Your firm is contemplating the purchase of a new $615,000 computer-based order entry system. The system will be depreciated straight-line to zero over its five-year life. It will be worth $67,000 at the end of that time. You will save $245,000 before taxes per year in order processing costs, and you will be able to reduce working capital by $82,000 (this is a one-time reduction). If the tax rate is 22 percent, what is the IRR for this project?

Q: Calculate the Net Investment of this project, Calculate the Net Cash Flows for the five (5)…

A: Net Present Value: It is a measure of profitability used in capital budgeting to determine the…

Q: You want to buy a new car after your graduation. The price of the car is $20,000. The car dealer…

A: Monthly Payment  = P * r * [{(1+r)n }/{1+r)n -1}] where P = Prinicipal borrowed = Car price - down…

Q: George and Mary Keys are very excited over the news that they are to be parents. Since their…

A: A contract for insurance provides protection from losses resulting from particular calamities or…

Q: You, as a real estate agent, sell a property for $225,000.

A: Sale Price: $2,25,000 Commission Rate = 6% Real Estate Agent Commission:

Q: Elaborate further on the settlement of a future contract based on the numbers in the diagram. (1)…

A: We have to explain and elaborate the settlement process evident in the diagram.

Q: A Zambian company has a bond outstanding that sells for 87 percent of its K100,000 par value. The…

A: As per Bartleby guidelines, If multiple questions are posted, only the first 1 question will be…

Q: A man decided to buy a brand new car. The car's cash price is P 2M. There is an option for…

A: Periodical Payment - It includes a portion of principle payment along with Interest. Finance is…

Q: You recently paid $13,275 for an investment that promises to pay $675 at the end of each of the next…

A: Given: The amount paid for the investment is $13,275 and the annual receipts from investment is $675…

Q: On the basis of the financial information given in this case, complete the WACC table that is…

A: The Weighted Average Cost of Capital: The weighted average cost of capital is a single, composite…

Q: In 2021, a standard 30-year fixed mortgage in the US could be had for somewhere around 3%. Following…

A: Data given: Option I Rate=3% Cost of house=$629,000 n=30 years Down payment= 20%   Option II Rate=7%…

Q: Total assets of 689400. Long term debit of 198375, total equity of 364.182, net fixed assets of…

A: Current Ratio: The current ratio contrasts the total current assets and liabilities of a business.…

Q: How do you Estimate and report the Fama-French 5-factor estimated equation in the program called…

A: E-views is a statistical programme that economists, scientists, and analysts frequently use for…

Q: When the Australian government issues government bonds during a tender, the cumulative…

A: Bidding information are available. From the order book, we have to find the cut off yield.

Q: Remember from class that YTM - Riskfree = sum of rilk premiums. Assume the risk-free rate is 1.924…

A: Risk free rate = 1.924 Credit risk premium = 1.260 Maturity perium = 1.218

Q: If a coupon bond is issued at 13% coupon rate, has a par value of $1,000 with the required rate of…

A: Coupon rate = 0.13 or 13% Required rate = 0.10 or 10% Par value = $1000     When the coupon rate is…

Q: You've collected the following information from your favorite financial website. 52-Week Price Lo…

A: Dividend Growth Model: a strategy based on the belief that dividend growth will always be in…

Q: You can enter into a forward contract for a bond with a maturity in one year months that pays a…

A: We have spot rates, periodic coupon and interest rates. The same can be used to theoretically derive…

Q: The sum P350,000 will be needed at the end of 3 years. If money can be invested at 5% compounded…

A: We need to fist determine the semi annual end of period payment that will accumulate to the desired…

Q: You are trying to plan your investments for the next year. You have decided that the market will…

A: Stock market refer to the market where the exchange of the several shares of securities of…

Q: Period 1: June 1, 2021, to June 7, 2021: On June 4, 2021, Hardcore LLC sold 20% of its 50% holding…

A: From June 1 - June 7 OTC i.e. Over The Counter transaction took place which is trading outside the…

Q: Janlea Co. had total net earnings of $158,600 this past year and paid out 60 percent of those…

A: Required return = (D1/ Current market price)+Growth rate D1 = Dividend per share Dividend per share…

Q: Suppose the European C80 (100) = 30 suddenly becomes an American option. Are there arbitrage…

A: Arbitrage is the simultaneous buying and selling of an item in separate marketplaces in order to…

Q: Current exchange rate (Feb 15, 2018) is .0090 $/Yen. You speculate the exchange rate will be .0087…

A: The currency, which is going to be appreciated, should be short sold. In the given case, the current…

Q: If you were in early 2021with the once-in-a-generation low interest rate environment, and the rates…

A: There are three possible options to mortgage. We have to choose the one that is best suited to us.

Q: What is the real interest rate if the nominal interest rate is 3% and inflation is 2%?

A: Inflation rate will be the part of real interest rate. Inflation rate means increase in prices which…

Q: Fancy Paws' year-end price on its common stock is $20. The firm has a profit margin of 12 percent,…

A: The price-earnings ratio, sometimes referred to as the P/E ratio, P/E, or PER, measures the…

Q: Being in an industry with perfect competition VS Being in an oligopolistic industry Market Risk -…

A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…

Q: Problem 2 Consider the yield curve above. Suppose the (expected) one-year interest rates in periods…

A: The profits on your assets can be significantly impacted by the yield curve, which is a tool for…

Q: A portfolio invests in 35% in a stock S1 and the rest in another stock S2. The expected return and…

A: Portfolio refers to a combination or collection of financial instruments or securities stocks,…

Q: The stated interest rate on your account is 8%, interest compounded monthly. If you deposit $50 each…

A: Future Value Annuity is the technique of determining the furure value of a series of regular…

Q: Critically evaluate how hearding  influences investment decision-making.

A: Herding behaviour will be reflective of behavioural bias in which the market participants are…

Q: (1) Established companies tend to grow their panel of banks over time to need its expanding banking…

A: We have two statements. We need to argue if they are individually true or false.

Q: Rebalancing of an index will occur most frequently for a(n):   Price-weighted index. Equal-weighted…

A: A Stock market index is used as a barometer of market behaviour. It reflects price movements of…

Q: Lean systems require large batch sizes to gain economies of scale.       Question content area…

A: Lean system are designed to produce output with fewer resources than traditional planning.…

Q: Dingo Corp is planning to pay out an annual dividend of $7 in perpetuity starting 8 years from now.…

A: Annual dividend (D) = $7 Required return = 0.052 or 5.2   First we will calculate effective annual…

Q: Charles Wilson borrowed $15,550 from a bank for three years. If the quoted rate (APR) is 7.00…

A: The effective annual rate is the interest rate that an investment provides after the effects of…

Q: What is the maximum amount an investor should pay for a 25-year bond with a $20,000 face value and…

A: Given: Particulars Amount Face value (FV) $20,000 Years 25 Coupon rate 8% Interest rate…

Q: An important application of compound interest involves amortized loans. Some common types of…

A: Amortization of loan means the repayment process in which the principal amount and the interest on…

Q: Please answer question 2 & 3 after reading the scenario thank you. Question at the end Stephanie…

A: Dividend discount model with fixed growth in dividends With required rate of return (r), current…

Q: A firm's target capital structure is as follows: Debt 35% Preferred Stock 15% Common Stock 50% The…

A: Given: Particulars Debt Common stock Preferred stock Weight 35% 50% 15% Face value $1,000…

Q: 4.Hassan plans to retire 40 years from now, he wants to have AED 4.5 million. Hassan thinks he can…

A: Information Provided: Future value = 4,500,000 Interest rate = 10% Period from today till future…

Q: Assume you deposit $700 every three months at a 6 percent annual rate, compounded quarterly. How…

A: Information Provided: Quarterly deposit = $700 Interest rate (APR) = 6% compounded quarterly Period…

Q: Everybody’s Fitness's 2021 income statement is reported below (in millions of dollars) (Use…

A: 1) Tax liability Maximum interest allowed  = EBITDA * 30% = 1190 Million * 30% = 357   Tax Liability…

Q: Which of the following statements is correct? Financial institutions perform complex asset…

A: Asset transformation-It is a process of transforming bank liabilities, usually mobilized funds like…

Q: Suppose that 10-month interest rates in Canada and Europe are 3.2% and 1.3%, respectively. In…

A: We have to decide on the arbitrage action for the euro. Spot rate and interest rates are available.…

Q: A company would like to have $400,000 in 6 years. How much should be invested semiannually into an…

A: Information Provided: Future value = $400,000 Period = 6 years Interest rate = 3.6% compounded…

Q: The price of a condominium is $81,000. The bank requires a 5% down payment and one point at the time…

A: Price of Condominium = $81,000 Down Payment = 5% Time Period = 30 Years Interest Rate = 6.5%

Q: + nt card has a balance of $5400 and an annual interest rate of 1 there are no further purchases…

A: Loans are paid by the equal monthly payments and these payments carry the payment for interest and…

Q: In order to qualify for a $100,000 fully amortizing mortgage loan with a 15 year term, the borrower…

A: We have to find the buydown payment that will help the borrower keep the monthly mortgage payment…