GEND TELLDE 2 341 59001-5 9. Your friend Barbara has a bond that she would like...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
GEND TELLDE 2 341 59001-5 9. Your friend Barbara has a bond that she would like to sell to you. The bond matures in 10 years, has a face value of $1,000 and a coupon interest rate of 6% (paid annually). If you know that the yield to maturity on similar bonds is 8%, what is the maximum price you would be willing to pay for the bond? a $865.80 b. $940 C. $1000 d. $1,147.20 10. SAT-Corp. is considering the purchase of a new piece of machinery that will cost them $1,800,695 today (in 2010). This piece of machinery, however, will increase the company's after-tax cash flows by $500,000 in 2011, $750,000 in 2012, $1,000,000 in 2013. If SAT-Corp. 's discount rate (WACC) is 10%, then the NPV of making this purchase is a $449,305 b $243,896 © $25,000 d $1,760,00 11. What is the internal rate of return of a project costing $3,000, having after-tax cash flows of $1.500 in each of the two years of its two-year life; and a salvage value of $800at the end of the second year in addition to the $1.500 cash flow? (rounded to the nearest percentage) a 13% b 15% c. 16% d. 19% !! > iii S GEND TELLDE 2 341 59001-5 9. Your friend Barbara has a bond that she would like to sell to you. The bond matures in 10 years, has a face value of $1,000 and a coupon interest rate of 6% (paid annually). If you know that the yield to maturity on similar bonds is 8%, what is the maximum price you would be willing to pay for the bond? a $865.80 b. $940 C. $1000 d. $1,147.20 10. SAT-Corp. is considering the purchase of a new piece of machinery that will cost them $1,800,695 today (in 2010). This piece of machinery, however, will increase the company's after-tax cash flows by $500,000 in 2011, $750,000 in 2012, $1,000,000 in 2013. If SAT-Corp. 's discount rate (WACC) is 10%, then the NPV of making this purchase is a $449,305 b $243,896 © $25,000 d $1,760,00 11. What is the internal rate of return of a project costing $3,000, having after-tax cash flows of $1.500 in each of the two years of its two-year life; and a salvage value of $800at the end of the second year in addition to the $1.500 cash flow? (rounded to the nearest percentage) a 13% b 15% c. 16% d. 19% !! > iii S
Expert Answer:
Related Book For
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
Posted Date:
Students also viewed these finance questions
-
Following are income statements for Hossa Corporation for 20X1 and 20X2. Percentage of sales amounts are also shown for each operating expense item. Hossas income tax rate was 22% in 20X1 and 24% in...
-
Following are income statements for Hossa Corporation for 2017 and 2016. Percentage of sales amounts are also shown for each operating expense item. Hossas income tax rate was 38% in 2016 and 40% in...
-
Following are income statements for Lowes and The Home Depot for the years ended February 3, 2012, and January 29, 2012, respectively: Lowes (in millions) Net sales .................$50,208 Cost of...
-
1. For each of the following, compute the present value (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)): 2. For each of the following, compute...
-
A piece of experimental apparatus is located where g = 9.5 m/s2 and the temperature is 5C. An air flow inside the apparatus is determined by measuring the pressure drop across an orifice with a...
-
If the mass of cylinder C is 40 kg, determine the mass of cylinder A in order to hold the assembly in the position shown. D A E 30 Ho B 40 kg
-
If there are 20 pairs (x, y) in a data set, then the number of degrees of freedom for the critical value is _______________ . In Exercises 7 and 8, fill in each blank with the appropriate word or...
-
Company A uses the FIFO method to cost inventory, and Company B uses the LIFO method. The two companies are exactly alike except for the difference in inventory costing methods. Costs of inventory...
-
Lecture 8 spelled out the basic monetary trilemma for open economies. Of the three goals that most countries share independence in monetary policy, stability in the exchange rate, and the free...
-
Activity 1: Crossword Puzzle Across 4. Ratio measuring how expensive a company's stock price is compared to EPS (2 words) 6. Shares bought back from investors 7. Solvency ratio that measures how debt...
-
The term _ _ _ _ _ _ _ _ _ refers to a product or service that an organization's customers place a greater value on than similar offerings from a competitor. a. Leadership strength b. Competitive...
-
2. Write the equivalent assembly code if you were to translate from C to Assembly: for (i=0; i <10; i++) sum += i;
-
Following are transactions for Ridge Company. March 21 Accepted a $11,900, 180-day, 7% note from Tamara Jackson in granting a time extension on her past-due account receivable. September 17 Jackson...
-
You acquire raw material to make your product. Your supplier gives you 3 5 days to pay. o You manufacture your product in 3 0 days and have it ready to sell. However, your sales team takes 1 5...
-
One of the aspects of forensic science that can help solve crimes for years is biological evidence. Consider a crime scene that your team might have been called to this week. The supervisor of your...
-
Consider the isomerization of n-butane to iso-butane as a first order gas phase reaction with ideal gas behavior. A rate constant of 0.0015 min was found at 27 C. The activation energy is 25 kcal...
-
A company purchased land for $90,000 cash. Commissions of $12,000, property taxes of $12,500, and title insurance of $3,800 were also incurred. The $12,500 in property taxes includes $7,000 in back...
-
What can scientists learn by comparing the fossilized skeletons of extinct primates with the bones of modern species?
-
For several years, the Securities and Exchange Commission (SEC) has been considering whether to transition U.S. firms to International Financial Reporting Standards (IFRS) for filing public financial...
-
As discussed in the chapter, abnormal earnings (AE) are AEt = Actual earningst - Required or normal earningst which may be expressed as AEt = NOPATt - (r BVt-1) where NOPAT is the firms net...
-
Weaver, Inc., received a $60,000, six-month, 12% interest-bearing note from a customer. The note was discounted (sold) the same day to Third National Bank at 15%. Required: Compute the amount of cash...
-
What are the properties of instantaneous centre?
-
A chain with three links is shown in Fig.1.7. Prove that the chain is locked. 2 3 1 Fig.1.7 Three-bar chain
-
Differentiate between a mechanism and a machine.
Study smarter with the SolutionInn App