The payback method measures: The profitability of an investment. The net cash inflow from an investment. The economic life of an investment. How rapidly the investment is recovered.

Q: How does additional debt in a firm influence its WACC? its free cash flow (FCF)? the agency costs of…

A: Debt is the presence of additional financial leverage in the total business and it will be having…

Q: Tan Company purchased a large server for $23,000. The company paid 40.00% of the value as a…

A: The concept in the question is of Annuity. Annuity is a stream of equal payments/receipts made at…

Q: A man invested P1,000 per month on a bank that offers 6% interest compounded annually. How much can…

A: The Concept is of Annuity. Annuity is a series of fixed payments/receipts made at regular interval…

Q: How much would you pay for a zero coupon bond with a par value of $1000, a maturity of 21 years, if…

A: Zero coupon bond is a type of bond which will not pay with any coupon payment and it will only pay…

Q: Amar Corporation pays 11.6% interest on its outstanding bonds.  If its tax rate is 40%, what is its…

A: Solution:- When a company issue bonds to raise funds, it pays interest on it. This interest is…

Q: Please answer again - Calculate the payback period for above - Calculate the NPV for abov

A: Payback period is period required to initial amount of investment in the project that was done…

Q: Brooks Clinic is considering investing in new heart-monitoring equipment. It has two options. Option…

A: Given, The Option A and Option B. The cost of capital is 5%

Q: 1. Murdoch Pty Ltd is considering three mutually exclusive projects. The initial cash outflow and…

A: Here,

Q: The down payment or equity needed for this investment is $60,000 (outflow) Cash Flow $15,000 5,000…

A: MIRR:  By assuming that profits are reinvested at the company's cost of capital and that cash…

Q: pia Inc. issued bonds for $375,000 that were redeemable in 5 years. They established a sinking fund…

A: The bonds are paid by the monthly payments that are to be accumulated over the period of time by…

Q: will generate $1.82 million per year (starting at the end of the first year) in perpetuity.…

A: Net present value is the difference between the present value of cash flow and initial investment…

Q: The maximum loss a seller of a stock put option can suffer is the _

A: Put Option: Put option provides the buyer the right to sell an asset at a predetermined price.…

Q: a. Calculate the size of the periodic sinking fund deposit. Round your answer up to the next cent b.…

A: Please note that as per the guidelines, only the first three questions a, b and c are to be…

Q: At the end of every month you invest $100 into the stock market for the next 48 years. Assuming the…

A: Monthly investment (m) = $100 Monthly rate of return (r) = 0.00666666666666667 (i.e. 0.08 / 12)…

Q: DF Ltd wants to raise $20 million. The entity is planning to issue 15-year bonds to raise these…

A: A bond is merely a loan that a business has obtained. The firm receives the funding from investors…

Q: Aaron's student loan of $24,500 at 3.32% compounded quarterly was amortized over 5 years with…

A: Loan Amount is $24,500 Interest rate is 3.32% compounded quarterly Time period of loan is 5 years…

Q: EXAMPLE: Evaluating Alternal Three plans are considered for an engineering design problem: Plan A:…

A: The annual equivalent cost is that cost which is equivalent to all cost that are going to occur…

Q: Your business manager forwards the following information to you. Your businesses earned a real rate…

A: Real rate of return = 0.076 or 7.6% Inflation rate = 0.096 or 9.6% Nominal rate of return = ?…

Q: Holding other factors constant, an increase in the tax rate on revenue generated by capital will:…

A: Increase in tax rate acts as the addition of tax liability of the business. This tax rate is…

Q: A stock is expected to pay $0.80 per share every year indefinitely. If the current price of the…

A: Dividend per share (D) = $0.80 Equity cost of capital (e) = 0.064 Price per share after 5 years = ?…

Q: s it still beneficial for a person to have an insurance policy? Explain your answer in detail.

A: Insurance Policy - It is a written document between the insurer and policy holder. In which insurer…

Q: A call option for a P5,000,000-face value bond has a strike price of 101. If the market value of the…

A: Strike price = $5,000,000 * 1.01 = $5,050,000 (i.e. Face value * priced at) Market value =…

Q: What's the equation and answer in excel?

A: Information Provided: Dividend Paid (D0) = $1.95 Growth rate = 3.15% Required return = 8%

Q: State and Prob. Project A's return Good. 30% Average 40% Poor 30% 27 18 5 Project B's return 35 15…

A: “Since you have posted a question with multiple subparts, we will solve the first three subparts for…

Q: how did you get the yield on debt

A: The yield on Debt: It represents the rate of return expected by the debtholder if the debt…

Q: How much interest (to the nearest dollar) would be saved on the following loan if the home were…

A: Mortgage/ Borrowings:  Borrowings are the loans taken by an individual, from banks or non-banking…

Q: What is the percentage change in a 5-year zero-coupon bond with a duration of 5 years, when interest…

A: Duration of zero coupon bond is equal to maturity period of zero coupon bond

Q: What factors can you think of that might explain why U.S. stock markets are more efficient (i.e.,…

A: The stock market refers to the place where the shares of the various public listed companies are…

Q: You own a bond with a face value of $1,000 and a conversion ratio of 350. What is the conversion…

A: Face value of the bond = $1,000 Conversion ratio = 350 Conversion price = ?   Conversion price is…

Q: BQ, Incorporated, is considering making an offer to purchase iReport Publications. The vice…

A: Answer -  Part 1 -  Calculation of the value of iReport to BQ now -  The price earning growth ratio…

Q: 2)Pebbles & Stone Enterprise currently sells on credit only and does not offer any discounts. In an…

A: The PV analysis is used to find out the profitability of a project. It uses the concept of the time…

Q: Why you have not taken depreciation(deduct from profit and then add to obtain cash flows) into accou

A: Depreciation   is a admissible expenses  for taxation purpose i.e., tax will be calculated on the…

Q: How much would $2,875 due in 50 years be worth today if the discount rate were 7.5%? Select the…

A: Present value factor can be calculated as follows = 1/(1+i) + 1/(1+i)^2 + 1/(1+i)^3 + 1/(1+i)^n…

Q: Jacqueline purchased a machine for $25,000 for his company. He paid 5.00% of this amount as a down…

A: We know that if any down payment is made in the beginning then such an amount will be reduce from…

Q: Consider sharing of income risk as a gain from marriage. Assume that individual incomes Y are drawn…

A: Risk aversion: The investor who favors capital preservation above the possibility of earning a…

Q: (Bond valuation) A bond that matures in 15years has a ​$1,000 par value. The annual coupon interest…

A: Maturity period (p) = 15 years Par value or maturity value (Z) = $1,000 Coupon rate = 0.13 or 13%…

Q: What is a firm’s business risk? operating leverage? How does the operating leverage affect the…

A: A business can be defined as the entity or organization established to earn profit by providing…

Q: You run a school in Florida. Fixed monthly cost is $5,220.00 for rent and utilities, $5,974.00 is…

A: Profit is a function of revenue and expenses. They both differ at different locations. Hence the…

Q: SS Ltd is a listed company that operates three divisions, all focused on single activities as shown…

A: Beta is an indicator of Systematic risk in security as compared to systematic risk in market. The…

Q: Nana and Abena Sarfo are saving for the university education of their newborn daughter, Akosua. The…

A: Annual university expenses (E) = GH₵ 30000 Expense period (p) = 4 years Interest rate (r) = 0.14…

Q: OpenSeas, Inc. is evaluating the purchase of a new cruise ship. The ship would cost $505 million,…

A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…

Q: Mr. Angelo borrowed $50,000.00 at a compound interest rate of 3% per month, with a promise to repay…

A: Given:- Sum borrowed or say P = $50,000 Compound interest rate of 3% per month. Proposal by the…

Q: What do you think about vanilla options as hedging market risk vehicle? In your answer please…

A: The vanilla options are nothing but buying call and put options and these give opportunity to buy or…

Q: how was the rate found?

A: Details about property are as follows: Name of Item Date of purchase Relates to which Quarter…

Q: Ruth Hornsby is looking to invest in a three-year bond that makes semiannual coupon payments at a…

A: Here, To Find: Yield to maturity =?

Q: 2. Whale Wash Limited issued eleven-year bonds one year ago at a coupon rate of 7.5%. The bonds have…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Your company has earnings per share of $8. It has 1 million shares outstanding, each of which has a…

A: Answer a:- * Calculation of number of shares after merger:- We are given that our company has a…

Q: East Mid West -outh West Grand Total 8000 7000 6000 5000 4000 29 $ 55 $ 23 $ 93 $ 200 $ 1,921.75…

A: The charts and graphs are very important for understanding the performance of company overall during…

Q: Sutton Corporation, which has a zero tax rate due to tax loss carry-forwards, is considering a…

A: Loan vs lease:  Personal loans, home loans, student loans, and other sorts of loans are available.…

Q: A landscaping company buys a new bulldozer for $61,000.00. The company makes a down payment of…

A: The loans are paid by the monthly payments that are equal monthly payments these carry the payment…

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.