Financial Forecasting Assumptions – Financial forecasting projects a firm’s future financial needs. There are various methods used for forecasting. Discuss the various forecasting methods and the assumption that underlie each method.

Q: You may attempt this question 3 more times for cre Financial analysts have estimated the returns on…

A: The returns from a stock or returns from the market is not always same. It varies as per the…

Q: If I invest P10,387 today and expect a reimbursement every 6 months with a rate of 11.54% compounded…

A: Total Investment = P10,387 Interest Rate = 11.54% Compounded Semi-Annually = 2 Total no. of years =…

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A: Accounting rate of return =  Annual Income ÷ average investment.   Average investment ( if salvage…

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A: To calculate the project's internal rate of return (IRR), we need to find the discount rate that…

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A: FV  = A * (1+r) n where , FV = future value A = Amount invested r = interest rate n =time period.

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A: Quantitative performance objectives for agencies and departments is a feature that distinguishes a…

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A: Systematic risk refers to the type of risk which has an impact on the entire market. Also known as…

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A: To calculate the amount of money you will have after five years and the amount of interest earned,…

Q: You deposit $3,000 at the beginning of every year for 30 years into an investment that earns 8.5%.…

A: Periodic deposit, A = $3,000  Interest rate, r = 8.5%  Period, n = 30 years    The future value of…

Q: Working Capital Current Ratio Quick Ratio / Acid Test Ratio Cash Ratio 2019 48, 250,000 1.69 1.35…

A: Introduction: Working Capital-It is the difference between a company's current assets and its…

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A: Several statements have been given as a difference between ETFs and Mutual Funds. We have to find…

Q: The common stock for the Kingsford Corporation sells for $58 a share. last year the firm paid a…

A: Price of stock = p = $58 Current dividend = d0 = $4 Growth rate = g = 4%

Q: An index consists of the following securities and has an index divisor of 3.0. What is the…

A: Index divisor = 3 Index Stock Shares Outstanding Beginning Share Price Ending Share Price D…

Q: Which of the following statements is the intended goal or outcome of a performance budget?…

A: Introduction: Performance based budget are outcome oriented i.e., it involves setting targets to…

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A: Here, Spot price = $1.98 Forward price = $2.01 U.S. Interest rate = 5% To Find: One-year British…

Q: Price (£) 110 110 90 90 Production (tons) 2.5 1.8 2 1.5

A: To design a hedging strategy that minimizes the variance of the farmer's revenue in September, we…

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A: Earning per share=$3.50 Anticipated growth rate (g)=8% Yield rate (r)=10% Payout ratio =40% The…

Q: When we look at GAAP are corporations required by GAAP to have an accrual or cash basis of…

A: According to Generally Accepted Accounting Principles (GAAP), corporations are required to use the…

Q: 16. How much would you pay for the right to receive $28,750 at the end of 10 years if you can earn…

A: Future value = fv = $28,750 Time = t = 10 years Interest rate = r = 5%

Q: Finance How to solve without Excel? A project has an initial cash outflow of $42,600 and produces…

A: Year        (A ) Cash Flow     ( B ) 0  $ -42,600.00 1  $  17,680.00 2  $  19,920.00 3  $…

Q: Machine X has an intial cost of $10,000. It is expected to last 12 years, to cost $200 per year to…

A: Equivalent Annual Cost (EAC) is often used for capital budgeting decision and is the annual cost of…

Q: IZAX, Co. had the following items on its balance sheet at the beginning of the year: Liabilities and…

A: Net income = $20,200  Dividend = $4,800    The return on assets is  ROA=Net incomeTotal…

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A: First, let's calculate the return on a 6-month U.K. treasury bill (TB) using the given interest rate…

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A: In case of a fixed rate mortgage the interest rate remains the same throughout the term of the…

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A: When the stock goes ex-dividend, its share price reduces by the dividend amount. So, share price…

Q: Finance Asset management helps purchasing managers and accounting analysts as well as technical…

A: Asset management means the management of financial assets like stocks, bonds, real estate and other…

Q: Bonita Industries’s degree of operating leverage is 2.0. Warren Corporation’s degree of operating…

A: The degree of operating leverage measures how much the operating income changes in response to a…

Q: Give typing answer with explanation and conclusion Consider the following two banks: • Bank A has…

A: To calculate the change in the values of the assets and liabilities for each bank given an expected…

Q: Dowling Sportwear is considering building a new factory to produce baseball bats. The project will…

A: Initial Investment = $8,000,000 Cash flow = cf = $2,000,000 Time = t = 6 years Discount rate = r =…

Q: What is the yield-to-maturity of a 4-year, 1000 USD 10% coupon bond that makes semi-annual coupon…

A: To calculate the yield-to-maturity (YTM) of the bond, we need to find the interest rate that makes…

Q: The values of Treasury bonds can change widely with changes in interest rates.     True   False

A: Treasury bonds are long-term debt securities issued by the U.S. Department of the Treasury to…

Q: Suppose the farmer takes a futures position on his expected production of wheat in September. Will…

A: To determine whether the farmer's futures position will help him reduce his risk, we need to compare…

Q: What is Bank A's ROA based on Figure 1 Balance Sheet ($ in Millions): Assets   Liability and Equity…

A: Return on total assets(ROA) measures the overall effectiveness of management in generating profits…

Q: Financial analysts have estimated the returns on shares of Drucker Corporation and the overall…

A: Particulars Drucker's  return Market's return Recession  -20% -11% Moderate growth 11% 9% Boom…

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A: Risk Shifting: Risk shifting is a strategy used by companies to transfer or shift the risk…

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A: To determine if an arbitrage opportunity exists, we need to compare the spot rate and the forward…

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A: NPV refers to the Net present value, one of the technique of capital budgeting in which net…

Q: Sini a famous painting was sold in 1945 for 21,630. in 1988 the painting was sold for 30.8 million.…

A: Present value = pv = 21,630 Future value = fv = 30,800,000 Time = t = 43 years  (1988-1945)…

Q: A $1,000 10% ten-year bond has semiannual coupons. It is purchased new at $880 and is redeemable at…

A: ytm = Interest + RV - NPnRV +NP2 * 100 where , ytm = effective yield rate per coupon period.…

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A: Bonds are debt securities issued by Government or other companies, who seek to raise money from…

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A: To hedge a short position in a 5-year zero-coupon bond, we would need to create a portfolio of…

Q: Which of the following is true regarding preferred stock, common stock & debt? Preferred stock pays…

A: The answers are given below

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A: To calculate the Modified Internal Rate of Return (MIRR) for this project, we need to find the…

Q: You bought a 10-year US bullet bond for $990 with a coupon rate of 4.3%/year. A) Is the market rate…

A: A)  To determine whether the market rate is higher or lower than the bond's coupon rate of 4.3%, we…

Q: An investment company pays 7% compounded semi annually. You want to have 14,000 in the future. How…

A: The idea of the time value of money (TVM) holds that a quantity of income is valued currently more…

Q: A given project requires a $22,291 investment and is expected to generate end of period annual cash…

A: Initial Investment = $22,291 Cash flow for year 1 = cf1 = $12,000 Cash flow for year 2 = cf2 = $8000…

Q: Jumbo Corp. is experiencing rapid growth. Dividends are expected to grow at 30 percent per year…

A: As per the given information: Growth in dividends - 30% per year during the next three yearsGrowth…