as annuity. Annuity is either r...
Q: Consider the following cash flows: Year Cash Flow -$29,900 13,800 15,100 11,500 1 3 a. What is the p...
A: Profitability index measures the return generated by each dollar of investment. Itcan be calculated ...
Q: The real risk-free rate is 2.25%. Inflation is expected to be 2.5% this year and 4.25% during the ne...
A: The yield on treasury securities is the rate of return or interest that is paid by the government to...
Q: les Galactic Industries is choosing a steel production process. Their first option "Alpha" has a fir...
A: The procedure through which a company evaluates possible big investments is known as capital budgeti...
Q: 7. Under the Equal Credit Opportunity Act (ECOA), it is unlawful to discriminate against an applican...
A: Equal Credit Opportunity Act The ECOA law is only applicable in the United States, ECOA law is enfor...
Q: Connie wants to have an annuity payment of $2,250 at the END of every three months. How much should ...
A: Present value of annuities will give what is cash amount to be paid today.
Q: rejecting it? LO 3 8. Calculating IRR What is the IRR of the following set of cash flows? Year Cash ...
A: Net Present Value: Net present value (NPV) is the excess of present value of cash inflows over the p...
Q: 1. if a small bank lends to a customer who wants a mortgage that is too large for the small bank to ...
A: A loan is a financial transaction in which one or more individuals, organisations, or other entities...
Q: 4. Calculating AAR You're trying to determine whether or not to expand vour business by building a n...
A: The accounting rate of return is the rate of return which is expected from the investment made by th...
Q: 5. Calculating IRR A firm evaluates all of its projects by applying the IRR rule. If the required re...
A: Year Cash flow 0 -157300 1 74000 2 87000 3 46000
Q: A portfolio that combines the risk-free asset and the market portfolio has an expected return of 6.4...
A: Given Expected return is 6.4% and standard deviation is 9.4%. The risk free rate is 3.4% Expected r...
Q: Suppose you take out a loan for 180 days in the amount of $11,500 at 14% ordinary interest. After 60...
A: A loan is an amount borrowed by a party in exchange for its repayment along with some interest.
Q: A stock that pays an annual dividend of $0.52 per share has a current price of $30.50. Find the divi...
A: Annual dividend = $0.52 Current price = $30.50
Q: What are 'accelerated filers,' and how are they chosen (i.e., based on income, number of employees, ...
A: An issuer qualifies as an accelerated filer if its total global public float is greater than or equa...
Q: Suppose that you owned 1000 shares of stock in Procter & Gamble (PG). You purchased the shares at a ...
A: Given: Particulars Amount Number of shares 1000 Share price $48.97 Broker charges 1.70%
Q: have 24 quarts of brown stock. You need .75 cups to make one serving of kidney beans. How many servi...
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions a...
Q: The interest rate for the first five years of a $95,000 mortgage is 7.2% compounded semiannually. Mo...
A: Given, The mortgage loan is $95000 Rate is 7.2% Term of amortization is 25 years Prepayment is $300...
Q: Dreamline expects to earn $20 per share this year and intends to pay out $8 in dividends to sharehol...
A: The percentage of profits held in the company as retained earnings is known as the retention ratio. ...
Q: Your bank pays 12% interest, compounded quarterly. How much should you deposit now to yield an annui...
A: Present value is the amount that should be deposited to the given yield at each of the three months.
Q: Suppose you plan to go on a dream vacation for your anniversary in 7 years from today and you plan t...
A: We need to use future value annuity formula to calculate monthly deposit to reach goal. PMT =FV(1+i)...
Q: Chef Fabio does beginning inventory on Thursday night and finds that he has $1456 in food products i...
A: The cost as a percentage of the sales helps in finding out exactly how much profit we are earning an...
Q: A nominal rate of interest of 7% compounded continuously is equivalent to an effective annual rate o...
A: Interest rate (r) = 7% Mathematics constant (e) = 2.7182818284590452353602874713527
Step by step
Solved in 2 steps with 2 images
- The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given here. The company’s cost of capital is 10%. Should the firm operate the truck until the end of its 5-year physical life? If not, then what is its optimal economic life? Would the introduction of salvage values, in addition to operating cash flows, ever reduce the expected NPV and/or IRR of a project?Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. The replacement machine is eligible for 100% bonus depreciation at the time of purchase- The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 25%, and its WACC is 11%. Should it replace the old machine?Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $17 million, and production and sales will require an initial $5 million investment in net operating working capital. The company’s tax rate is 25%. What is the initial investment outlay? The company spent and expensed $150,000 on research related to the new product last year. What is the initial investment outlay? Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. What is the initial investment outlay?
- Alfredo Company purchased a new 3-D printer for $900,000. Although this printer is expected to last for ten years, Alfredo knows the technology will become old quickly, and so they plan to replace this printer in three years. At that point, Alfredo believes it will be able to sell the printer for $15,000. Calculate yearly depreciation using the double-declining-balance method.Filkins Fabric Company is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Machine 190-3, which has a cost of $190,000, a 3-year expected life, and after-tax cash flows (labor savings and depreciation) of $87,000 per year; and Machine 360-6, which has a cost of $360,000, a 6-year life, and after-tax cash flows of $98,300 per year. Knitting machine prices are not expected to rise because inflation will be offset by cheaper components (microprocessors) used in the machines. Assume that Filkins’ cost of capital is 14%. Should the firm replace its old knitting machine? If so, which new machine should it use? By how much would the value of the company increase if it accepted the better machine? What is the equivalent annual annuity for each machine?After discovering a new gold vein in the Colorado mountains, CTC Mining Corporation must decide whether to go ahead and develop the deposit. The most cost-effective method of mining gold is sulfuric acid extraction, a process that could result in environmental damage. Before proceeding with the extraction, CTC must spend 900,000 for new mining equipment and pay 165,000 for its installation. The mined gold will net the firm an estimated 350,000 each year for the 5-year life of the vein. CTCs cost of capital is 14%. For the purposes of this problem, assume that the cash inflows occur at the end of the year. a. What are the projects NPV and IRR? b. Should this project be undertaken if environmental impacts were not a consideration? c. How should environmental effects be considered when evaluating this or any other project? How might these concepts affect the decision in part b?