Suppose that there are two independent economic factors, F₁ and F₂. The risk-free rate is 5%, and all stocks have independent firm-specific components with a standard deviation of 35%. Portfolios A and B are both well-diversified with the following properties:

What is the expected return-beta relationship in this economy? Calculate the risk-free rate, r_f, and the factor risk premiums, RP₁ and RP₂, to complete the equation below. (Do not round intermediate calculations. Round your answers to two decimal places.)

E(r_P) = r_f + (β_P1 × RP₁) + (β_P2 × RP₂)

Cost of debt using both methods​ (YTM and the approximation​ formula)   ​Currently, Warren Industries can sell 10-year​, $1,000​-par-value bonds paying annual interest at a 8​% coupon rate. Because current market rates for similar bonds are just under 8​%, Warren can sell its bonds for $990 ​each; Warren will incur flotation costs of ​$35 per bond. The firm is in the 27​% tax bracket.

a.  Find the net proceeds from the sale of the​ bond, N Subscript d.

b.  Calculate the​ bond's yield to maturity (YTM​) to estimate the​ before-tax and​ after-tax costs of debt.

c.  Use the approximation formula to estimate the​ before-tax and​ after-tax costs of debt.

Your company has been doing​ well, reaching $ 1.1 million in​ earnings, and is considering launching a new product. Designing the new product has already cost $ 510 comma 000. The company estimates that it will sell 792 comma 000 units per year for $ 2.98 per unit and variable​ non-labor costs will be $ 1.05 per unit. Production will end after year 3. New equipment costing $ 1.08 million will be required. The equipment will be depreciated using​ 100% bonus depreciation under the 2017 TCJA. You think the equipment will be obsolete at the end of year 3 and plan to scrap it. Your current level of working capital is $ 293 comma 000. The new product will require the working capital to increase to a level of $ 372 comma 000 ​immediately, then to $ 403 comma 000 in year​ 1, in year 2 the level will be $ 355 comma 000​, and finally in year 3 the level will return to $ 293 comma 000. Your tax rate is 21 %. The discount rate for this project is 10.4 %. Do the capital budgeting analysis for this project and calculate its NPV.

1) what is The capital budgeting analysis for this project ?

2) what is the NPV?

Determine the accumulated value of quarterly deposits which grow by $18 each quarter for 12 years, with a first payment of $310 one quarter from now, if the deposits earn 1.3%/year compounded quarterly.

Debby’s Dance Studios is considering the purchase of new sound equipment that will enhance the popularity of its aerobics dancing. The equipment will cost $24,400. Debby is not sure how many members the new equipment will attract, but she estimates that her increased annual cash flows for each of the next five years will have the following probability distribution. Debby’s cost of capital is 14 percent. Use Appendix D for an approximate answer but calculate your final answers using the formula and financial calculator methods.
  

  
  
b. What is the expected net present value? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
  

Net present value ____

Cooley Landscaping needs to borrow $32,000 for a new​ front-end dirt loader. The bank is willing to loan the money at 9% interest for the next 10 years with annual, semiannual, quarterly or monthly payments. What are the different payments that Cooley Landscaping could choose for these different payment​ plans? What is​ Cooley's payment for the loan at 9​% interest for the next 10 years with annual ​payments?

.You own a bond that pays $120 in annual​ interest with a $1,000 par value. It matures in 20 years. Your required rate of return is 11 percent.

a. Calculate the value of the bond.

b. How does the value change if your required rate of return​ (1) increases to 16 percent or​ (2) decreases to 6 ​percent?

c. Explain the implications of your answers in part (b​) as they relate to interest rate​ risk, premium​ bonds, and discount bonds.

d. Assume that the bond matures in 5 years instead of 20 years. Recompute your answers in part ​(b​).

e. Explain the implications of your answers in part ​(d​) as they relate to interest rate​ risk, premium​ bonds, and discount bonds.

Monthly loan payments  Personal Finance Problem   Tim Smith is shopping for a used luxury car. He has found one priced at $35,000.

The dealer has told Tim that if he can come up with a down payment of $5,700​,

the dealer will finance the balance of the price at a 77​% annual rate over 22 years

​(24 ​months).  ​(Hint: Use four decimal places for the monthly interest rate in all your​ calculations.)

a.  Assuming that Tim accepts the​ dealer's offer, what will his monthly​ (end-of-month) payment amount​ be?

b.  Use a financial calculator or spreadsheet to help you figure out what​ Tim's monthly payment would be if the dealer were willing to finance the balance of the car price at an annual rate of 3.1​%?

Please Post Excel Formulas ******

What is primary trade-off that results from factoring receivables, from the perspective of the organization that sells the A/R to the factoring company? min 200 words

A computer software development company in the U.S. exports its software to the euro zone. The company’s European distributor asks and the company agrees to receive payments in euros (€). The distributor has just ordered a shipment that is priced in euros at today’s dollar equivalent of $28,150,000 for delivery and settlement in three months. The U.S.-based company is particularly worried about a high degree of uncertainty surrounding the euro exchange rate against the dollar. It decides to consider whether to hedge. Consulting with a NY bank, the company is advised that there are four different ways it can accomplish the hedge: Through a forward contract, a futures contract, an option contract, and through a money market hedge. The following information is available:

Spot                                         $1.1260/€

3-month forward                       $1.1220/€

6-month forward                       $1.1360/€

3-month futures                        $1.1215/€

90-day call option #1                 $ 1.1280/€ strike; $ 0.0030/€ premium

90-day put option #1                 $ 1.1280/€ strike; $ 0.0050/€ premium

180-day call option #2               $ 1.1290/€ strike; $ 0.00820/€ premium

180-day put option #2                $ 1.1290/€ strike; $ 0.00980/€ premium

90-day dollar interest rate          4.40% per annum (deposit)        6.40% per annum (loan)

90-day euro interest rate            3.60% per annum (deposit)        5.60% per annum (loan)

1. Specify which hedging instruments (from the above list) you should look into.

KDV, Ltd., is a Canadian company. It can borrow or lend funds in
Canada at an interest rate of 3.82%. KDV, Ltd., also has operations
in Brazil where it can borrow or lend funds at an interest rate of
7.44%. The spot exchange rate between the Brazilian Real and the
Canadian Dollar is 4.1792 Brazilian Reals per Canadian Dollar. The
360-day forward exchange rate is 4.3594 Brazilian Reals per
Canadian Dollar. By borrowing 100,000.0000 of one currency, determine an
arbitrage that will make KDV a profit.

Questions:

1. Which country (1=Canada, 2= Brazil) would KDV borrow this money
to make this arbitrage profit?

2. When KDV converts this money to the other country?s currency,
how much of this other country?s currency would KDV receive?
3. Units for #2's answer: (1 = Canadian $s, 2 Brazilian Reals)

4. Should KDV buy or sell a 360-day forward contract at time 0?
(1 = buy, 2 = sell)

5. For how many Canadian $s should KDV?s forward contract be for?

6. KDV should then lend this money in this other country. In one
year, how much will KDV receive from the loan they made?
7. Units for #6's answer: (1 = Canadian $s, 2 Brazilian Reals)

8. In one year, after KDV receives their loan plus interest, when
KDV converts these proceeds to the original country?s currency,
how much of the original country?s currency will KDV receive?
9. Units for #8's answer: (1 = Canadian $s, 2 Brazilian Reals)

10. In one year, how much will KDV have to pay for principal and
interest on the funds they borrowed?
11. Units for #10's answer: (1 = Canadian $s, 2 Brazilian Reals)

12. Arbitrage Profit = ???? amount
13. Units for #12's answer: (1 = Canadian $s, 2 Brazilian Reals)

Your firm will issue 10-year bonds to raise $10 million. You will either (a) issue regular coupon bonds which have a 6% coupon rate and make annual payments or (b) issue zero coupon bonds which make annual payments. Both options will have a YTM of 8%. What is your firm’s total repayment 10 years from now if they went with option (a)?

I got 12244060, I want to see if this correct. Thank you

Problem 12-02
AFN equation

Broussard Skateboard's sales are expected to increase by 20% from $7.8 million in 2016 to $9.36 million in 2017. Its assets totaled $4 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 3%, and the forecasted payout ratio is 60%. What would be the additional funds needed? Do not round intermediate calculations. Round your answer to the nearest dollar.
$

After starting your first full-time job out of college, you decide to buy a new car for $12,000. Using Excel, create a complete amortization table for this car-loan: You make 36 equal end- of- month payments. The discount rate is 7.25% compounded monthly. How much would you owe after the 15th payment is made?

How can you explain the Sub-prime mortgage by the twin- deficit? Include 4 graphs regarding the personal saving, national saving, budget deficit, and investment in your answer.