Rate Of Return Essay

Part- A Answer- 1- Financial Report Based on the financial ratios given, this section will compare and contrast the financial strengths of Company X and Company Y in order to suggest Tringale Ltd to take decision regarding which of the above companies to chose for investment. This section provides comments on financial performance areas based on the data given, and presents report to the Board of Directors of Tringale Ltd by recommending which of the two investment opportunities is better. Comments

Unlevered ETF, Assume P=$100, r=10%, k=365 and t=1 year F=100(1+〖0.10/365)〗^(365×1)=$110.52 Thus, Return = $110.52-$100 = $10.52 ii. Triple-leveraged ETF, Assume P=$100, r=30%, k=365, t=1 year F=100(1+〖0.30/365)〗^(365×1)=$134.97 Thus, Return= $134.97-$100 = $34.97 According to the calculation above, assuming that the present value is 100, S&P 500 will have higher return on the triple- leveraged ETF than the unlevered ETF. This shows us that although sometimes the triple-leveraged

Chapter 8 Problem 6 The following are the historic returns for the Chelle Computer Company: Year Chelle Computer General Index Year chelle computer general index 1 37 15 2 9 13 3 -11 14 4 8 -9 5 11 12 6 4 9 Based on this information, compute the following: a. The correlation coefficient between Chelle Computer and the General Index. Answer : r= .1305 b. The standard deviation for the company and the index

Earning Before Interest and Tax Impact of Financing Options on Earnings Balance Sheet – Year 1 EVALUATION OF ALTERNATIVES Alternative 1 : 20-year mortgage Because of the fact that BHC is a new venture ; the risk is actually high. Mortgage rate appears to compensate for the risk.When BHC had acquired $2,275,000 with a mortgage. When we look at the interest coverage between 75 percent occupancy and 50 percent occupancy of mortgage financing, it is possible to say that at 50% earnings do not

contribute to positive share prices? Name Institution Literature Review Introduction Most successful companies across the world use Return on Assets and Return On Equity to ascertain their financial well-being. ROA is a way that the management uses to determine whether its use of organizational assets is generating targeted assets. More so, ROE which is the Return Of Equity is calculated by the net income as a percentage of shareholders equity (Damodaran, 2007) Both ROA and ROE are increasingly

highest return on investment C). 30 years 1) – (1.05)^5 x (1.10)^5 x (1.20)^20 = 78.802 2) – (1.10)^10 x (1.15)^20 = 42.451 3) – (1.12)^30 = 29.959 #1 has the highest return on investment P3-4) – You have a trust fund that will pay you $1 million exactly ten years from today. You want cash now, so you are considering an opportunity to sell the right to the trust fund to an investor. A). – What is the least you will sell your claim for if you could earn the following rates of return

000 23,000 26,000 25,000 24,000 27,000 Ending 22,000 21,000 24,000 22,000 23,000 26,000 25,000 24,000 27,000 30,000 Beta (X) Beta (Y) Risk Free Rate EMPR a. Calculate the annual rate of return for each asset in each of the 10 preceding years, and use those v the average annual return for each asset over the 10-year period. Return (X) Return (Y) 15.00% 2.27% 20.95% -1.25% 13.18% 20.00% 2.69% 4.00% 21.25% 19.26% 11.74% 7.50% 8.00% 13.50% 8.57% 13.81% 13.64% 9.13% 13.91% 13.75% 9.60% 11.14%

interest greater the return but there is a higher risk involved in investing in share market than in savings account due to market fluctuations. Advantages and disadvantages of investing in banks vs share market Shares offer dividend and capitals gains on investment and offer numerous benefits over a banks when it comes to investment opportunities. Due to equity price appreciation investing in shares normally offer higher return than Inflation rate whereas, commercial banks

was decided that for 50 basis points increase (average over a year) in the interest rates, the level of earnings change should not be more than 4%. Banc One also used a balancing portfolio for asset-liability management, which consisted of investments in conventional securities and derivatives with an underlying mandate to achieve a reasonable rate of return, fulfill short term liquidity needs, manage interest rate exposure, and maintain a modest regulatory capital obligation. Also, Banc One has recently

a dollar in the future is the basis for investments and business growth. The future value of a dollar is based on the present dollar amount, interest rate and time period involved. Financial calculators and tables can assist in computing the future and present values, which eases the pain of the mathematically challenged. Yield or rate of return can also be calculated. One financial application of the time value of money is buying or selling a house mortgage note. Although normally handled by