In: Finance
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Your client is 40 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $12,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 7% in the future.
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In: Finance
Suppose that you purchase a $1,000 zero-coupon bond that matures 3 years from now and is priced to yield 4.5%., Assume interest is compounded semi-annually.
a. How much will you pay for the bond with exactly 3 years to maturity?
b. One year later, if interest rates remain the same, what will be the price of the bond?
c. If you paid $850 for the bond with 3 years to maturity, and held it until maturity, what will be your expected return (i.e. yield-to-maturity)?
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A loan of $100,000 is made today. The borrower will make equal repayments of $3070.83 per month with the first payment being exactly one month from today. The interest being charged on this loan is constant (but unknown). For the following two scenarios, calculate the interest rate being charged on this loan, expressed as a nominal annual rate in percentage:
(b) The term of the loan is unknown but it is known that the loan outstanding 2 years later equals to $46729.02.
In: Finance
home / study / business / finance / finance questions and answers / a) assuming triangular arbitrage is not possible and exchange rates are priced efficiently, ...
Question: A) Assuming triangular arbitrage is not possible and exchange rates...
a) Assuming triangular arbitrage is not possible and exchange rates are priced efficiently, use the following quotes to determine the percentage change in the NZD against the JPY.
|
Today |
1 year ago |
|
|
AUD NZD |
1.0362 |
1.0965 |
|
AUD JPY |
71.85 |
74.65 |
b) You have the following quotes from three different banks:
|
Big Time Bank |
71.85 JPY AUD |
|
Fack Bank |
0.9601 AUD NZD |
|
Trusty Bank |
69.99 JPY NZD |
If you can buy or sell at the given quotes, how much profit can you make using AUD $1 000 000. Clearly show each of your trades and give your profit in AUD.
In: Finance
1) Wick Inc., has sales of $889,095.00, operating costs (not including depreciation) of $320,074.20, depreciation expense of $124,473.30, interest expense of $62,236.65, and a tax rate of 38.00%. What is the net income for this firm?
a. $237,032.73
b. $237,032.73
c. $145,278.12
d. $168,928.05
2)Given the following Financial Information Answer the following question:
| 2017 | 2018 | |
|---|---|---|
| Cash | 3,000 | 461,305 |
| Accounts Receivable | 9,000 | 9,900 |
| Inventory | 5,000 | 5,500 |
| Prepaid Assets | 3,000 | 3,300 |
| Other Assets | 5,000 | 5,500 |
| Total Current Assets | 25,000 | 485,505 |
| Net PPE | 80,000 | 67,000 |
| Intangibles | 1,000 | 1,000 |
| Total Assets | 106,000 | 553,505 |
| Accounts Payable | 3,000 | 3,300 |
| Salary Payable | 1,000 | 1,100 |
| Notes Payable | 1,000 | 1,000 |
| Total Current Liabilities | 5,000 | 5,400 |
| Long-Term Debt | 70,000 | 70,000 |
| Total Liabilities | 75,000 | 75,400 |
| Common Stock | 40,000 | 40,000 |
| Retained Earnings | -9,000 | 438,105 |
| total equity | 31,000 | 478,105 |
| 2018 | |
|---|---|
| Sales | 2,965,000 |
| COGS | 2,223,750 |
| Gross Profit | 741,250 |
| SG&A | 12,000 |
| Other Operating Expenses | 13,000 |
| Depreciation | 8,000 |
| Interest | 6,785 |
| Taxes | 223,481 |
| Net Income | 485,984 |
| dividends | 38,879 |
Calculate the Change in Net Operating Working Capital (NOWC)
a. $ -460,504.82
b. $ 460,504.82
c. $ 460,104.82
d. $ -460,104.82
3)
Reihing Inc., 's current balance sheet shows total common equity of $1,667,544.00. The company has 340,000.00 shares of stock outstanding, and they sell at a price of $5.49 per share. By how much do the firm's book value and market value per share differ?
a. $-0.59
b. $4.90
c. $5.49
d. $0.59
In: Finance
Decision #2: Planning for Retirement
Erich and Mallory are 22, newly married, and ready to embark on the journey of life. They both plan to retire 45 years from today. Because their budget seems tight right now, they had been thinking that they would wait at least 10 years and then start investing $3000 per year to prepare for retirement. Mallory just told Erich, though, that she had heard that they would actually have more money the day they retire if they put $3000 per year away for the next 10 years - and then simply let that money sit for the next 35 years without any additional payments – then they would have MORE when they retired than if they waited 10 years to start investing for retirement and then made yearly payments for 35 years (as they originally planned to do). Please help Erich and Mallory make an informed decision:
Assume that all payments are made at the END a year (or month), and that the rate of return on all yearly investments will be 7.2% annually.
(Please do NOT ROUND when entering “Rates” for any of the questions below)
b2) How much will the amount you just computed grow to if it remains invested for the remaining 35 years, but without any additional yearly deposits being made?
In: Finance
1. the concept of net present value, and how it is calculated.
2. the net present value rule.
3. What do you understand by the concept 'internal rate of return'?
4. How is the net present value different from the internal rate of return?
5. A business proprietor sells on average $8000 worth of gasoline on rainy days and an average of $9500 on clear days. Statistics from the local meteorological station indicates that the probability is 0.76 for clear weather, and 0.24 for rainy weather on Sunday. Find the expected value of gasoline sales on Monday. Explain your calculations using one slide
In: Finance
Question N1 - XYZ is considering a 3-yr project. The initial outlay is $120,000, annual cash flow is $50,000 and the terminal cash flow is $10,000. The required rate of return (cost of capital) is 15%. The net present value is $736.42. What if the annual cash flow increases to $57,000 instead? Re-calculate the NPV.
Question N2 - Six years ago, XYZ Company invested $51,959 in a new machinery. The investment in net working capital was $4,716 which would be recovered at the end of the project. Today, XYZ Company is selling the machinery for $24,092. Today, the book value of the machinery is $11,215. The tax rate is 26 percent. What are the terminal cash flows in Year 6?
Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box
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was there any synergy and follow up implementation to the AOL - TIME WARNER MERGER?
In: Finance
Fijisawa Inc. is considering a major expansion of its product line and has estimated the following cash flows associated with such an expansion. The initial outlay would be
$2,000,000,
and the project would generate incremental free cash flows of
$650,000
per year for
5
years. The appropriate required rate of return is
9
percent.
a. Calculate the
NPV.
b. Calculate the
PI.
c. Calculate the
IRR.
d. Should this project be accepted?
In: Finance
Carraway Seed Company is issuing a
1,000
par value bond that pays
6
percent annual interest and matures in
8
years. Investors are willing to pay
$935
for the bond. Flotation costs will be
11
percent of market value. The company is in a
20
percent tax bracket. What will be the firm's after-tax cost of debt on the bond?
In: Finance
Hi there,
I am going to plan of a start-up "Fruits and vegetables organic " store
So Can you help me to plan "Business Model Canvas" (understanding of BMC will not be assessed in this assessment.)
If it is possible can you give me 1 reference as well please?
ex: Heidarkhani, A., & khomami, A.A, & Jahanbazi, Q.,& Alipoor, H. (2013). The Role of Management Information Systems ( MIS ) in Decision-Making and Problems of its Implementation, Universal Journal of Management and Social Sciences, Vol. 3, No. 3, pp. 78-89
Thanks a lot
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| Northeast Hospital is analyzing a potential project for a new outpatient center | ||||||||||
| Please use the following facts to create a 5-year projection of cash flow for the proposed center. Please create your full income statement first to include all cash and non-cash expenses | ||||||||||
| Calculate the projects NPV, IRR, MIRR, Payback Period (not discounted). Using these calculations, do you recommend that they should proceed with this project? Explain your answer | ||||||||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | ||||||
| Total projected Visits | 52500 | |||||||||
| Average Revenue per visit | $ 75.00 | |||||||||
| Average Variable Cost per Visit | $ 50.00 | |||||||||
| Total Fixed Costs | $ 500,000.00 | |||||||||
| Purchase Price for Equipment | $ 4,500,000.00 | |||||||||
| Monthly Rental Cost to Occupy the New Site | $ 5,000.00 | |||||||||
| Salvage Values of the Equipment (end of Year 5) | $ 750,000.00 | |||||||||
| Corporate Tax Rate | 40% | |||||||||
| Cost of Capital | 8% | |||||||||
| Other Assumptions | ||||||||||
| 1) Projected Visits are Expected to increase by 10% in Year 2, 5% in Year 3 and 3% each Year thereafter | ||||||||||
| 2) Negotiation with payers indicate that revenue rate (ie payment per visits) will increase by 2% each year and 5% in year 5 | ||||||||||
| 3) Variable Costs are expected to rise at a rate of 2% per year | ||||||||||
| 4) Fixed Costs are expected to rise at a rate of 1% per year | ||||||||||
| 6) Rent rates will be increased by 2.5% at the end of each year | ||||||||||
| 6) The equipment will depreciate based on the straight-line method of depreciation, a 5-year estimated life and the equipment will be sold at salvage value at the end of year 5 | ||||||||||
| 7) Tax rate will remain constant for the entire 5-year Period and do not assume any tax loss carryforward | ||||||||||
In: Finance
What are the assumptions of the Black-Scholes Option Pricing Model? Discuss each assumption
In: Finance