NBCUniversal Media has a bond outstanding that matures in 22 years. If its market price is $1,153.87 and it yields 3.64%, what is the bond's coupon rate? Step by step answer pls.
In: Finance
P12-4 (similar to) Basic scenario analysis Prime Paints is in the process of evaluating two mutually exclusive additions to its processing capacity. The firm's financial analysts have developed pessimistic, most likely, and optimistic estimates of the annual cash inflows associated with each project. These estimates are shown in the following table. Project A Project B Initial investment 12,500 12,500 (CF 0CF0) Outcome Annual cash inflows (CF CF ) Pessimistic $880 $1,550 Most likely 1,690 1,690 Optimistic 2,420 1,790 a. Determine the range of annual cash inflows for each of the two projects. b. Assume that the firm's cost of capital is 10.5 %10.5% and that both projects have 17-year lives. Construct a table showing the NPVs for each project for each of the possible outcomes. Include the range of NPVs for each project. c. Do parts (a) and (b) provide consistent views of the two projects? Explain. d. Which project do you recommend? Why? a. The range of annual cash inflows for project A is $nothing.
In: Finance
List 10 trade trends and explain the importance of trade trends to international business? Also explain which trends impact the businesses most?
No palagirsm please
In: Finance
Bruno's is analyzing two machines to determine which one it should purchase. The company requires a rate of return of 14.6 percent and uses straight-line depreciation to a zero book value over a machine's life. Ignore bonus depreciation and taxes. Machine A has a cost of $318,000, annual operating costs of $8,700, and a life of 3 years. Machine B costs $247,000, has annual operating costs of $9,300, and a life of 2 years. Whichever machine is purchased will be replaced at the end of its useful life. Which machine should Bruno's purchase and why?
Machine A; because it will save the company about $13,406 a year
Machine A; because it will save the company about $18,100 a year
Machine B; because it will save the company about $16,510 a year
Machine B; because it will save the company about $11,609 a year
Machine B; because it will save the company about $13,406 a year
In: Finance
Suppose Proctor & Gamble (P&G) is considering purchasing $ 10 million in new manufacturing equipment. If it purchases the equipment, it will depreciate it for tax purposes on a straight-line basis over five years, after which the equipment will be worthless. It will also be responsible for maintenance expenses of $ 1.00 million per year paid in each of the years 1 through 5. It can also lease the equipment under a true tax lease for $2.6 million per year for the five years, in which case the lessor will provide necessary maintenance. Assume P&G's tax rate is 30 % and its borrowing cost is 7.0 %
a. What is the NPV associated with leasing the equipment versus financing it with the lease-equivalent loan?
b. What is the break-even lease rate long—that is, what lease amount could P&G pay each year and be indifferent between leasing and financing a purchase?
In: Finance
Your sales and cost accounting team have come up with upper and lower bound estimates for sales, prices and costs as shown in the table below. You are considering a project that requires an initial investment of $10,000. t is depreciable over four years using the straight line depreciation. The discount rate is 10%. Your tax bracket is 34% and you receive a tax credit for negative earnings in the year in which the loss occurs.
| Base Case | Lower Bound | Upper bound | |
| Unit Sale | 3,000 | 2,750 | 3,250 |
| Price/unit | $14 | $13 | $16 |
| Variable cost/unit | $9 | $8 | $10 |
| Fixed costs | $9,000 | $8,500 | $10,000 |
a)What is the base NPV for the project
b)What is the worst case NPV for the project
c)What is the best case NPV for the project
d)What is the best case accounting break-even?
In: Finance
30-year maturity bond has a 5.3% coupon rate, paid annually. It sells today for $884.92. A 20-year maturity bond has a 4.8% coupon rate, also paid annually. It sells today for $890.5. A bond market analyst forecasts that in five years, 25-year maturity bonds will sell at yields to maturity of 6.3% and 15-year maturity bonds will sell at yields of 5.8%. Because the yield curve is upward sloping, the analyst believes that coupons will be invested in short-term securities at a rate of 4.3%.
a. Calculate the (annualized) expected rate of return of the 30-year bond over the 5-year period. (Round your answer to 2 decimal places.)
b. What is the (annualized) expected return of the 20-year bond? (Round your answer to 2 decimal places.)
In: Finance
In: Finance
(Bond valuation relationships) The
1616-year,
$1 comma 0001,000
par value bonds of Waco Industries pay
77
percent interest annually. The market price of the bond is
$935935,
and the market's required yield to maturity on a comparable-risk bond is
66
percent.
a. Compute the bond's yield to maturity.
b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond.
c. Should you purchase the bond?
a. What is your yield to maturity on the Waco bonds given the current market price of the bonds?
nothing%
(Round to two decimal places.)
In: Finance
A new electronic process monitor costs $690,000. This cost could be depreciated at 30 percent per year (Class 10). The monitor would actually be worth $101,000 in five years. The new monitor would save $460,000 per year before taxes and operating costs. If we require a 12.5% return, what is the NPV of the purchase?Assume a tax rate of 25%
In: Finance
Bullworks Systems is trying to decide between two conveyor belt systems. System A costs $450,000, has a three year life and requires $15000 in pretax annual operating costs. System B costs $500,000, has a five year life and requires $80,000 in pretax annual operating costs. Both systems are to be depreciated straight line to zero over their lives and will have zero salvage value. If the pretax rate is 34 percent and the discount rate is 20% which project should Bullworks choose?
In: Finance
First what are the social responsibilities of a business ( Or Corporate Social Responsibilities to various Stakeholders)? Do theses social responsibilities conflict with the responsibility to maximize the wealth of the owners of the business ( i.e shareholders) or can the coexist? Why or Why not? Why is this topic important to you? ( It should be if you think about it).
In: Finance
|
The Morning Jolt Coffee Company has projected the following quarterly sales amounts for the coming year: |
| Q1 | Q2 | Q3 | Q4 | |||||||||
| Sales | $ | 780 | $ | 810 | $ | 890 | $ | 970 | ||||
| a. |
Accounts receivable at the beginning of the year are $370. The company has a 45-day collection period. Calculate cash collections in each of the four quarters by completing the following (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.): |
| Q1 | Q2 | Q3 | Q4 | |||||
| Beginning receivables | $ | $ | $ | $ | ||||
| Sales | 780.00 | 810.00 | 890.00 | 970.00 | ||||
| Cash collections | ||||||||
| Ending receivables | $ | $ | $ | $ | ||||
| b. |
Recalculate the cash collections with a collection period of 60 days. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.) |
| Q1 | Q2 | Q3 | Q4 | |||||
| Beginning receivables | $ | $ | $ | $ | ||||
| Sales | 780.00 | 810.00 | 890.00 | 970.00 | ||||
| Cash collections | ||||||||
| Ending receivables | $ | $ | $ | $ | ||||
| c. |
Recalculate the cash collections with a collection period of 30 days. (Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places, e.g., 32.16.) |
| Q1 | Q2 | Q3 | Q4 | |||||
| Beginning receivables | $ | $ | $ | $ | ||||
| Sales | 780.00 | 810.00 | 890.00 | 970.00 | ||||
| Cash collections | ||||||||
| Ending receivables | $ | $ | $ | $ | ||||
Please help with all parts
In: Finance
(Bond valuation) Fingen's 14-year, $1 comma 000 par value bonds pay 12 percent interest annually. The market price of the bonds is $890 and the market's required yield to maturity on a comparable-risk bond is 15 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond? a. What is your yield to maturity on the Fingen bonds given the market price of the bonds? nothing% (Round to two decimal places.)
In: Finance
(Bond valuation) Pybus, Inc. is considering issuing bonds that will mature in 15 years with an annual coupon rate of 8 percent. Their par value will be $1 comma 000, and the interest will be paid semiannually. Pybus is hoping to get a AA rating on its bonds and, if it does, the yield to maturity on similar AA bonds is 11.5 percent. However, Pybus is not sure whether the new bonds will receive a AA rating. If they receive an A rating, the yield to maturity on similar A bonds is 12.5 percent. What will be the price of these bonds if they receive either an A or a AA rating? a. The price of the Pybus bonds if they receive a AA rating will be $ nothing. (Round to the nearest cent.)
In: Finance