you have the choice of two investments of equal risk. The required return for both is 8%. The first pays 1500 per month for 30 years and starts in 2 years. The second pays 15000 per year in perpetuity, but starts in 3 years. If the cost of both the investments is the same, which one would you prefer and why?

Bond X is noncallable and has 20 years to maturity, a 7% annual coupon, and a $1,000 par value. Your required return on Bond X is 10%; and if you buy it, you plan to hold it for 5 years. You (and the market) have expectations that in 5, years the yield to maturity on a 15-year bond with similar risk will be 7%. How much should you be willing to pay for Bond X today? (Hint: You will need to know how much the bond will be worth at the end of 5 years.) Round your answer to the nearest cent.

Woodbridge Manufacturing is also considering developing a new assembly line on which to build another new product (not covered in the text). In what category should the costs listed below be placed:

Initial investment outlay (time0)
Supplemental annual cash flows (time1 through timeN)
Terminal value (timeN), or Disregarded?

Also state your reasoning for choosing that classification. Consider each element individually.
This product has been developed over the past three years, at a total cost of $125,000.
The building that Woodbridge is planning to be used is currently rented out to another company for $10,000 per month, and they are on a month-to-month lease so the lease can be terminated with 90 days' notice.
The new product will replace a current product, which is currently generating $12,000 per month in free cash flow (cash earnings less applicable costs).
The machines will cost $750,000.
Travel to see similar machines in operation at another company's factory costed $3,500.
Freight and installation for the machines will cost $75,000.
It is projected that the additional inventories valued at $80,000 will be required to support sales of the product.
Woodbridge will offer 90 day credit terms to purchasers of the new product which are expected to expand accounts receivable by an average of $145,000.
The gross profit (or gross margin) on the sales of the product is expected to be $360,000 per year for the five years of the project.
Purchases of material for the project is expected to increase the balance of the accounts payable by $32,000 during the project life.
Interest on a loan taken out around the time of starting the project will be $12,000 per year.
The salvage value of the machines is expected to be $236,000 at the end of the project.

A project has an initial cost of $52,125, expected net cash inflows of $12,000 per year for 7 years, and a cost of capital of 12%. What is the project's discounted payback period? (Hint: Begin by constructing a time line.) Do not round intermediate calculations. Round your answer to two decimal places.

Gregory is an analyst at a wealth management firm. One of his clients holds a $10,000 portfolio that consists of four stocks. The investment allocation in the portfolio along with the contribution of risk from each stock is given in the following table:

Gregory calculated the portfolio’s beta as 0.825 and the portfolio’s expected return as 12.19%.

Gregory thinks it will be a good idea to reallocate the funds in his client’s portfolio. He recommends replacing Atteric Inc.’s shares with the same amount in additional shares of Transfer Fuels Co. The risk-free rate is 6%, and the market risk premium is 7.50%.

According to Gregory’s recommendation, assuming that the market is in equilibrium, how much will the portfolio’s required return change?

0.26 percentage points

0.20 percentage points

0.32 percentage points

0.30 percentage points

Analysts’ estimates on expected returns from equity investments are based on several factors. These estimations also often include subjective and judgmental factors, because different analysts interpret data in different ways.

Suppose, based on the earnings consensus of stock analysts, Gregory expects a return of 13.43% from the portfolio with the new weights. Does he think that the revised portfolio, based on the changes he recommended, is undervalued, overvalued, or fairly valued?

Undervalued

Fairly valued

Overvalued

Suppose instead of replacing Atteric Inc.’s stock with Transfer Fuels Co.’s stock, Gregory considers replacing Atteric Inc.’s stock with the equal dollar allocation to shares of Company X’s stock that has a higher beta than Atteric Inc. If everything else remains constant, the portfolio’s beta would   .

this is all the information that is given to me.

.

A project has an initial cost of $50,000, expected net cash inflows of $11,000 per year for 9 years, and a cost of capital of 11%. What is the project's IRR? Round your answer to two decimal places.

Suppose you wish to plan for your newborn’s college tuition payment. You intend to make equal quarterly deposits into an account offering annual rate of 6% compounded quarterly on the child’s 1st through 12th birthdays. You expect that tuition payments will be $40,000 every six months by the time the child is ready to enter college. Therefore, your goal is to make eight semi-annual withdrawals of $40,000 each starting on the child’s 18th birthday to be used for his tuition payments. How much must each of the quarterly deposits be such that there will be enough money accumulated in the account to exactly meet the goal? Assume the account offers 6% per year compounded quarterly until the child’s 18th birthday and 6% per year compounded semi- annually after that. [Suggestion: Draw the cash flow diagram to aid you in solving this problem.

In Australia, the Federal and State governments can raise funds by issuing bonds. Please list the major investors names of these fond .

Q 10

St. Johns River Shipyards is considering the replacement of an 8-year-old riveting machine with a new one that will increase earnings before depreciation from $27,000 to $52,000 per year. The new machine will cost $82,500, and it will have an estimated life of 8 years and no salvage value. The new machine will be depreciated over its 5-year MACRS recovery period; so the applicable depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. The applicable corporate tax rate is 40%, and the firm's WACC is 10%. The old machine has been fully depreciated and has no salvage value.

What is the NPV of the project? Negative value, if any, should be indicated by a minus sign. Round your answer to the nearest cent.
$   

Should the old riveting machine be replaced by the new one?
-Select-YesNoItem 2

please show clear expiation i want to do it by my self again and get the same result

Interest rates in Mexico are 3% and in the United States they are currently 0.025%. The MXN/USD spot rate is 0.076. You are offered a 12-month forward rate of .08.

A) show whether the forward contract is overvalued or undervalued.

B) which currency should you borrow and why ?

C) what is the percentage return from engaging in Covered Interest Arbitrage ?