You will be paying $11,500 a year in tuition expenses at the end of the next two years. Bonds currently yield 10%.
a. What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.)
b. What maturity zero-coupon bond would immunize your obligation? (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Face value" to 2 decimal places.)
b1,Duration?
b2. Face Value
C.
c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 12%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? (Do not round intermediate calculations. Input the amount as a positive value. Round your answer to 2 decimal places.)
Net position _____? in value by _____?
Please answer fully!
In: Finance
ou will be paying $11,500 a year in tuition expenses at the end of the next two years. Bonds currently yield 10%.
a. What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.)
b. What maturity zero-coupon bond would immunize your obligation? (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Face value" to 2 decimal places.)
c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 12%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? (Do not round intermediate calculations. Input the amount as a positive value. Round your answer to 2 decimal places.)
d. What if rates fall immediately to 8%? (Do not round intermediate calculations. Input the amount as a positive value. Round your answer to 2 decimal places.)
Please answer fully!
In: Finance
You will be paying $9,200 a year in tuition expenses at the end of the next two years. Bonds currently yield 6%.
a. What is the present value and duration of your obligation? (Do not round intermediate calculations. Round "Present value" to 2 decimal places and "Duration" to 4 decimal places.)
present value ? duration?
b. What maturity zero-coupon bond would immunize your obligation? (Do not round intermediate calculations. Round "Duration" to 4 decimal places and "Face value" to 2 decimal places.)
c. Suppose you buy a zero-coupon bond with value and duration equal to your obligation. Now suppose that rates immediately increase to 8%. What happens to your net position, that is, to the difference between the value of the bond and that of your tuition obligation? (Do not round intermediate calculations. Input the amount as a positive value. Round your answer to 2 decimal places.)
Net value increases or decreases?
By what value?
d. What if rates fall immediately to 4%? (Do not round intermediate calculations. Input the amount as a positive value. Round your answer to 2 decimal places.)
Net value increases or decreases?
By what value?
duration? face value?
In: Finance
You will be paying $9,500 a year in tuition expenses at the end
of the next two years. Bonds currently yield 8%.
a. What is the present value and duration of your
obligation?
b. What maturity zero-coupon bond would
immunize your obligation?
c. Suppose you buy a zero-coupon bond with
value and duration equal to your obligation. Now suppose that rates
immediately increase to 9%. What happens to your net position, that
is, to the difference between the value of the bond and that of
your tuition obligation?
d. What if rates fall immediately to 7%?
In: Finance
How are the dividends declared and paid by a subsidiary during the year eliminated in the consolidated workpapers under each method of accounting for investments?
In: Accounting
The current price of a stock is $50. In 1 year, the price will be either $65 or $35. The annual risk-free rate is 10%. Find the price of a call option on the stock that has an exercise price of $55 and that expires in 1 year. (Hint: Use daily compounding.)
In: Finance
A company acquired a truck for $79,000 at the beginning of the fiscal year. It has a useful life of 5 years and a residual value of $9,000. The company uses the straight-line method of depreciation. After owning the truck for 2 years, the company sold it for $34,000. (a) Determine depreciation expense for each of the first 2 years, and (b) determine the gain or loss resulting from the sale.
In: Accounting
You will be paying $10,200 a year in tuition expenses at the end
of the next two years. Bonds currently yield 9%.
a. What is the present value and duration of your
obligation? (Do not round intermediate calculations. Round
"Present value" to 2 decimal places and "Duration" to 4 decimal
places.)
b. What is the duration of a zero-coupon bond that
would immunize your obligation and its future redemption value?
(Do not round intermediate calculations. Round "Duration"
to 4 decimal places and "Future redemption value" to 2 decimal
places.)
c. Suppose you buy a zero-coupon bond with value
and duration equal to your obligation. Now suppose that rates
immediately increase to 10%. What happens to your net position,
that is, to the difference between the value of the bond and that
of your tuition obligation? (Enter your answer as a
positive value. Do not round intermediate calculations. Round your
answer to 2 decimal places.)
d. What if rates fall to 8%? (Enter your
answer as a positive value. Do not round intermediate calculations.
Round your answer to 2 decimal places.)
In: Finance
3. The IRR is the rate which makes the principal at the beginning of the year following the last cash flow is paid out equal to 0. This is shown in the table below. Use the Goal Seek function of Excel to find this rate.
|
A |
B |
C |
D |
E |
F |
G |
H |
||
|
1 |
IRR? |
3.00% |
|||||||
|
2 |
LOAN TABLE |
||||||||
|
3 |
Year |
Cash flow |
Year |
Principal at beginning of year |
Payment at end of year |
Interest |
Principal |
||
|
4 |
0 |
-800 |
1 |
800.00 |
300.00 |
24.00 |
276.00 |
||
|
5 |
1 |
300 |
2 |
524.00 |
200.00 |
15.72 |
184.28 |
||
|
6 |
2 |
200 |
3 |
339.72 |
150.00 |
10.19 |
139.81 |
||
|
7 |
3 |
150 |
4 |
199.91 |
122.00 |
6.00 |
116.00 |
||
|
8 |
4 |
122 |
5 |
83.91 |
133.00 |
2.52 |
130.48 |
||
|
9 |
5 |
133 |
6 |
-46.57 |
ß Should be zero for IRR |
||||
Check the value that you get and compare it to the Excel IRR function.
Help me with this please. In Excel using goal seek.
In: Finance
Boisvert ltée had the following inventories at the beginning and at the end of the year:
1 JANUARY 31 DECEMBER
¬
|
Raw materials (of which 20% were supplies) |
10 000 $ |
12 000 $ |
|
Current products |
20 000 $ |
17 000 $ |
|
Finished products |
30 000 $* |
?? |
|
* The stock of finished products on January 1 was 7,500 units |
||
* The stock of finished products on January 1 was 7,500 units
During the year, 250,000 units were sold and 247,000 units were manufactured. Purchases of raw materials cost $ 375,000, of which 80% were raw materials (20% supplies). The cost of the labor was $ 400,000, 65% direct labor and 35% indirect labor. In addition to supplies (also called indirect materials) and indirect labor, the following manufacturing overhead costs were incurred:
Driving force $ 160,000
Depreciation 45,000
Property taxes 85,000
Repairs and maintenance 20,000
The selling costs were $ 125,000 and the administration costs were $ 80,000.
Work required:
Calculate:
1. the cost of the products produced;
2. product costs (also called product costs);
3. period costs (also called period costs);
4. the income statement.
In: Accounting