1. You work on a FX trading desk. A client calls and asks you the deposit rate you can guarantee them in the Malaysian Ringgit (MYR) currency for one year. You have the below information. What deposit rate can you offer the client as a guarantee you can secure them? Your main funding currency is USD. Answer in percentage points to the fourth decimal (e.g. 2.5000% is 2.5000).

USD/MYR Spot:    4.1090

USD/MYR 1-yr Forward FX: 4.1695

USD 1yr Interest Rate: 2.4400%

2. You are analyzing the returns of an investment fund over the last 2 years. Returns and inflation during that time are listed below in the table. What was the real return during year 1? Answer in percentage points to the nearest 4th decimal.

  Return   Inflation

Year 1 7.20% 3.90%

Year 2 2.10%. 4.20%

Some accountants think that the Statement of Cash Flows is the most important financial statement. Do you agree or disagree with this? Why or why not? Hint - consider a business that is highly cyclical in nature like an ice cream shop!

assignments for the corresponding assignment.

1. Use the following balance sheet and cash flow information to determine the net worth and net surplus for an individual in a recent month:

Liquid Assets $15,000

Home Value $220,000

Investment assets: $120,000

Personal Property $30,000

Total assets: $385,000

Short Term Debt: $7000 ($250 a month)

Monthly Mortgage Payment $1400 on a $180,000 mortgage

Total Debt: $187,000

Monthly Gross Income: $11,000

Monthly Disposable Income $ 4000

Monthly Expenses: $7000

2. Now that the individual in question 1 has a better understanding of their situation, let’s analyze further. Given the balance sheet and cash-flow statement information in question 1, calculate the following ratios see page 87:

Liquidity Ratio

Asset-to-Debt Ratio

Debt-to-Income Ratio

Debt payments-to-disposable income ratio

Investment assets-to-total assets ratio

Nonannual Compounding

It is now January 1. You plan to make a total of 5 deposits of $400 each, one every 6 months, with the first payment being made today. The bank pays a nominal interest rate of 12% but uses semiannual compounding. You plan to leave the money in the bank for 10 years. Do not round intermediate calculations. Round your answers to the nearest cent.

1. How much will be in your account after 10 years?

   $ ___________

2. You must make a payment of $1,992.04 in 10 years. To get the money for this payment, you will make five equal deposits, beginning today and for the following 4 quarters, in a bank that pays a nominal interest rate of 12% with quarterly compounding. How large must each of the five payments be?

   $ _____________

As an investor, what would you look for in an annual report? Why are the notes to the financial statements so important?

Amanda, who is in the 32% marginal tax bracket, must decide between two investment opportunities, both of which require an initial cash outlay of $150,000 at the beginning of year 1. Investment A: This investment will yield $25,500 before-tax cash flow at the end of years 1, 2 and 3. This cash represents ordinary taxable income. At the end of year 3, Amanda can liquidate the investment and recover her $150,000 cash outlay. She must pay a nondeductible (for tax purposes) $750 annual fee at the end of years 1, 2, and 3 to maintain Investment A. Investment B: This investment will not yield any before-tax cash flow during the period over which Amanda will hold the investment. At the end of year 3, Amanda will be able to sell Investment B for $215,000 cash. Her $65,000 profit on the sale will be a capital gain. Required: Assuming a 6% discount rate and end-of-year tax payments, determine which investment has the greater net present value.

Good day, I trust you are well. Kindly assist with below...

The company is an online retailer of books, CDs and DVDs. The company was set up five years ago by a wealthy entrepreneur, David Nile, and has now grown to the point where the board of directors have decided that a listing should be sought on the local stock exchange. David Nile owns 80% of the ordinary shares and has agreed to sell all of these as part of the public offering.

Recently, the board of directors began to debate the future dividend policy of the company, assuming the stock exchange listing would be successful. However, there was a clear divergence of views. The chairman felt that the current dividend policy was unacceptable and needed to be changed. He argued that the company had been investing heavily in its distribution methods and in advertising in the early years and that dividend policy had not been a pressing issue. However, the proposed listing must now lead to a reconsideration of the importance of dividends. The chief operating officer, on the other hand, felt that the chairman’s concerns were unfounded as the pattern of dividends had no effect on the shareholder wealth.

Information concerning the company since it was first set up is as follows:

3.1 Evaluate the views expressed by the chief operating officer and by the Chairman. (12)

3.2 Analyse the dividend policy that has been pursued to date and discuss whether a change would be in the interests of shareholders. (8)

3.3 Discuss the key points that should be considered when establishing an appropriate dividend policy for the company. (5)

A Restaurant is open only for 25 days in a month. Expenses for the restaurant include raw material for each sandwich at $6.00 per slice, $1,004.00 as monthly rental and $470.00 monthly as insurance. They consider the cost of lost sales as $5.00 per item. They are able to sell any leftover sandwiches for $3. They prepares 200.00 sandwiches and sells them at a rate of $12.00/sandwich. Today there was a party at nearby office so the demand for sandwiches rose to 226.00. How much profit did the restaurant earn today?

For both questions, please show what you typed into the TVM solver.

N:

I:

PV:

PMT:

FV:

Time of month: End or beginning

1. Rachel, who just turned 18, deposits a $15,000 gift into an interest-bearing account earning a 7.5% annual rate of interest. How much will she have in the account when she retires at age 60, assuming all interest is reinvested at the 7.5% rate? If Rachel decided she only needed $300,000 at retirement, could she retire at 59? Explain.

2. James deposited $800 at the end of the past 16 years to purchase his granddaughter, Kali, a car, James earned 8% interest compounded annually on his investment. If the car Kali chooses costs $22,999, would she have enough money in the account to purchase the vehicle? What would be the deficit or surplus?

You currently have $620k in savings. You plan on living off of a growing perpetuity which grows at 3% per year (and passing it on to your kids). You plan on retiring exactly 12 years from today, at which point you collect your first cash payment. You will not contribute any more money to the savings account before retirement, but your current $620k in savings will grow at the discount rate until you retire. How much will the first payment of the growing perpetuity be if the appropriate discount rate is 6%?

A bond issued for the purpose of building a tunnel between New Jersey and New York in which tolls are expected to pay the coupon and principal payments to the bondholders is most likely characterized as a(n):

The most likely reason an organization would issue commercial paper is to:

Which of the following is (are) correct regarding average returns?

A mortgage-backed security can be characterized as having:

Which of the following statements concerning risk is not correct?

A financial institution hopes to form an equity mutual fund that invests solely in blue-chip stocks. The most likely piece of legislation that dictates the law surrounding the fund is the:

I included the chart I would develop to identify the problem's time value of money variables for the calculation. Please use a financial calculator or financial calculator application for all problems. To receive credit for your calculations, please include the appropriate time value of money variables chart with your response. There is no need to document the time value of money formula used, as provided in the textbook.

Using a financial calculator or online application, calculate the following:

(a) The amount a person would need to deposit today to be able to withdraw $6,000 each year for ten years from an account earning 6 percent.

(b) A person is offered a gift of $5,000 now or $8,000 five years from now. If such funds could be expected to earn 8 percent over the next five years, which is the better choice?

(c) A person wants to have $3,000 available to spend on an overseas trip four years from now. If such funds could be expected to earn 6 percent, how much should be invested in a lump sum to realize the $3,000 when needed?

(d) A person invests $50,000 in an investment that earns 6 percent. If $6,000 is withdrawn each year, how many years will it take for the fund to run out?

Topperton Company has developed a new industrial product. An outlay of $8 million is required for equipment to produce the new product, and additional net working capital of $400,000 is required to support production and marketing. In addition, a one-time $400,000 (before-tax) expense will be incurred the year that the equipment is placed into service. The equipment will be depreciated on a straight-line basis to a zero book value over 6 years. Although the depreciable life is 6 years, the project is expected to have a productive life of 8 years, and it is estimated that the equipment can be sold for $1 million at that time. Revenues minus expenses are expected to be $3 million per year. The cost of capital for this project is 14%, and the relevant tax rate is 30%. What is the NPV of the new product?

Group of answer choices

$2,956,923

$3,326,891

$3,002,696

None of these

You are planning on buying $100,000 face value of Australian Commonwealth Government Bonds. The bonds mature on 15 February 2027 and have a coupon rate of 4.75%. If your purchase will settle on 27 April 2012, and the quoted yield for the bond is 5.81%, what is the cash price of the bonds to the nearest dollar?

The Securities and Exchange Commission (SEC) has the legal authority to regulate the form and content of financial statements. However, the SEC relies on the following organizations for implementation:

Financial Accounting Standards Board (FASB). Industry Committees of the American Institute of Certified Public Accountants (AICPA.)Principles and Practices Board of the Healthcare Financial Management Association (HFMA). Should the preparation and presentation of financial accounting data be regulated?