To estimate the total price for a project, we need to consider 5 requirements to develop the pricing. What are these five main requirements?

Q: Find the monthly house payments necessary to amortize the following loan. What are the total payment...

A: Loan amount (PV) = 196000 Interest rate = 6.89% Monthly interest rate (r) = 6.89%/12 = 0.57416666666...

Q: Given the cash flow diagram below, expressed in months, determine: A. The Present value at a nominal...

A: NPV and IRR both are methods of capital budgeting that are used to make decesion of selecting and re...

Q: Assume you have formed a portfolio of stocks by investing $200 in stock X, $300 in stock Y, and $500...

A: Beta factor can be defined as a measure of systematic risk of a security. That is, beta factor is a ...

Q: Suppose you are an investor with a choice between three securities that are identical in every way e...

A: Solution : If we invest in any security than we will firstly calculate the return on that investment...

Q: Suggest how stockholders' direct engagement with managers and management remuneration may be utilise...

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

Q: 3. Find the annual percentage rate (APR), a.k.a. annual equivalent rate (AER), of interest of a savi...

A: Since you have posted multiple questions we shall be solving the first one for you. In case you wish...

Q: Your firm is contemplating the purchase of a new $595,000 computer-based order entry system. The sys...

A: Here, Initial Investment is $595,000 Salvage Value of is $81,000 Savings before taxes every year is ...

Q: #1 Matthew makes a series of payments at the beginning of each year for 20 years. The first payment ...

A: Present value of a future amount With interest rate (i), period (t) and future value (FV), the prese...

Q: Tech Techies Company has a project available with the following cash flows : Year Cash Flow 0 -$16...

A: Year Cash flow 0 -16800 1 6900 2 8200 3 3500 4 3100

Q: Taylor and Charlie currently live in New Orleans. Taylor is currently making $60,000 per year, and C...

A: Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first t...

Q: For May, Young Company has budgeted its cash receipts at P125,000 and its cash disbursements at P138...

A: Cash receipts = P125,000 Cash disbursements = P138,000 Opening cash balance = P17000 Closing balance...

Q: A bond has an interest rate of 15% for the next 5 years The current cost and par value of the bond i...

A: Net present value is the sum of the present values of net of all future cash outflows and inflows di...

Q: 6. An investment of P3,000,000.00 earns interest of 9% compounded continuously. the effective rate o...

A: Effective interest ratee is the interest considering the impact of the compounding on the interest a...

Q: Student A wishes to invest in cryptocurrency, how long will it take to double his investment when he...

A:  Future Value refers to the value of the current asset or investment or of cash flows at a specified...

Q: The Global Growth Fund is a load fund with a 5 percent front load fee. It started the year with a ne...

A: Start Net Asset Value (NAV) = $16.60 End Net Asset Value (NAV) = $18.25 Fund distributed = $1.25 Fro...

Q: If the sum of P12,000.00 is deposited in an account earning interest rate of 9% compounded quarterly...

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

Q: The maintenance cost of a new equipment is projected to start at the end of the 2nd year at an amoun...

A: Cost in year n = Cn C2 = P 8000 C6 = P 10000 Uniform increase in cost = (10000 - 8000) / (6 - 2) = P...

Q: Yebeng Sdn Bhd operates a very successful chain of shoes shop in Malaysia. The company needs to rais...

A: To Find: Cost of Capital WACC

Q: You have RM9,000 that you plan to invest in a compound interest bearing instrument. Your investment ...

A: Compound interest means that interest is charged on the principal amount as well as the interest amo...

Q: A Montana state bond can be converted to $1,000 within 5 years of purchase. If the Montana bonds are...

A: Value of the bonds can be calculated as: = Maturity Value / (1+i)^n Where, i = interest rate per per...

Q: Determine which one of these three portfolios dominates another. Name the dominated portfolio and th...

A: Solution : i) As compared to return under three investment which was under Portfolio option Blue, Ye...

Q: Mick plans to start saving money for retirement. By taking 10% of monthly gross income. Mick is able...

A: We can use the concept of time value of money here. As per the concept of time value of money the wo...

Q: buy a new house soon he’s considering two mortgage options. 15 year mortgage with a APR 2.75% or a 3...

A: The mortgages are paid by the monthly payment that carry the payment of interest and payment of the ...

Q: re in 20 years. She opens up a retirement account with an APR of 5.25% compounded monthly. She will ...

A: There is need of proper planning for the retirement and if there is proper planning on time better p...

Q: On January 1, 2013, Janet buys a bond for $10,000 that makes coupon payments of $600 after each of t...

A: Here, Coupon Payment is $600 Face Value of Bond is $10,000 Time to maturity remaining at Feb 1, 2014...

Q: Compute the cost of equity for this project      2. Compute the relevant cost of debt for this proje...

A: Cost of Equity: It represents the cost of raising equity capital from equity investors. The equity ...

Q: You have just retired with savings of $4 million. If you expect to live for 34 years and to earn 13%...

A: This is the case of an annuity due. This is because money is being spend at the start of each year.

Q: Consider the following four debt securities, which are identical in every characteristic except as n...

A: Here, W is  a corporate bond rated AAAX is a corporate bond rate BBBY is a corporate bond rated AAA ...

Q: ble below is the information about three RM1000 par value bonds and each of which pays coupon semian...

A: The price of bond is present value of coupon payment and present value of par value of bond these ar...

Q: urvivorship

A:   A life insurance policy refers to the contract between a person and the insurance company. An insu...

Q: the amount of the down payment?

A: “Since you have posted a question with multiple sub-parts, we will solve the first three subparts fo...

Q: A loan of $6000 is being repaid with quarterly installments of P at the end of each quarter for 5 ye...

A: Given, Loan amount is $6000 Term of loan is 5 years rate is 12% Payment is made quarterly.

Q: no preferred stock. The yield to at the company's WACCs 12.60% What is Pearson's cost of common equi...

A: Weighted average cost of capital is the cost o capital considering the weight of the different compo...

Q: 3. A mortgage balance of $18000 is renewed for the remaining amortization period of 3ycars at %4 com...

A: Mortgage balance (B) = $18000 n = 3 years = 36 months Interest rate = 4% compounded semiannually Mon...

Q: 4) An n-year loan involves payments of $800 at the end of each month. The interest rate is 12% conve...

A: Here, Monthly Payment is $800 Interest Rate is 12% Compounding Period is Monthly i.e. 12 Interest on...

Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...

A: Cost of equity with constant growth rate in dividends forever With next year dividend (D1), current ...

Q: A) An annuity with a price of $200,000, a term of eight years, and an annual payment of $37,500. Fin...

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any ...

Q: Consider the following four debt securities, which are identical in every characteristic except as n...

A: Interest rate or YTM of a bond Yield to maturity (YTM) of a bond is the total anticipated return on ...

Q: You are financing a car worth $29039.30 including tax. The interest rate is 10.8% compounded daily. ...

A: Loan amount (L) = $29039.30 - $1700 = $27339.30 Interest rate = 10.8% daily compounding (m = 365) n ...

Q: Suppose that a random sample of twenty recently sold houses in a certain city has a mean sales price...

A: The basic assumption that sales are normally distributed are bell shaped symmetrical on both sides a...

Q: A $10,000 note with 6% interest payable quarterly is purchased for $8,000. The note matures in 5 yea...

A: Par value = $10,000 Coupon rate = 6% Quarterly coupon amount = 10000*0.06/4 = $150 Period = 5 Years ...

Q: 2. It is estimated that a stand of timber will net P 25,000 a year for the next 10 years and that th...

A: Annual cash inflow (P) = P25000 Interest rate (r) = 6% Salvage value (SV) = P15000 Period (n) = 10 Y...

Q: 7. Spence Company is considering a project that has the following cash flow. What is the project's I...

A: Year    Cash flow 0          -1050 1           400 2           400 3           400 4           400  

Q: A sum of Rs 390200 is to be paid back in three equal annual instalments. How much is each instalment...

A: The installment amount can be calculated with the help of present value of annuity function.

Q: (WACC) and leverage

A: Cost of capital refers to the tool which is helpful in analyzing the cost of the capital projects an...

Q: Suppose à priñčipal Generate a table of the corresponding effective interest rates. (ruond to 3 deci...

A: Effective interest rate is the interest rate considering the impact of the compounding on the intere...

Q: (Working with the income​ statement)  If the Marifield Steel Fabrication Company earned $463,000 in...

A: Solution : Earning Per share ( EPS) means that amount which was Calculated as follows. Net Income / ...

Q: In year 2018, the real rate of interest was 9 percent and infation was meesured at 3 perbent Whet wa...

A: Real Rate of Return = 9% Inflation = 3%

Q: Perkins, Inc., is considering an investment of $383,000 in an asset with an economic life of 5 years...

A: Cash Flows: Cash flows eliminate the impact of non-cash charges and give the true picture of the cas...

Q: 1. If Ysabelle borrowed money from Nina with a simple interest rate of 12%, determine the present wo...

A: The simple interest is the interest without the compounding that means there is no interest on the i...

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.