Q: 15. Multinational capital budgeting International Machinery Company (IMC) is a Swedish multinational…
A: 1.Net present value is calculated by deducting initial investment from present value of cash…
Q: The "Float" of a company's stock represents: Total shares not held by Officers and Directors.…
A: Solution:- The funds raised by a company are known as its share capital. The total share capital is…
Q: Question 12 Common information: A loan is amortized by level payments made at the end of each…
A: The amortization schedule refers to the breakdown of the periodic payments into interest and…
Q: Fourteen years and three months ago, you took out a 30- year loan of $300,000. The loan has a 7% APR…
A: Mortgage payments are the fixed amount paid by the borrower to the lender that includes the interest…
Q: The Odessa Supply Company is considering obtaining a loan from a sales finance company secured by…
A: The annual financing cost is calculated by dividing the interest cost plus field warehouse fee by…
Q: Swenson Oil & Gas allows its customers to prepurchase heating oil in June for the coming winter.…
A: Swenson is long on the asset , and asset price has decreased he will make losses because he ordered…
Q: Which one of the following would most accurately characterize Ben Bernanke's attitude toward the…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: A portfolio was created by investing 34% of the funds in Stock A (Variance = 0.06%) and the balance…
A: Given: Particulars Stock A Stock B Standard deviation 0.80% Weight 34% 66% Correlation…
Q: A person borrowed $1000 from Bank A, $1000 The nominal annual interest rate of all 3 banks are the…
A: In this question, we will be determine the value of loan payable after 5 year with the different…
Q: Howden is interested in purchasing a jet ski for $15 834. He chose to finance this purchase across a…
A: Interest payment refers to the amount that is being paid with the principal amount in exchange for…
Q: Suppose that zero interest rates with continuous compounding are as follows: Maturity (years) Rate…
A: Data given: Maturity (years) Rate(% per annum) 1 2.0 2 4.0 3 4.7 4 5.2 5 5.5
Q: The equivalent annual-pay yield-to-maturity (YTM) for a 11.35% coupon weekly-pay bond is closest to…
A: As the coupons are paid weekly, the equivalent rate will be calculated as the effective annual rate…
Q: For the credit card account, assume one month between billing dates (with the appropriate number of…
A: We have the transaction history of a credit card. We need to find the Average daily balance, the…
Q: Yamana Gold Inc. (AUY) currently no pays dividend but its new management will pay a dividend at the…
A: concept. 1. dividend per share = earnings per share * payout ratio. 2. According to gordon's…
Q: How life insurance contracts are different from other financial services or products?
A: Life insurance is a form of financial protection that helps individuals and families prepare for the…
Q: Weisman Electronics recently paid a dividend of $2.00, the market yield (S & P 500) is 10%, the…
A: Risk free rate (Rf) = 0.04 Beta (b) = 2.5 Market return (Rm) = 0.10 Just paid dividend (D0) = $2…
Q: Match the formula to type of Break Even Prompts Contribution Margin (Dollars) Contribution Margin…
A: We need to match the formula for break even sales to the parameters given.
Q: A real estate broker has a listing where the seller agreed to should capital gains tax and broker's…
A: Given: Commission Rate: 5% Net Proceeds Required After Tax: P4,895,000 Capital Gain Tax : Assumed…
Q: . Yield to maturity interest rates and spot interest rates are the same T/F
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Mr. Samson hired the services of a broker to sell his property. The owner said he bought it at…
A: it is herby assumed that 5% commissionm will be paid on sales consideration received Purchase price…
Q: What is the pecking order in capital financing and what are its implications to managers?
A: Capital Financing: Capital financing/funding represents the amount provided by the lenders &…
Q: Under ASC Topic 606 for revenue recognition, which of the following factors is not an indicator of…
A: Its Very Important to determine the Principal and agent as recording of revenue by both Principal…
Q: If the present value of an annuity is 38888 dollars, r=3.4% and t=19 years. Assuming annual payments…
A: Annual cash flow amount is calculated using following equation Annual cash flow = PV×r(1-1(1+r)n)…
Q: You want to invest $44,000 in a portfolio with a beta of no more than 1.4 and an expected return of…
A: The portfolio's expected return can be calculated by the sum of their respective weights multiplied…
Q: 28. A car dealer is offering a 5-year loan (starting today) at 6% on a vehicle costing $35,999…
A: The periodic payment made at each interval to repay a debt or to accumulate funds for a specific…
Q: Describe a credit default swap and its purpose. Note the rationale for the protection buyer and the…
A: The question to above are answered below:
Q: Tom deposits $100 to his investment account at the end of each month for the first n month, and $200…
A: We have a series of annuity running for first n months and then another one running over next 2n…
Q: Your company has been doing well, reaching $1.04 million in earnings, and is considering launching a…
A: Free cash flows for year 0=(11,22,000) Year 1 =1,283,176.46 Year 2 = 1377,453.26…
Q: discuss the role of a financial manager
A: A financial manager is a professional who is responsibles for the financial health of an…
Q: Date 2022-02-05 2022-02-06 2022-02-07 2022-02-08 2022-02-09 O A. 0.09%. OB. 0.81%. $ $ $ $ $ O C.…
A: We have the daily adjusted closing prices of a stock over a few days. We need to calculate the…
Q: finish your engineering degree with $17,350 in student loans. The interest rate on your loans is…
A: Loans are paid the monthly payments and these monthly payments are equal and fixed and these carry…
Q: Samantha purchased 845 shares of Apple for $172,540 in a margin account and posted initial margin of…
A: Current price of Apple = $172540845 = $204 Price of the Apple below which Samantha would get a…
Q: Drs. Jones and Smith have reviewed the budget you provided to them for their expansion efforts. Both…
A: Planning, arranging, managing, and controlling financial activities, such as the acquisition and use…
Q: As the number of stocks in a portfolio increase, the portfolio’s systematic risk can either increase…
A: Solution: When an investor invests in equity market, it get exposed to two types of risk- a)…
Q: Determine Hopewell's cash conversion cycle. Assume that there are 365 days per year. Do not round…
A: Cash Conversion Cycle: The cash conversion cycle is a metric that is used to express the period (in…
Q: You buy a 55-strike call for $3.45. What is the breakeven price of the underlying?
A: The break even price for a plain vanilla call option = Plain vanilla call option strike price +…
Q: Confidentiality agreements are different from covenants not to compete. a. True Ob. False
A: A statement has been given. We have to find if it's true.
Q: A business has 10 million ordinary shares that are currently quoted at £2.20 each. The business has…
A: We have to assess the impact of a dividend payout followed by equity issuance on the total value of…
Q: Managers of corporations need to act in an ethical manner O because ethical behavior is its own…
A: Managers of corporation are the representatives of the company or corporation. They must act…
Q: (IRR of an uneven cash flow stream) Microwave Oven Programming, Inc. is considering the construction…
A: IRR is the rate at which present value of cash inflows will be equal to initial cost.
Q: A real-estate developer seeks to determine the most economical height for a new office building,…
A: Present worth is computed by calculating and adding present value of cash flows associated with…
Q: Mr. Roxas pays monthly amortization of P54,100 for a parcel of land. The amortization factor for 5…
A: EMI or monthly mortgage payments are the fixed amount paid by the borrower to the lender that…
Q: Regine agrees to settle a P100,000 loan borrowed from provident by making monthly salary deduction…
A: Present value of annuity Annuity is a series of equal payment at equal interval over a specified…
Q: Mr. Samson hired the services of a broker to sell his property. The owner said he bought it at…
A: COST OF PURCHASE OF THE HOUSE = 6300000 REQUIRED GROSS PROFIT = 30% = 6300000*30% = 1890000…
Q: decided to reduce its level of debt. On this basis it has decided to undertake a rights issue to…
A: Right shares are issued to existing shareholders because this is very easy and cheap sources of…
Q: Answer following statements: a) IRR and NPV always lead to same decision in mutually exclusive…
A: Net Present Value (NPV) is the sum of the present value of all expected cash inflows and outflows.…
Q: Which of the following is likely to cause the largest Cash Outflow: Sale of a 30 Story Office…
A: Cash Outflow include all those activities that results in decline of cash due to purchase of some…
Q: You bought a call option at strike $ 60 for a price of $ 6 and sold a put option at strike $ 70 for…
A: We have a long position in call option and a short position in the put option. We need to find the…
Q: Which one of the following is a use of cash? Group of answer choices (A).payment to a supplier…
A: Solution:- Use of cash means outflow of cash by the firm.
Q: at is the initial value in part a ??
A: In forward and futures the price calculations are done based on the future cash flow from the stock…
Step by step
Solved in 2 steps
- 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?Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.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.
- Taos Productions bought a piece of equipment for $79,860 that will last for 5 years. The equipment will generate net operating cash flows of $20,000 per year and will have no salvage value at the end of its life. What is the internal rate of return?Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and provide the following cash flows over the next five years: $88,000, 92,000, $91,000, $72,000, and $71,000. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return in Excel, see Appendix C.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?
- Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?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?