I and my husband Jatin have total amount of $150,000 in our savings account. We have 3 school going kids. We want to buy a new home, a new car and keep funds for children higher education.

We finalized to buy a home for $760,000. We may use $120,000 of our savings as a down payment on it. For balance financing the mortgage specialist/agent gave us the following options:

1. Option 1: a 25-year mortgage/loan, with semi-monthly payments (at the end of each period). The interest rate on the mortgage is 3.26% APR (annual percentage rate) compounded semi-annually.

Ques 1. What will the semi-monthly payment be on the Option 1 mortgage?

Please use (display + name) the excel function/ formula used for each yellow cell.

2. Option 2: a monthly payment of $2,900 to be made at the end of each period. The interest rate with this option would be 3.60% APR (annual percentage rate) compounded semi-annually.

Ques 2. How many years will Option 2 mortgage be amortized over? Please use (display + name) the available excel function/ formula in each yellow cell .

Ques 3. To buy a new car of $45,000 (including taxes). In exchange of our old car for $10,000 and $10,000 from our savings as a down payment, the car dealer would provide the $25,000 balance as a 5-year loan paid semi-monthly at 4.8% ANNUAL RATE compounded semi-monthly. What will the payment be on the loan for the car as per below information? Please use (display + name) the excel function/ formula used for each yellow cell.

It is your 25^th birthday (end of 25 years) and you decide that you want to retire on your 65^th birthday (end of 65 years - 40 years later). Your salary is $55,000 per year and you expect your salary to increase by 3% each year for the next 40 years. When you retire, you want your retirement fund to provide an annual payment equal to 80% of your salary at age 65 and to increase by 2% a year (to cover inflation) through the end of your retirement. You estimate your retirement will last 25 years (age 65-89 - 25 payments). You want to leave your children the sum of $750,000 when you die on your 90^th birthday. You do not want to work during your retirement and you are not counting on Social Security to provide anything during your retirement. Since you don't want to work during your retirement, you need to have all your money in the retirement fund on the day you retire (65 years old) and you also make the first retirement payment to yourself on your 65^th birthday. All calculations take place at the end of each year therefore you can use the rate tables.

Your expected rate of return (investment rate) for the entire period of time (65 years) is 5%. You are determined to save $15,000 a year for the first 20 years and $25,000 a year for the remaining 20 years until you retire.

1.      What will your salary be at age 65 (40 years from today)? How much is 80% of that salary (retirement goal) and how much income per year does your retirement fund need to provide if your needs increase by 2% a year?

2.      How much will you need in your retirement fund on the day you retire in order to receive the amounts in question #1 and leave the inheritance to your children? Show proof for the 26 payments (including inheritance) that you have enough in the fund?

3.      How much will you have saved (retirement fund) on the day you retire?

4.      If the answers to Questions #2 and #3 are different, how much are you either over or short in your retirement fund?

5.      If you are over or short in your account, how much should you have saved per year in order to have enough in your retirement fund? The assumption for this part of the problem is that you saved an equal amount per year (annuity) for the 40 years; not the $15,000 for the first 20 years and $25,000 for the remaining 20 years.

6.      If you were short in what you needed in the fund, how much could the actual retirement fund that you have in place provide you assuming you wanted an equal amount each year (annuity) and you still want to leave your children the $750,000 inheritance?

7.      You are too depressed by how much you have to save per year over the next 40 years so you decide to continue to have a good time and spend your money, and you don't start saving until you are 35 years old. For the next 30 years, you save $35,000 a year. How much will be in the fund on the day that you retire? How much will you have to save per year to have enough in your retirement fund on your 65^th birthday? All assumptions are the same (inflation and investment) as before.

8.      How much have you saved (invested) into the fund (excluding interest) if you start saving at 25 years old and how much have you saved (invested) into the fund (excluding interest) if you wait and start saving at 35 years old? How much more will you have in your retirement fund starting at 25 versus 35?

Suppose that a binomial tree has n steps, and the stock has initial price S0 and then at each step, its price can only move up by a factor u or down by a factor d. Let Sk, k = 0, 1, · · · , n, be the price of the stock at the end of the k-th step. Denote by τ time length between consecutive steps, and r the risk-free interest rate. Consider a call option with strike price K with maturity nτ .

(a) In the risk-neutral world, what is the probability that the stock moves down at each step?

(b) For n = 3, calculate the fair price for the option at current time corresponding to the initial node of the tree (please write out explicit formula).

Assume n = 10, τ = 1, r = 6%, S0 = 100, u = 1.1, d = 0.9, K = 110.

(c) In the risk-neutral world, find the probability that the stock price moves up five times and down four times in the first nine steps. What is the corresponding price value?

Your business is offered a contract that pays $386,427 every quarter for three years. What is the contract worth to you today if the discount rate is 7.03% per quarter.

Given the following information for O'Hara Marine Co., calculate the depreciation expense: sales = $73,000; costs = $37,200; addition to retained earnings = $9,800; dividends paid = $2,620; interest expense = $2,950; tax rate = 24 percent. (Do not round intermediate calculations and round your answer to the nearest whole dollar amount, e.g., 32.)

Delia Landscaping is considering a new 4-year project. The necessary fixed assets will cost $187,000 and be depreciated on a 3-year MACRS and have no salvage value. The MACRS percentages each year are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. The project will have annual sales of $124,000, variable costs of $33,100, and fixed costs of $12,650. The project will also require net working capital of $3,250 that will be returned at the end of the project. The company has a tax rate of 34 percent and the project's required return is 8 percent. What is the net present value of this project?

Big Sky Mining Company must install $1.5 million of new machinery in its Nevada mine. It can obtain a bank loan for 100% of the purchase price, or it can lease the machinery. Assume that the following facts apply:

1. The machinery falls into the MACRS 3-year class. (The depreciation rates for Year 1 through Year 4 are equal to 0.3333, 0.4445, 0.1481, and 0.0741.)
2. Under either the lease or the purchase, Big Sky must pay for insurance, property taxes, and maintenance.
3. The firm's tax rate is 25%.
4. The loan would have an interest rate of 15%. It would be nonamortizing, with only interest paid at the end of each year for four years and the principal repaid at Year 4.
5. The lease terms call for $420,000 payments at the end of each of the next 4 years.
6. Big Sky Mining has no use for the machine beyond the expiration of the lease, and the machine has an estimated residual value of $300,000 at the end of the 4th year.

1. What is the cost of owning? Enter your answer as a positive value. Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

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2. What is the cost of leasing? Enter your answer as a positive value. Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

   $  

3. What is the NAL of the lease? Do not round intermediate calculations. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar.

   $  

what is the sec and their function s for investors?

discuss what gaap and sarbanes-Oxley is?

P9-5 (similar to) The cost of debt   Gronseth Drywall​ Systems, Inc., is in discussions with its investment bankers regarding the issuance of new bonds. The investment banker has informed the firm that different maturities will carry different coupon rates and sell at different prices. The firm must choose among several alternatives. In each​ case, the bonds will have a ​$1,000 par value and flotation costs will be ​$30 per bond. The company is taxed at 28​%. Use the approximation formula to calculate the ​after-tax cost of financing with the following alternative.  ​(Click on the icon located on the​ top-right corner of the data table below in order to copy its contents into a​ spreadsheet.) Coupon rate Time to maturity Premium or discount 12​% 16 years negative $180 The​ after-tax cost of financing using the approximation formula is nothing​%. ​(Round to two decimal​ places.)

12% 16 -$180

2. Starkey Percussion, Inc., is a well-established supplier of fine percussion instruments to orchestras all over the United States. The company’s class A common stock has paid a dividend of $7.25 per share per year for the last 12 years. Management expects to continue to pay at that amount for the foreseeable future. Paul Harrison purchased 1,000 shares of Starkey class A common 10 years ago at a time when the required rate of return for the stock was 13%. He wants to sell his share today. The current required rate of return for the stock is 11%. How much capital gain or loss will Paul have on his shares?

Cost of common stock equity   Ross Textiles wishes to measure its cost of common stock equity. The​ firm's stock is currently selling for ​$65.88. The firm just recently paid a dividend of ​$3.98. The firm has been increasing dividends regularly. Five years​ ago, the dividend was just ​$3.04. After underpricing and flotation​ costs, the firm expects to net ​$61.93 per share on a new issue. a.  Determine average annual dividend growth rate over the past 5 years. Using that growth​ rate, what dividend would you expect the company to pay next​ year? b. Determine the net​ proceeds, Nn​, that the firm will actually receive. c.  Using the​ constant-growth valuation​ model, determine the required return on the​ company's stock, r Subscript s​, which should equal the cost of retained​ earnings, r Subscript r. d.  Using the​ constant-growth valuation​ model, determine the cost of new common​ stock, r Subscript n.