Questions
kwesa corporation has a premium bond making semiannual payments . the bond pays a 9% coupon,...

kwesa corporation has a premium bond making semiannual payments . the bond pays a 9% coupon, has a YTM of 7%, and has 13 years to maturity. the modigliani company has a discount bond making semiannual payments. This bond pays 7%coupon, has YTM of 9%, and also has 13 years to maturity. if interest rate remain unchanged, what do you expect the price of these bonds to be?

i) a year from now

ii) in 3 years

iii) in 8 years

iv) in 12 years

whats going on here

In: Finance

d. One of the distinguishing features of international finance is exchange rate. Would you prefer a...

d. One of the distinguishing features of international finance is exchange rate. Would you prefer a weaker U.S. dollar or a strong U.S. dollar?

100 words or less

In: Finance

Explain in a paragraph, There is speculation that the U.S. will experience higher relative inflation rates...

Explain in a paragraph, There is speculation that the U.S. will experience higher relative inflation rates over the following 24 months or longer. Explain fully how this would influence the USD in foreign exchange markets. Would the dollar be stronger?

In: Finance

Expansion versus replacement cash flows   Tesla Systems has estimated the cash flows over the​ 5-year lives...

Expansion versus replacement cash flows   Tesla Systems has estimated the cash flows over the​ 5-year lives for two​ projects, A and B. These cash flows are summarized in the following table.  ​(Click on the icon located on the​ top-right corner of the data table below in order to copy its contents into a​ spreadsheet.)

Project A

Project B

Initial investment

−$4,652,000

$1,543,000​*

Year

Operating cash flows

1

$556,000

$371,000

2

  925,000

371,000

3

  1,359,000

  371,000

4

  2,224,000

 371,000

5

   3,400,000

  371,000

​*After-tax cash inflow expected from liquidation.

a. If Project​ A, which requires an initial investment of −$4,652,000​, is a replacement for Project B and the $1,543,000 initial investment shown for Project B is the​ after-tax cash inflow expected from liquidating​ it, what would be the net cash flows for this replacement​ decision?

b. How can an expansion decision such as project A be viewed as a special form of a replacement​ decision? Explain.

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Carol sold her personal residence to Mike for $300,000. Before the sale, Carol paid the real...

  1. Carol sold her personal residence to Mike for $300,000. Before the sale, Carol paid the real estate taxes of $8,000 for the calendar year. For income tax purposes, the deduction is apportioned as follows: $5,000 to Carol and $3,000 to Mike.

a. What is Mike’s basis in the residence?

b. What is Carol’s amount realized from the sale of the residence?

c. What amount of real estate taxes can Mike deduct?

d. What amount of real estate taxes can Carol deduct?

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Revenue Cost Profit Budget 168,000 120,000 40% Actuals 157,000 125,500 25% Variance -11,000 5,500 -15% do...

Revenue

Cost

Profit

Budget

168,000

120,000

40%

Actuals

157,000

125,500

25%

Variance

-11,000

5,500

-15%

do analysis with this table, and give an advice to make business better

In: Finance

For calendar year 2017, Thurston and Eunice Howell (ages 59 and 60) file a joint return...

  1. For calendar year 2017, Thurston and Eunice Howell (ages 59 and 60) file a joint return reflecting AGI of $280,000. They incur the following expenditures:

Medical expenses before 10%-of-AGI floor

$30,000

Casualty loss (not covered by insurance) before statutory floors

30,000

Interest on home mortgage

10,000

Interest on credit cards

800

Property taxes on home

13,000

Charitable contributions

17,000

State income tax

15,000

Tax return preparation fees

1,200

What is the amount of itemized deductions the Thurstons may claim?

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Your friend promises you an investing opportunity that she claims has no risk but will provide...

Your friend promises you an investing opportunity that she claims has no risk but will provide a guaranteed 20% annual return. (Note: U.S. Treasuries are providing a return of 2%.) What should you do? Group of answer choices Split the difference: put half of your investment in your friend's investing opportunity and half in U.S. Treasuries. This is possible but you should at least check out your friend's track record and if there are investors who have been receiving 20% return anually, go ahead and invest. Don't invest. This sounds like a scam because it is not consistent with the relation between risk and return. This sounds like a sweet deal. Invest $100,000 with your friend.

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In 2017, there is a move to repeal the estate and gift tax. This tax, which...

In 2017, there is a move to repeal the estate and gift tax. This tax, which impacts families with asset transfers exceeding $22 Million, impact few families in the U.S. discuss why so many people, who are not even impacted by this tax, strongly oppose it. Provide an example from your research on a case (different from your peers) regarding death or gift taxes and provide an analysis of the outcome of the case.

In: Finance

explain difference between Operating and Terminal Cash Flow 250 words

explain difference between Operating and Terminal Cash Flow 250 words

In: Finance

4. A borrower takes out a 30-year mortgage loan for $100,000 with an interest rate of...

4. A borrower takes out a 30-year mortgage loan for $100,000 with an interest rate of 6% plus 2 points. What is the effective annual interest rate on the loan if the loan is carried for all 30 years?
(A) 6.0%
(B) 6.2%
(C) 6.4%
(D) 6.6%

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Market Top Investors, Inc., is considering the purchase of a $365,000 computer with an economic life...

Market Top Investors, Inc., is considering the purchase of a $365,000 computer with an economic life of four years. The computer will be fully depreciated over four years using the straight-line method, at which time it will be worth $114,000. The computer will replace two office employees whose combined annual salaries are $95,000. The machine will also immediately lower the firm’s required net working capital by $84,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 24 percent. The appropriate discount rate is 9 percent. Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Please help figure out where I am making a mistake:

Streight line Method depreciation: Accumulated Depreciation = Cost of Asset/Economic Life
Year 0 1 2 3 4
Savings in annual cost before tax) $95,000 $95,000 $95,000 $95,000
Depreciation Exense ($91,250) ($91,250) ($91,250) ($91,250)
Net Savings before tax $3,750 $3,750 $3,750 $3,750
Less Tax $2,850 $2,850 $2,850 $2,850
After Tax Savings $900 $900 $900 $900
Initial Investemetn ($365,000)
After Tax Salvage Value $     86,640.00
Working Capital $84,000 ($84,000)
Add back depreciation expense $91,250 $91,250 $91,250 $91,250
Net Cash Flow ($281,000) $         92,150.00 $92,150 $92,150 $94,790
PV Factor @9% 1 0.917431193 0.841679993 0.77218348 0.77218348
PV ($281,000) $         84,541.28 $77,560.81 $71,156.71 $73,195.27
NPV $25,454.08

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3. A borrower has a 30-year mortgage loan for $200,000 with an interest rate of 5%...

3. A borrower has a 30-year mortgage loan for $200,000 with an interest rate of 5% and monthly payments. If she wants to pay off the loan after 8 years, what would be the outstanding balance on the loan?
(A) $84,886
(B) $91,246
(C) $171,706
(D) $175,545

In: Finance

Show all steps and equations. 2) You are evaluating two different aluminum milling machines. The Alumina...

Show all steps and equations.

2) You are evaluating two different aluminum milling machines. The Alumina I costs $240,000, has a three-year life, and has pretax operating costs of $63,000 per year. The Alumina II costs $420,000, has a five-year life, and has pretax operating costs of $36,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $40,000. If your tax rate is 35 percent and your discount rate is 10 percent, which do you prefer? Why?

In: Finance

Consider a company that issues a dual-currency bond with a face value of €45 million, which...

Consider a company that issues a dual-currency bond with a face value of €45
million, which pays an interest rate of 3.5 percent a year in dollars. Indicate
how the company can manage the risk on this bond issue and calculate the net cash
flows associated with the transactions. A bond with a face value of €45 million
that pays 5 percent annual interest in euros is available for purchase. The fixed
rates on a currency swap are 4 percent in dollars and 4.75 percent in euros and
the exchange rate is €1.15/$. (8)

In: Finance