Suppose an investor can purchase a 20 year, 5% coupon bond that pays interest semi annually and the price of the bond is 97%. The Par Amount is $100. The yield to maturity is 5.95%. Assume the investor can reinvest the coupon payments at an annual rate of 3%. The bond is only held for 5 years and sold at 89%. Compute the following:
What is the Total Coupon plus Interest on Interest in Dollars?
What is the (Total Interest on Interest) component in Dollars?
What is the Total Rate of Return (in percent) on this bond when sold after 5 years?
What is the Total Accounting Rate of Return (semiannual equivalent) in percent?
In: Finance
|
Potential Gross Income 100,000 sq. ft for the coming year |
||
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average rent $15.00 per ft. |
$ 1,500,000 |
|
|
Less Vacancy Allowance (average 8%) |
$ (120,000) |
|
|
Effective Gross Income |
$ 1,380,000 |
|
|
Cleaning expenses (5% of net rev) |
$ (69,000) |
|
|
Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft. |
$ (80,000) |
|
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Management & Maintenance (11% of revenue) |
$ (151,800) |
|
|
Reserve for Replacement (savings for major repairs) |
$ (50,000) |
|
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Property Taxes ($0.10 per $100 of R.C.) |
$ (4,000) |
|
|
$ (354,800) |
||
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Estimated Net Operating Income |
$ 1,025,200 |
|
What is the NPV of this investment at a discount rate of 12% ? (use purcahse price of $9,500,000)
In: Finance
Question 6 – 8 refer to prospect H and K below
? = ($100, 0.4; $200, 0.6) ? = ($120, ?; $300, 1 − ?)
6. ?V(?) = ?V(?). What value of p makes this statement true?
7. Carol owns prospect H and is interested in selling it. Her utility of wealth function is given by ?(?) = ?^0.5. What is the lowest price for which Carol would be willing to sell prospect H?
8. True or False: The lowest value of K is greater than the lowest value of H, and the highest value of K is greater than the highest value of H, so everyone – regardless of risk preferences – will prefer K to H.
In: Economics
Taku-Tau company has provided you with the following information:
Selling price per unit = N$90
Variable cost per unit= N$30
Activity driver Cost driver rate Level of activity driver
Set-ups N$ 800 90
Inspection N$ 65 500
Other data:
Total fixed costs (traditional) N$900 000
Total fixed costs (ABC) N$450 000
If the company reduces the setup costs by N$100 per set up and reduces the number of inspections needed to 400, how many units must be sold to break even?
In: Accounting
A company produces 100 items of Product X and 1500 items of Product Y. Someone suggested to the management to try and focus on producing only one product instead of two. The Management is not sure which product would be more viable for them to produce as they currently adopt a Traditional Costing system, hence both products have the same cost price. You were asked to suggest an alternative way of computing costs, thus being able to direct the Management Team as to which product it would be more viable to produce and thus maximize profits. Discuss further. You may include a practical example to substantiate your argument.
In: Accounting
8. The price p (in dollars) and the demand x for a particular wool sweater are related by the equation p = 100 − 0.025x a. Find the domain of this function. Show all work and clearly label the answer below. b. Find the revenue R (x) = x · p , from the sale of x wool sweaters and state the domain of the function R (x) . c. Find the marginal revenue at a production level of 1,600 sweaters and interpret the results. Show all work and clearly label the answer below. d. Find the marginal revenue at a production level of 2,500 sweaters and interpret the results. Show all work and clearly label the answer below.
In: Math
In: Economics
Quantity | Total fixed cost, TFC (dollars) | Total variable cost, TVC (dollars) |
0 | 500 | 0 |
1 | 500 | 100 |
2 | 500 | 180 |
3 | 500 | 220 |
4 | 500 | 300 |
5 | 500 | 390 |
6 | 500 | 500 |
7 | 500 | 640 |
8 | 500 | 800 |
9 | 500 | 1000 |
10 | 500 | 1250 |
11. The table above shows some of the costs for a perfectly competitive firm. If the price is $160 per unit, how many units of output will the firm produce?
A) 8
B) 9
C) 10
D) more than 10
In: Economics
A perfectly competitive firm faces a market-determined price
of $25 for its product.
(1) (2) (3) (4) (5) (6) (7)
Quantity
Total cost
Average total cost
Marginal cost
Marginal revenue
Profit margin
0 1000 100 2000 200 3300 300 4800 400 7000 500 9600
a. The firm’s total costs are given in the schedule above. Fill in
columns 3 and 4 for average total cost and marginal cost. b. Fill
in columns 5 and 6 for marginal revenue and profit margin. c. How
much output should the competitive firm produce? Explain.
In: Economics
You manage a donut shop that sells two goods – donuts and coffee. You also face two types of customers – customer type A and customer type B, and you see 100 customers of each type. Their respective values for the 2 goods you sell are:
|
Type A |
Type B |
|
|
Donut |
$3 |
$2 |
|
Coffee |
$8 |
$3 |
If you sell donuts and coffee separately, what prices should you charge for each?
Donuts: $______________
Coffee: $______________
If you sell the 2 goods together as a bundle, what price should you charge for the bundle?
Bundle: $_______________
ANSWERS IN BOLD ONLY TO RECEIVE RATING. THANKS!
In: Economics