Assume Alcoa has access to the following quotes:

U.S. borrowing rate for 1 year = 9.5%

U.S. deposit rate for 1 year = 8.7%

French borrowing rate for 1 year = 11.3%

French deposit rate for 1 year = 10.2%

euro spot quote = $1.2363?78

euro 1 year forward quote = $1.2329?47

What value can Alcoa lock in for a receivable of euro3 million due in one year if it executes a money market hedge today?

Milliken uses a digitally controlled dyer for placing intricate patterns on manufactured carpet squares for home and commercial use. It is purchased for $400,000. Its market value will be $310,000 at the end of the 1st year and drop by $46,000 per year thereafter to a minimum of $30,000. Operating costs are $20,000 the 1st year, increasing by 9% per year. Maintenance costs are only $8,000 the 1st year but will increase by 36% each year thereafter. Milliken’s MARR is 20%. Determine the optimum replacement interval for the dyer.

1. You invested $1,250,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the fund has a high-water mark provision. Suppose the first year the fund manager loses 5 percent, the second year she gains 13 percent, and the third year she gains 7 percent. Assume management fees are paid at the beginning of each year and performance fees are taken at the end of each year.

What are the management and performance fees paid each year?

1. You invested $1,250,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the fund has a high-water mark provision. Suppose the first year the fund manager loses 5 percent, the second year she gains 13 percent, and the third year she gains 7 percent. Assume management fees are paid at the beginning of each year and performance fees are taken at the end of each year.

What are the management and performance fees paid each year?

BBK Company bought an equipment to manufacture machine parts for Rs 5,600,000. The equipment was expected to be useful for 5 years and an estimated residual value of Rs

280,000. The equipment is expected to manufacture 350,000 parts. It manufactured 105,000 parts in year 1; 84,000 in year 2; 21,000 in year 3; 112,000 in year 4 and 28,000 parts in year 5.

Required:

Compute the depreciation expense for each year under the following methods:
(a) Straight-line;(b)Written-down-value;(c)Productionunits

Milliken uses a digitally controlled dyer for placing intricate patterns on manufactured carpet squares for home and commercial use. It is purchased for $400,000. Its market value will be $310,000 at the end of the 1st year and drop by $48,000 per year thereafter to a minimum of $30,000. Operating costs are $20,000 the 1st year, increasing by 10% per year. Maintenance costs are only $8,000 the 1st year but will increase by 32% each year thereafter. Milliken’s MARR is 18%. Determine the optimum replacement interval for the dyer in years.

Answer the following questions. Polk Products is considering an investment project with the following cash flows:

The company’s cost of capital is 10%, and it can get an unlimited amount of capital at that cost.

What is the modified internal rate of return (MIRR) for the Project?

Select one:

a. 15.77%

b. 10.80%

c. 10.18%

d. 6.03%

e. 8.54%

An individual initially deposits $4,000 into an account that pays interest at 8% per year compounded quarterly. A $200 deposit is made in the first month of the second year with deposits increasing by $40 per month until the end of the third year. Beginning in the first month of the fifth year, withdrawals of $100 per month are taken out of the account until the end of the fifth year. Compute the amount of money in the account to the nearest cent immediately after the last withdrawal in year five.

A) Anthony invested $35,000 in Quanta three years ago. Quanta's value increased by -6.80% in the 1st year, -8.00% in the 2nd year, and 6.80% in the third year. how much does he have now?

B) Brandon invested $31,000 into principal financial three years ago. principal financial's value increased by 6.60% in the 1st year, 10.80% in the 2nd year, and -7.50% in the third year. what has been his gross holding period rate of return

Suppose that you could buy a one-year bond today, which has an interest rate of 3%. If you wait a year and buy a one-year bond then, the interest rate will be 4%. Two years from now, a one-year bond is expected to offer an interest rate of 5%. According to the expectations theory of the term structure of interest rates, what is the interest rate on a two-year bond today? What is the interest rate on a three-year bond today?