The interest rate is 5%. An asset pays $250 in each of the next four years. The asset is currently worth $_____ and is __________ (overpriced / underpriced) at a price of $900
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The interest rate is 5%. An asset pays $250 in each of the next four years. The asset is currently
worth $_____ and is __________ (overpriced / underpriced) at a price of $900
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- Most businesses replace their computers every two to three years. Assume that a computer costs $2,000 and that it fully depreciates in 3 years, at which point it has no resale value and is thrown away. Suppose the computer did not fully depreciate but still had a $250 value at the time it was replaced. What is the minimum annual cash flow that a computer must generate to be worth the purchase? The minimum annual cash flow must be at least $Slate Corp is a merchandising company that uses the periodic inventory system. Balances Sales 500,000 Purchases 225,000 Inventory (beginning ) 16,000 Inventory (ending) 30,000 Operating expenses 148,000 Income tax expense 10,000 Retained earnings (beginning) 53,000 Dividends 15,000 What is the net income?Consider a five-year MACRS asset, which can be purchased at $80.000. Thesalvage value of this asset is expected to be $42,000 at the end of three years.What is the amount of gain (or loss) when the asset is disposed of at the end of three years?(a) Gain $11,280(b) Gain $9,860(c) Loss $9,860(d) Gain $18,960
- Suppose a company had an initial investment of $40,000. The cash flow for the next five years are $19,000,$19,000,$15,000,$19,000, and $16,000, "respectively. The interest rate is 11%. What is the discounted payback period? (Enter only whole numbers)A convertible bond has a par value of $1,000, but its current market price is $950. The current priceof the issuing company's stock is $19, and the conversion ratio is 40 shares. The bond's conversionpremium is _________.A company has to decide whether to invest money in the development of a microbiological product. The company’s research director has estimated that there is a 60% chance that a successful development could be achieved in 2 years. However, if the product had not been successfully developed at the end of this period, the company would abandon the project, which would lead to a loss in present-value terms of $3 million. In the event of a successful development, a decision would have to be made on the scale of production. The returns generated would depend on the level of sales which could be achieved over the period of the product’s life. For simplicity, these have been categorized as either high or low. If the company opted for large-volume production and high sales were achieved, then net returns with a present-value of $6 million would be obtained. However, large-scale production followed by low sales would lead to net returns with a present value of only $1 million. In contrast, if…
- Given the following net rents for years 1-5 and a required return of 10%, what is the effective rent? Yr1: $150 Yr2: $140 Yr3: $130 Yr4: $120 Yr5: $100 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.A new bottle-capping machine costs $45 000, including $5000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time (assume straight-line depreciation). Operating and maintenance costs are expected to be $3000 for the first year, increasing by $1000 each year thereafter. Interest is 12 percent. What is the economic life of the bottle capper?A printing machine is bought at $1 million and is estimated to have a salvage value of $100,000 after 500,000 copies. The annual cost of renting the space for the business is $100,000, power cost per copy is $1.50, and maintenance and paper cost per copy is $3. The expected annual production of the machine is 100,000 copies. Annual interest is 12%. Determine: a. The annual operation and maintenace cost of the machine b. The annual depreciation of the machine. c. Production cost per copy. Show your solution.
- The following data regarding Atlas Construction Company are available:Current assets $300,000Current liabilities 200,000Long-term liabilities 500,000Total net worth 200,000What is the value of the company’s fixed assets?A homeowner’s policy was cancelled by the Illinois insurance guaranty fund due to insolvency of the insurance company the unearned premium was $625.00. What is the premium refund due to the insured for the unexpired policy period? 1. $525 2. $625 3.$1150 4. $0A commercial investment property was purchased for $22,000,000. The property's net lettable area is 3,200 m2. The property is operating at a stabilised occupancy of 90.0%. The leases are gross and the annual base rent in the first year is $590 per m2. The rent is reviewed annually and increased at a fixed rate of 2.00%. The building doesn't generate any miscellaneous income. The fixed OPEX are $75 per m2 and variable OPEX are $90 per m2 in the first year. The annual OPEX inflation is 4.50%. The property is purchased with 60.00% in debt financing with a fully amortising loan for a term of 20 years, monthly payments and an annual interest rate of 5.65%. Calculate Year 3 Equity Dividend Rate. Enter your answer without the % sign rounded to two decimal places