Company ABC Ltd. is the manufacturer automobile parts and working in this sector since last 60...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Company ABC Ltd. is the manufacturer automobile parts and working in this sector since last 60 years. This company has a total assets of 98 million Rupees. The company's accounting information indicates that these assets are financed with 60% debt and 40% equity. The company has adopted different ways to generate capital. Both preferred and common stocks are issued by the company, also different types of bonds are sold by this company to accomplish capital requirements. Furthermore loan from financial institution has also been taken by the company for 40 million Rupees. The company has obtained a loan of Rs.3 million from a financial institution. For this purpose it has to deposit Rs.400, 000 at the end of each year. The company also wishes to analyze its cash position after 8 years if it deposit Rs.400, 000 at the end of each year and the expected average interest rate of market is 14% compounded annually. Company's financial manager has also shared an investment plan with the CEO of company in which he highlighted that certain Financial Institutions offer to pay Rs.5000000 after 7 years. Currently interest rate charged by these institutions is observed as 19%, 20% and 18% compounded annually. Therefore there is also need to calculate how much amount company need to deposit today to receive this 5 million after 7 years against each rate. Company ABC Ltd. is the manufacturer automobile parts and working in this sector since last 60 years. This company has a total assets of 98 million Rupees. The company's accounting information indicates that these assets are financed with 60% debt and 40% equity. The company has adopted different ways to generate capital. Both preferred and common stocks are issued by the company, also different types of bonds are sold by this company to accomplish capital requirements. Furthermore loan from financial institution has also been taken by the company for 40 million Rupees. The company has obtained a loan of Rs.3 million from a financial institution. For this purpose it has to deposit Rs.400, 000 at the end of each year. The company also wishes to analyze its cash position after 8 years if it deposit Rs.400, 000 at the end of each year and the expected average interest rate of market is 14% compounded annually. Company's financial manager has also shared an investment plan with the CEO of company in which he highlighted that certain Financial Institutions offer to pay Rs.5000000 after 7 years. Currently interest rate charged by these institutions is observed as 19%, 20% and 18% compounded annually. Therefore there is also need to calculate how much amount company need to deposit today to receive this 5 million after 7 years against each rate.
Expert Answer:
Answer rating: 100% (QA)
Compound interest Amountprincipal1rate100time amount... View the full answer
Related Book For
Posted Date:
Students also viewed these corporate finance questions
-
A person deposits $1000 at the end of each year into an annuity earning 5% interest compounded annually? How many years are required for the balance to reach $30,539? After how many years will the...
-
A bond pays $100 at the end of each year for five years, plus an additional $1,000 when the bond matures at the end of five years. What is the most you would be willing to pay for this bond if your...
-
A woman deposits $15,000 at the end of each year for 9 years in an account paying 6% interest compounded annually. (a) Find the final amount she will have on deposit. (b) Her brother-in-law works in...
-
What minimum force f , applied horizontally to the wheel axis, is needed to bring the wheel up to the height step h ? Tomer as the wheel radius and w as its weight. Tip: apply the equilibrium...
-
Distinguish between the traditional, behavioral, and interactionist views of team conflict. How might each explain and treat a project team conflict episode?
-
Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) 2018 2019 ______2020 Pretax accounting...
-
Aroon is a valuable employee for his company, and he will receive a significant bonus. His employer has asked him to consider moving next year to a new company location in a different state. His...
-
Hampton Company is considering the addition of a new product to its cosmetics line. The company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. Relevant...
-
How do you think emerging technologies, such as artificial intelligence and blockchain, are shaping the future of e-commerce, and what potential impacts might they have on customer experiences and...
-
Keuka Studies does custom metal sculptures of horses and other animals. A horse sculpture is composed of numerous parts. They use a lathe to construct two types of parts. The Body part is used to...
-
The orbital radius of a satellite circling the Earth a. depends only on its mass and orbital speed b. depends only on its mass c. depends on its orbital speed d. is the same for all satellites e. is...
-
HI-TECH Electronics makes highly complex electronic test equipment for thePC and telecoms industry.HI-TECH has identified thatto remain competitive in the global market it needs to cut costs and...
-
At the end of the spring season, Comfy Shoes anticipates an increase in the demand to 50 customers per day. A change in the mix of packages demanded is also expected: 30% of the customers ask for...
-
Once you complete your mural, you will need to write a short reflection that describes and summarizes your work. Please address the following in your reflection: Describe what you chose to paint and...
-
Privacy Lost These Cell Phones Can Find You 1.What are benefit of using tracker? Mention any two? 2.What is the article main topic? 3. Who is the target in the article? why? I
-
Create a name and vision for your team Identify 3-5 team norms that will support your success? Why are these norms important? How will they support success? How will you implement them? What barriers...
-
A $150,000, 30-year interest-only mortgage, with a 5-year interest-only period, has an 8% interest rate, compounded monthly. During the 2nd year of the mortgage, assuming no prepayments, the required...
-
Given find the value of k. es 1 e kx dx = 1 4'
-
Comparative figures for Best Buy and RadioShack follow. Required 1. Compute inventory turnover for each company for the most recent two years shown. 2. Compute days sales in inventory for each...
-
At the end of the current year, the following information is available for both Caesar Company and Delta Company. Required 1. Compute the debt-to-equity ratio for both companies. 2. Comment on your...
-
Nintendo Company reports the following income statement accounts for the year ended March 31, 2008. (Japanese Yen in millions.) Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
-
Use Minitab to obtain the results of Tukey's test for the shear bond strength data from Example 1 in Section 13.1. Approach The steps for obtaining the results of Tukey's test using Minitab, Excel,...
-
Another scientist examines how the presence of a nonnative bird species, the starling, affects other species of birds. Is this a population-level study, a community-level study, or an ecosystem-level...
-
What is the function of the placenta?
Study smarter with the SolutionInn App