You invest in a 5-year bond (par=$1,000) with a coupon rate of 6%. The interest is paid annually, and its YTM is 4%. If you sell the bond one year later, what is your holding period return?

You are evaluating a corporate bond issued by National Fishing League (NFL). The NFL bond is a 4-year bond with a par value of $1 million. Its interest (coupon) payments are based on the following schedule: $50,000 in year 1, $60,000 in year 2, $70,000 in year 3, and $80,000 in year 4. You estimate NFL’s current interest rate is 6%. What is the price of the bond (in $MM)?

Select a home for your parents or a relative that you can imagine buying on Jan 1. They have asked you to create a amortization table on excel assuming a 20% down payment, 30 year fixed rate of 5%. Make sure to include spinners so you can calculate your payment and how much interest you will pay with 5%, 6% and 7% with a 20 year loan. Include the excel spreadsheet. Determine the payment for the 5% 30 year loan, 5% 20 year loan and a 20 year 6% and 7% loan. In year 1, they want to know the total interest paid for each of the 5 scenarios. Also, provide the outstanding balance due for each scenarios at the end of the first year. What are your recommendations

PLEASE DO PROBLEM

A machine can be purchased for $60,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied, using a five-year life and a zero salvage value.

Compute the machine’s payback period (ignore taxes). (Round your intermediate calculations to 3 decimal places and round payback period answer to 3 decimal places.)

A Company is considering a new product line to supplement its range line. It is anticipated that the new product line will involve cash investment of $700,000 at time 0 and $1.0 million in year 1. After-tax cash inflows of $500,000 are expected in year 2, $300,000 in year 3, $700,000 in year 4, and $400,000 each year thereafter through year 10. Though the product line might be viable after year 10, the company prefers to be conservative and end all calculations at that time.

a. If the required rate of return is 15 percent, what is the net present value of the project? Is it acceptable?

b. What is its internal rate of return?

c. What would be the case if the required rate of return was 10 percent?

d. What is the project’s payback period?

The estimated project cost, sales, rent, selling price and production and selling costs of the product of a new project are given below. Compute the NPV and payback period of the project. Assume the costs are incurred at the beginning of the year, zero depreciation, no taxes, and discount rate as 10%, Show all calculations.

During the current year, Ron and Anne sold the following assets:

$30,000 of the gain is 25 percent gain (from accumulated depreciation on the property)

Ignore the Net Investment Income Tax.

Given that Ron and Anne have a taxable income of $400,000 (all ordinary) before considering the tax effect of their asset sales, what is their gross tax liability for 2016 assuming they file a joint return?

Machine A has an initial cost of $19,500 and a salvage value of $7500 (today's value) at the end of its 12 year life.

Machine B has an initial cost of $17,900 and a salvage value of $2300 (today's value) at the end of it's 6 year life.

Inflation is 3.9%                                          

Don’t forget, we will need to increase the costs and salvage values by inflation for any transaction other than year 0.                                             

The company uses a MARR rate of 14%                                            

Benefits for machine A in year 1 are $5,250 and increase by 5.5% per year.                                                         

Benefits for machine B in year 1 are $5,400 and increase by 5.5% per year.                                                         

Costs for each machine start at $800 and increase with the inflation rate

A. Show the Cash flow table for these two machines over the project.                                  

B. What is the NPW, the EUAW and the IRR for both of these machines?

Use the information below to answer the question that follows.Sosiol Distan Singh the owner of Esquire Ltd is considering two technology investment options; Karantina and Barakoa which will require sh. 1,500,000 and sh. 200,000, respectively. The revenues for each option are as follows. Karantina (for year 1 to year 6) 100,000; 350,000; 450,000; 765,000; 1,335,000; 2,150,000. Barakoa (for year 1 to year 3) 300,000; 350,000; 500,000. The expenses increase yearly from the first year by 20% each subsequent year. The figures for expenses in the first year are sh. 150,000 and sh. 20,000 respectively. The rate of inflation is 12%.Required: Advise Mr. Singh which option he should take given: i. Payback period [2 marks] ii. NPV profiles (show your workings)

Smidt Corporation has provided the following data for its two most recent years of operation: Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 9 Direct labor $ 5 Variable manufacturing overhead $ 5 Fixed manufacturing overhead per year $ 140,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 5 Fixed selling and administrative expense per year $ 65,000 Year 1 Year 2 Units in beginning inventory 0 3,000 Units produced during the year 10,000 7,000 Units sold during the year 7,000 6,000 Units in ending inventory 3,000 4,000 The unit product cost under variable costing in Year 1 is closest to:

Your firm intends to purchase equipment today for $1 million (year 0). The equipment will be straight-line depreciated to a book value of $0 over 10 years (years 1-10). The project will last five years, generating revenues of $600,000 per year (years 1-5). Variable costs will equal a constant 30% of revenues. Fixed costs will equal $100,000 per year (years 1-5). Working capital equals 20% of next year's revenues. The equipment will be sold for $600,000 in year 6. The appropriate tax rate is 40% and the discount rate is 10%. What is the NPV of this project? Be sure to clearly state the relevant CFs each year between year 0 and year 6.

How do you figure out the Cash Flow Salvage value?