A "buy and hold" investor purchases a fixed-rate bond at a discount and holds it until it matures. Discuss the sources of return for the investor and mention the one that is least likely to contribute to the investor's return over the investment horizon, assuming all payments are made as scheduled?

What is the difference between the Pipe Business model and The Platform Business model? Can you name a example

Suppose that you have inherited an annuity that will pay $1000 for 50 years.

A) Assuming that the first payment occurs exactly one year from now and that the annual opportunity cost of capital is 10% , what is the value of this annuity today? Round your final answer to two decimals.

B) Assuming that the first payment occurs immediately and that the annual opportunity cost of capital is 10%, What is the value of this annuity today? Round your final answer to two decimals.

What's the difference between working capital and net working capital? Between net working capital and net operating working capital?

How do banks differ from other financial institutions? Critically explain the key functions of banks.

Daisy Hill Hospital is planning to replace its CT scan machine. The machine system costs approximately $2,500,000, and an additional $500,000 for installation. Estimated charges per scan is $600. There is an estimated weekly utilization (volume) of 30 scans. Each scan will cost the hospital $35 in supplies. The system is expected to operate for $50 weeks per year. Associated annual labor costs for purchasing the CT scan machine is an estimated $100,000. Maintenance costs are estimated to be $80,000, and the machine is expected to be in operation for a period of 5 years. The machine may sell for approximately $500,000 salvage value. Daisy Hill has an 8% corporate cost of capital, and inflation is expected to average 3% over the period.

A $18000 bond redeemable at par on October 25, 2016 is purchased on August 25, 2007. Interest is 7.9% payable semi-annually and the yield is 6.8% compounded semi-annually.

(a) What is the cash price?

(b) What is the accrued interest?

(c) What is the quoted price?

CITATIONS on 7PS

Please supply citations on problem 7PS

Subject is financial management

What can behavioural finance teach us about finance ?

i need unique answer please

In table 1.1 below, information on three stocks (X, Y and Z) in the next period is stated. The stocks are traded on a financial market, where the usual assumptions for a normal market are satisfied. It is assumed, that a risk-free asset is traded on the financial market as well, which has a return of 5% (rf) in the next period.

Problem: Determine the tangent portfolio of the three stocks (i.e. determine the weights that the three stocks have in the portfolio)
Hint 1: Recall, that the tangency portfolio (T) is given as the portfolio that has the largest Sharpe Ratio. To find T, you therefore have to write up the expression for Sharpe Ratio and maximize this in Excel or another program.
Hint 2: Recall (cf. formula 11.11), that the variance of a portfolio’s return is given by: Var( RP ~ )= ∑= N i 1 ∑= N j 1 xixjCov( ir ~ , j r ~ ) Where xi and xj denotes de respective portfolio weights, i,j = 1,2...N.

Whether economic, social and sustainability are interconnected and whether companies which recognize an interconnection in their strategy perform better than companies which do not.

The CFO of the supermarket chain Aldi is examining an investment in a new delivery service for internet orders. The initial investment of the project consists of a cash outflow of €700,000 for the following items: a) distribution fleet, b) computer servers, c) delivery packages, and d) other fixed assets. These assets will be fully depreciated for tax purposes over a 5-year period, which is the lifetime of the project, using the straight-line depreciation method. At the end of this project, the distribution fleet and computer servers can be sold for €60,000.

The revenue of the new service will be equal, for the first year, to 15% of the current total sales of the traditional service, which are €7.5 million. For the following years, the revenues of the new service will be 20%, 25%, 30%, and 35% respectively of the initial traditional sales. This new service for internet ordering is a premium service. Therefore, the prices of the home delivery goods will be 5% higher than the current supermarket prices.

It should be taken into account that the cost of goods sold represents 70% of the supermarket sales price. Aldi expects to spend each year 7% of the sales of the new service for advertising. The company already has the available warehouse capacity needed for this service. The service will occupy 10% of the warehouse. The warehouse is rented at an annual cost of €300,000. The wages for the project workers will be €150,000 per year, however, 20% of them are workers transferred from other Aldi businesses (the company has a lifetime job policy). The distribution costs (fuel, etc.) are 3% of sales of the new service.

The introduction of the new internet ordering service will have as a consequence the reduction of the traditional sales of the supermarket business. Sales in the traditional supermarket business are expected to decrease from €7.5 million a year to €7.4 million a year for the next five years.

Accounts payable are equal to 4% of cost of goods sold, inventory corresponds to 8% of cost of goods sold, and accounts receivables are 10% of sales. At the end of the internet sales project, all remaining net working capital would be liquidated, and the cash recovered. Aldi has profits from its current business, pays taxes of 25% and has a cost of capital equal to 10%

. You are required to:

a. Calculate the project’s profit after tax throughout its five-year cycle

b. What is the change in Net Working Capital for each year?

c. Calculate the project’s Net Cash Flows for each year

d. Evaluate the project according to its NPV, IRR, Profitability Index, and Payback Period

Pearl Asian Restaurant operates in the Hong Kong International Airport passenger terminal. It is about time for the restaurant to negotiation for a new lease for the coming year. The landlord offers the owner of the restaurant two options. The first option is a fixed lease with a rent of $97,500 per month. The second option is a variable lease with monthly rent to be paid at 18% of the revenue of the restaurant. The restaurant owner expects that the annual revenue would be $8,000,000 for the coming year.

To expand his business, the restaurant owner also considers of acquiring one of the following catering outlets in the airport. One is a bistro and the other is a cafe. The annual revenue of the bistro or the cafe is the same, i.e. $500,000 for the current year. The variable cost of the bistro is 40% of its revenue and its annual fixed cost is $200,000. The cafe has a variable cost of 35% of its revenue and an annual fixed cost of $225,000.

The restaurant owner thinks that if he purchases the bistro, he could reduce its variable cost to 32% of its revenue. If he purchases the cafe, he could save $30,000 a year on its fixed cost. In either case, he thinks he could raise the revenue by 40% in the coming year.

For the proposed new lease for the restaurant, answer the following questions:

(i)Calculate the ‘indifferent revenue level’ of the restaurant for the coming year.

(ii)Explain, with reasons, which lease option that the restaurant owner should take.

Question 1

Iris Corpo Bhd, a pioneer in trusted identification systems, the company designed the world’s first ePassport in 1988 and went to manufacture a variety of smart cards, biometric card readers and automatic gates, among others. It products are used in more than 30 countries. Despite all these achievements, Iris has been bleeding red ink in the past four years.

Source: Annual Reports 2017

Iris also involved in education sector- Stamford Group and Waste Management- Regal Energy. Iris also handed over tow affordable housing projects under Rimbunan Kaseh to Pahang and Melaka, which will help to reduce operating costs. Iris lost money for a few years. It was baffling. The trusted identification digital division was doing RM70 million to RM 80 million revenue consistently every year from 32 countries to date. Iris’ main competitor, registered a net profit of RM67.24 million form RM258.36 million in revenue.

President and managing director, Poh, who first surfaced in Iris in July 2017, acquired a 9.78% stake from the open market, and since raised his stake to about 16%. Other substantial shareholders include the Federal Land Development Authority with a 14.60% stake and Datuk Robin Tan, son of Berjaya’s Vincent Tan, who holds 8.33% stake.

It cash coffers expanded to RM96.71 million as at June 30. Its long-term borrowings stood at RM129.19 million, and it had short term debts of RM44.25 million and accumulated losses of RM 318.67 million.

At last Thursday’s close of 15.5 Sen, Iris share was less than a third of its peak of 61.5 sen in early 2014. There are 2.97 billion outstanding shares in Iris Berhad

Source: The Edge October 8, 2018, New Shareholders, New Lease of Life for Iris. .

1. Describe the strength and weaknesses of Iris financial performance.                [ 15 marks]
2. Based on the information in the case, do you think that Iris Berhad has taken care of their shareholders ?                                                                                                     [ 10 marks]       

Determine the tangency portfolio of the three stocks (i.e. determine the weights that the three stocks have in the portfolio: