Which of the following statements is / are TRUE about the payback period method of investment appraisal? (i) It uses discounted profits (ii) It may result in a project with a negative NPV being accepted (iii) It looks at the whole life of the project (iv) It favours lower risk projects (on the basis that risk is time related) a   (i) and (iii) b   (i) and (iv) c   (ii) and (iv) d   (ii) and (iii)

Q: Find the amount at the end of 2 years and 6 months if P2,000 is invested at 71% compounded quarterly...

A: Invested amount (X) = P 2000 n = 2 years 6 months = 10 quarters r = 71% per annum = 17.75% per quart...

Q: (Refer to this word problem for items #1-6) Determine the exact and ordinary interest on P15,800 at ...

A: Exact Interest - Under exact interest calculation 365 days is considered in one year. Interest Can b...

Q: Year 25 20 15 20 15 Project A Project The discount rate is 10% Aner the following questions (you HAV...

A: Here, Discount Rate is 10%

Q: The risk-free rate is 3% and you believe that the S&P 500's excess return (market risk premium) will...

A: Risk free rate = 3% Market risk premium = 10% Beta = 1.2    

Q: 2. Suppose you bought a condo for $200,000 financing it with a $40,000 down payment of your own fund...

A: 1. Calculation of Return on Assets (ROA) as follows: Cost of Condo = $200,000 Down payment = $40,000...

Q: What is the net cash flow in Year 2?

A: Net Cash Flow: It represents the difference between a firm's cash inflow and cash outflow for a giv...

Q: The entity has several high-cost.non-profitgenerating assets. It also has:avcost of debt and equity ...

A: Role of a financial manager: The role of a financial manager is to create and execute a financial po...

Q: An investment promises two payments of $1000, on dates 60 and 90 days from today. What price will an...

A: Data given:: First payment on 60 days from today = $1000 Second payment  on 90 days from today = $10...

Q: 1. An annuity and an annuity due that have the same number of payments also have the same present va...

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

Q: A market rate of discount for a single payment to be made in the future is a forward rate.   Selec...

A: Forward rate is the rate which is decided today at today prevailing price but for future period. gen...

Q: Which of the following best describe the flow of funds in a financial market? * a. suppliers of fund...

A: A financial market is any marketplace where finances can be obtained or financial instruments can be...

Q: For each of the following annuities, calculate the annual cash flow. intermediate calculations and r...

A: Answer -    Part 1 - Annual Cashflow = Present Value / (PVIFA i ,n) = 33,100 / (PVIFA  10% , 6) = 33...

Q: Friendly's Quick Loans, Inc., offers you $8.25 today but you must repay $10.45 when you get your pay...

A: Given: Particulars Amount Present value $8.25 Future value $10.45

Q: Assume that you are considering the purchase of a 20-year, noncallable bond with an annual coupon ra...

A: Present Value can be calculated using PV function in excel   PV (rate, nper, pmt, [Fv], [type]) Rat...

Q: Belinda invested a sum of money for her two-year-old child education in the amount of fifty thousand...

A: Compounding is a strategy for calculating the future value (FV) of current cashflows using a mention...

Q: A 10-year bond with a 7% annual coupon has a yield to maturity of 8%. Which of the following stateme...

A: When yield to maturity is higher than the stated rate of interest, the bond will be issued at discou...

Q: YIELD CURVES Plots interest rates on different securities of similar default risk for a given day Us...

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

Q: Local Co. has sales of $10.7 million and cost of sales of $6.4 million. Its selling, general and adm...

A: Answer-  First three subparts solved.  Part a) Calculation of Gross Margin -  GIven, Sales = $10.70 ...

Q: Mr. Santos started to deposit Php 3,500 monthly in his online bank that pays 5% compounded quarterly...

A: Interest rate = 5% quarterly compounded We need to find the monthly interest rate as the deposits ar...

Q: (Bond valuation) You are examining three bonds with a par value of $1,000 (you receive $1,000 at mat...

A: Value of a bond: Value of a bond is the present value of the future cash flows discounted at a requi...

Q: Both of Firm A and Firm B are 100 equity firms. You estimate that the incremental value of the acqui...

A: Merger is the concept of two or more company combined together and form a new company or one company...

Q: QUESTION 14 Panama has a fixed exchange rate with the U.S dollar. The exchange rate is 1.0. Suppose ...

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

Q: . How much will you have at the end of the 26 years? (Do not round intermediate calculations and rou...

A: Future Worth: It represents the future value of present periodic annuity payments or the future valu...

Q: A man bought a lot worth P1.4M if paid in cash. On the installment basis, he paid a down payment of ...

A: It is related to the concept of time value of money. The concept says that the certain sum of money ...

Q: Describe why financial management within an organization is such a difficult task and importance of ...

A: Financial management (FM) means managing all the activities which are related to funds like financin...

Q: ardware Co. is estimating its optimal capital structure. Hardware Co. has a capital structure that c...

A: Equity = 80% Debt = 20% Tax rate = 40% Risk free rate = 6%  Market return = 11% Cost of equity = 12%...

Q: 4. (Present value of an ordinary annuity) What is the present value of the following annuities? c. $...

A: c) Annual payment (A) = $280 n = 7 years r = 6%

Q: 4. Sovereign-Tea Company projected to make even monthly cash payments of P150,000 during the year. T...

A: Total annual payments (T) = P 150000 * 12 = P 1800000 Fixed cost (F) = P 250 r = 8%

Q: A gasoline engine is available on instalment basis with a down payment of ₱ 11,100 and ₱ 18,070 at t...

A: Down payment (D) = P 11100 Monthly payment (M) = P 18070 n = 12 payments r = 6.4% per annum = 0.5333...

Q: Aloha would like to take a vacation to the Caribbean Islands in 3 years. She invests $2,500 in a sav...

A: The amount available for vacation can be calculated with the help of future value function

Q: Finance Applications. Refer to the PI Mortgages Example in the book about a firm that provides mortg...

A: Portfolio return The portfolio return is the weighted average of returns of the securities, held in ...

Q: Copy of Find the amount at the end of 3 years and 10 months if P3,000 is invested at 89% compounded ...

A: The worth of a present asset at some point in the future based on a projected growth rate is referre...

Q: If you deposit $100 in an account earning 6%, how much would you have in the account after 1 year?

A: We are provided with a single lump sum deposit and we are now required to determine the future value...

Q: After seeing its neighboring village obtain a new water tower, the city board of East Dubuque begins...

A: Time Period = 20 Years Interest rate = 9% compounded daily Future Value = $1,750,000

Q: The degree of operating leverage (DOL) is ___

A: Degree of Operating Leverage: It measures the change in the operating income in response to the cha...

Q: Use PMT = to determine the regular payment amount, rounded to the nearest cent. The cost of a home i...

A: Cost of House is $110,000 Time period is 20 years or 20×12=240 months Interest rate is 3%  Monthly i...

Q: Magnesium Corporation has a policy of retaining 75% of its income. The growth rate of the company re...

A: " Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first thr...

Q: An investor must decide between two alternative investments—stocks and bonds. The return for each in...

A: A stock (sometimes called equity) is a financial instrument that represents the ownership of a corpo...

Q: 0,000. If the firm follows a maturity matching or moderate working capital financing policy, what is...

A: Working capital finance policy is concerned with both the sources and quantity of working capital th...

Q: QUESTION 38 Time affects liquidity through a. cash flows. b. opportunity costs. c. uncertainty and r...

A: Liquidity of an asset is important and the liquidity of an asset also affects the worth of an asset....

Q: Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current yea...

A: Sales revenue= $470,000 Cost of goods sold= $450,000 Operating expenses= $55,000 Long-term capital g...

Q: Suppose you want to buy a $150,000 home. You found a bank that offers a 30-year loan at 4.1% APR. Wh...

A: Cost of House is $150,000 Time period is 30 years and 25 years. APR is 4.1% To Find: Monthly paymen...

Q: The Paulson Company's year-end balance sheet is shown below. Its cost of common equity is 18%, its b...

A: To Find: WACC

Q: Consider the 20-year fixed-rate home loan of $185,500 with an interest rate of 6.75%. What is the mo...

A: Payment per period can be calculated using PMT function in excel.   PMT(rate, nper, pv, [fv], [type]...

Q: ash $ 29,000,000 Common stock ($60 par; 1,500,000 shares outstanding)   90,000,000 Additional paid-i...

A: Dividend is the distribution of earning, dividend can be distributed in two ways Cash Dividend Stoc...

Q: . Explain what is meant by: a. Cost of debt b. Cost of preferred stock C. Cost of equity

A: Cost of Debt: It refers to the effective rate of return paid by the company on its debt like bonds, ...

Q: 0123 45 181 An investor is considering a business opportunity with the anticipated re- ceipts and di...

A: The net cash flow can be calculated by taking the difference between the cash disbursement and cash ...

Q: A BBB-rated corporate bond has a yield to maturity of 13.6%. A U.S. Treasury security has a yield to...

A: a. Let's assume the face value of the Treasury bond is $1. Determine the price of Treasury bond (as ...

Q: An investment opportunity requires an initial cash outlay of £30,000. Cash flows are expected to be ...

A: Year cashflow pvf 9% Pv 1 (7000) 0.917 (6419) 2 (2000) 0.842 (1684) 3 13000 0.772 10036 4 36...

Q: Can an investor eliminate market risk from a common stock portfolio?

A: There are two types of Risk 1. Systematic  Risk:- These are risk pertains to Industry as a whole not...

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.