transaction

Q: If an account earns 4% simple interest per year, how many years will it take $1 to grow to $3?

A: Formula used for calculating no. of years is:

Q: Suppose that the index model for stocks A and B is estimated from excess returns with the following ...

A: The mathematical equation for correlation computation is:

Q: Project 1 requires an initial investment on $50,000 and has an internal rate of return (IRR) of 18%....

A: The internal rate of return is  measures of a project's attractiveness and profitability. The intern...

Q: St. Thomas Company is planning to issue $1,000 par value bonds.  The bonds will have a coupon rate o...

A: A financial instrument with a fixed cost that helps a company to raise funds for business operations...

Q: Having trouble with Black-Scholes regarding the question below of finding the Call Value...

A: Call option Valuation using Black- scholes  model Facts Stock price   = 54 Exercise price = 63 Rate ...

Q: A $100 bond with annual coupons at 5% for the first 10 years and coupons at 4% for the next 5 years ...

A: Working note:

Q: Suppose that, for an engineering project, the optimistic, most likely, and pessimistic estimates are...

A: Annual worth refers to the power of a project to generate cash during the period of a single year. I...

Q: How much will you need to save per month to have $200,000 after 12 years, if your account earns 5% i...

A: The formula used as follows: Future value of annuity=Payment×1+rn-1r

Q: Veloo has just bought the common stock of XYZ company. The company expects to grow at the following ...

A: Expected dividend year 1 = Dividend year 0 * (1+g1) Expected dividend year 2 = Dividend year 1 * (1+...

Q: Need help with a breakdown of the proper steps for both questions...  Thank you in advance!

A: Here, S0 is 100 X is 110 1+r is 1.1 Therefore , r is 10% Possibilities of ST are 130 and 30 Range of...

Q: he President of Tesla was really impressed by your analysis on market reactions and wants more (of c...

A: Information provided: Year Cash Inflow Cash Outflow 1 25M 100M 2 7M 10M 3 2M 10M 4 2M 10M...

Q: On January 1, 20x1, MamaMia Co. acquired 12%, P4,000,000 bonds at 98. Commission paid to brokers amo...

A: The effective rate of interest is the rate that makes the present value of all the remaining cash fl...

Q: Why do firms pay dividends? International evidence on the determinants of dividend policy.

A: Dividend means part of profit. Ordinary shares holders get dividend as a return. Payment of dividend...

Q: The wholesale cost of a birdcage is $55. The original markup was 46% based on selling price. Find th...

A: Selling Price = Cost + 46% of Selling Price  

Q: Question 2

A: operating cash flow is cashflow available from operations of the company 

Q: The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. ...

A: Net present value is the net worth of a project in current terms. It is a major decision-making tool...

Q: In November 2017, Treasury 4¾s of 2041 offered a semiannuallycompounded yield to maturity of 2.6%. R...

A: Formula to calculate the bond price is Price = Int*{1/rd - 1/rd(1+rd)^N} + [M/(1+rd)^N] Where rd is ...

Q: Vicking Manufacturing Company is evaluating expanding their manufacturing facility. The expansion wo...

A: ROI is a measure that computes the efficiency of an investment project. It compares the actual or ex...

Q: A sum of money invested at 2% per 6-month period (semiannually) will double in amount in approximate...

A: The worth of today’s dollar at a future date is the future value of the dollar. For example, the val...

Q: Develop an amortization schedule for the loan described. (All answers should be entered in dollars. ...

A: A loan amortization schedule is a schedule of payments to be made for repaying the loan. A loan amor...

Q: $9,000 is borrowed for 120 days at a 5% interest rate. Calculate the maturity value by the exact met...

A: The conceptual formula used is: EXACT METHOD ORDINARY METHOD

Q: Finance Question

A: Journal records all the transactions of the entity which will then be used by the auditors and manag...

Q: Amazing Manufacturing, Inc., has been considering the purchase of a new manufacturing facility for $...

A: Cash flows are the cash generated from the operation of the business organisation. In other words, t...

Q: Jacob is a participant in JJ’s defined benefit plan. Jacob is 37 years old and earns $160,000. He ha...

A: Given: The fifteen equal owners all are eligible for 70% of the accrued benefits. Each one of of the...

Q: A stock has had the following year-end prices and dividends:  Year Price Dividend 1 $ 64.43    ...

A: Calculation of arithmetic and geometric mean: Excel workings:

Q: Pick a discretionary expense that you incur on a regular basis, such as buying premium coffees daily...

A: Amount of the present cash flows when multiplied by the given interest rate (taking time value of do...

Q: If an insurance company sells a 150,000 life insurance policy for 600 premium per year and the proba...

A: The expected value of the product is to be calculated by predicting the gain or loss earned or incur...

Q: You bought a stock for $39 and you received dividends of $4. The stock is now selling for $47. What ...

A: Return on any asset can be computed by the net inflow of cash from the asset dividend by the purchas...

Q: Perform a spreadsheet-based AW evaluation of the three proposals shown. Note that the lives vary fro...

A: AW Analysis The equivalent uniform AW of all the income as well as the disbursement costs during the...

Q: Solar Energy is currently examining a project that will produce cash inflows of $21,405 a year for t...

A: Profitability index: It is the ratio of the present value of cash inflow to present value of initial...

Q: An air purifier for use in manufacturing semiconductors is placed in servicewith a first cost of $50...

A: MARCS 5- year table used for computation SLM method used for computation

Q: Lou Hoskins and Shirley Crothers are organizing Red Lodge Metals Unlimited Inc. to undertake a high-...

A: There are two types of stock which a firm can issue. One is the equity stock and other is preferred ...

Q: Suppose a firm calculates its external funding needs and finds that it is negative. What are the fir...

A: Companies can raise finance either by external funding or internal funding. Companies can raise fina...

Q: Chapter 11, Question 3

A: ACCORDING TO CAPM MODEL: KE=RF+BETA×RM-RF REARRANGING FOR BETA: BETA=KE-RFRM - RF

Q: A lump-sum loan of $5,000 is needed by Chandra to pay for college expenses. She has obtained small c...

A: Interest on the loan is the excess money paid along with the principal every year or in a lump sum w...

Q: A store is offering to sell an item for $1,900 and loan you the money.  The loan calls for equal mon...

A: Given: Amount borrowed = $1,900 Interest rate = 9.9% Number of years = 4

Q: A company has two investment opportunities. Alternative 1 (Alt. 1) pays $10,000 (inflow) two years f...

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM (tim...

Q: The pawn shop adds 2 percent to loan balances for every two weeks a loan is outstanding. What is the...

A: Given. Pawn Shops Adds  2%   to loan balances for every two weeks here interest is adding to the out...

Q: In the design of a special-use structure, two mutually exclusive alternativesare under consideration...

A: Given:

Q: The heat loss through the exterior walls of a processing plant is expected to cost the owner $3000 n...

A: Rate of return is calculated in a case where NPV = 0 Rate of return is usually calculated on trail &...

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.