Mr Chan’s son is three years old now and will be going to college in 15 years. Mr Chan would like to have $625,000 in a savings account to fund his education at that time. If the account promises to pay a fixed interest rate of 3% per year, how much money does Mr Chan need to put in the account today to ensure that he will have $625,000 in 15 years?

Professor Wendy Smith has been offered the following​ opportunity: A law firm would like to retain her for an upfront payment of $48,000. In​ return, for the next year the firm would have access to eight hours of her time every month. As an alternative payment​ arrangement, the firm would pay Professor​ Smith's hourly rate for the eight hours each month. ​ Smith's rate is $535 per hour and her opportunity cost of capital is 15% per year. What does the IRR rule advise regarding the payment​ arrangement? (Hint: Find the monthly rate that will yield an effective annual rate of 15%​. What about the NPV​ rule?

Discuss the two reasons that the disposition effect hurts investment performance

You are considering making a movie. The movie is expected to cost $10.9 million up front and take a year to produce. After​ that, it is expected to make $4.9 million in the year it is released and $1.8 million for the following four years. What is the payback period of this​ investment? If you require a payback period of two​ years, will you make the​ movie? Does the movie have positive NPV if the cost of capital is 10.6%​?

Massey Motors is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 10% a year for the next 3 years and then decreasing the growth rate to 4% per year. The company just paid its annual dividend in the amount of 1.00 per share. What is the current value of one stock if the required rate of return is 13.75?

Please include steps/ formulas involved for this problem

1. Differentiate barometric price leadership and dominant price leadership.

2. Is there a similarity between cartel pricing and monopoly pricing?

3. What conditions are favorable to the formation and maintenance of a cartel?

4. Can government be a potent force in the establishment and maintenance of monopolistic conditions? Name and describe such occurrences.

5. Describe the properties of the Baumol revenue maximization model. Do you consider this to be a good alternative to the profit maximization model?

6. Telephone companies charge different rates for calls during the day, in the evening, and at night or weekends. Do you consider this to be price discrimination?

Inflation has remained low for the past 5 years but you have come to the conclusion that trend is ending and inflation will increase significantly over the next 2 years. Assume you have reached this conclusion prior to other investors reaching the same conclusion. What adjustments should you make to your bond portfolio in light of your conclusions?

As a Division Manager you have $250,000 to invest in a new project. The Maverick Project Teams says that if you invest with them the company will receive returns of $70,000 after a year, $120,000 after two years and $120,000 after three years. The Bull Project Team says that if you invest with them the company will receive nothing for the first two years and then $370,000 at the end of the third year. The current annual discount rate is 6%. Create a worksheet that determines which project team offers the better financial return on the investment.

Suppose Disney issued a convertible (non-callable) bond with an annual coupon of 10% that matures in 5 years. The conversion ratio is 26.32 shares of stock per bond and Disney’s stock is currently trading at $30 per share. The convertible bond is priced at $900 in the market and the appropriate discount rate is 13%.

1. What is the Straight Bond Value of this convertible?
2. What is the Option Value of the Bond?
3. What is the Conversion Value of the Bond?
4. Based solely on today’s values, should you convert?

Business Finance
Detailed analysis of statistical methods to access stand alone risk?

Students need to answer case study questions and two following tutorial questions.

Answers need to present in the point form, include 100 to 200 words for each question.

1. What are the key characteristics of a digital business strategy model?
2. Evaluate the range of restructuring options for an existing ‘bricks-and-mortar’ organization to move to ‘bricks-and-clicks’ or ‘clicks-only’ contributing a higher online revenue.

For all of the capital budgeting methodologies, what are the advantages and disadvantages using them as a financial manager?

o-Anne just bought 200 bonds at a purchase price of R1 043.70 each. The bonds will mature in 7 years’ time and have a face value of R1 000.00. The coupon rate is 11% and is paid semi-annually. Answer the questions that follow:

1.1 Calculate the prevailing interest rate.

1.2 If the prevailing interest rate is 12%, what would happen to the price of the bond?

1.3 If Lee-Anne bought the bonds at R1 043.70 and the prevailing interest rate changes to 12%, what would the capital gains yield be?

Lee-Anne bought the bonds at R1 043.70 and after four years she decides to sell the bonds while the prevailing interest rate is 9%. Answer the following questions relating to this scenario:
1.4.1 Calculate the capital gains yield.
1.4.2 Calculate the current yield.
1.4.3 Calculate the total Rand return.

Note on the questions above. Can you provide me with a more detailed calculation as to how you got to your answers for the questions and not just the answer after formula has been provided. Thank you

Caviar Fishfarm Ltd (‘CFL’) is unlevered, has an equity beta of 1.25 and unlevered cash flows of $76,800 per annum that will continue in perpetuity. The expected market return is 10%p.a and Treasury bills earn 2%p.a. CFL is currently considering issuing $300,000 in new debt with an 8% interest rate. CFL would repurchase $300,000 of its own shares, using the proceeds of the debt issue. There are currently 32,000 shares outstanding and the company’s effective marginal tax rate is 34%. Calculate the WACC (after tax) after the restructuring is complete.

You will deposit $300 per year for the next 5 years. You expect the interest rate 1 year from now to be 8%, 2 years from now to be 8%, 3 years from now to be 12%, and 4 years from now to be 9%. If your forecast of interest rates is correct, how much money will you have 5 years from now?

Round your answer to 2 decimal places, for example 100.12.