Gumil Co. plans to purchase a new machine for $600,000 with 12%, 5-year loan. Assume the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Gumil Co. plans to purchase a new machine for $600,000 with 12%, 5-year loan. Assume the installment payment would be made immediately. What is the annual payment? (PVIF 10%,5 -0.6209, PVIFA 10%,5 = 3.7908) 2. (10%) An investment portfolio includes stock A and B. The relevant figures are: Stock % of portfolio Beta Expected return standard deviation A 1.5 B 0.6 70% 30% (1) Which stock is riskier in terms of stand-alone risk? Which stock is riskier in terms of systematic risk? (2) What is the expected return of the portfolio? (3) What is the ß of the portfolio? 25% 8% 6% 3% Gumil Co. plans to purchase a new machine for $600,000 with 12%, 5-year loan. Assume the installment payment would be made immediately. What is the annual payment? (PVIF 10%,5 -0.6209, PVIFA 10%,5 = 3.7908) 2. (10%) An investment portfolio includes stock A and B. The relevant figures are: Stock % of portfolio Beta Expected return standard deviation A 1.5 B 0.6 70% 30% (1) Which stock is riskier in terms of stand-alone risk? Which stock is riskier in terms of systematic risk? (2) What is the expected return of the portfolio? (3) What is the ß of the portfolio? 25% 8% 6% 3%
Expert Answer:
Answer rating: 100% (QA)
1 Find the annual payment for the loan Annual Payment Loan Amount PVIFAr n Where r is the interest r... View the full answer
Related Book For
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0134141084
11th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, Ali R. Hassanlou, K. Suzanne Coombs
Posted Date:
Students also viewed these finance questions
-
From the following data, calculate the gross earnings for each of the five employees who are entitled to time-and-a-half for the greater of any hours exceeding 40 for the week or 8 in any given day....
-
A corporate taxpayer who is subject to a marginal tax rate of 30% is considering two, mutually exclusive, investments. Investment A is to purchase a new machine for a cost of $60,000 (can be fully...
-
LLLis a company that sells modern equipment. To purchase a new equipment for your company from LLL, you as a financial manager have narrowed down two equipment models which meet your performance...
-
If the interest rate on debt is lower than ROA, then a firm will Valitse yksi: a. increase ROE b. not change ROE c. none of these is correct d. decrease ROE e. change the ROE in an indeterminable...
-
The magnetic flux through a coil of wire containing two loops changes from -50 Wb to +38Wb in 0.42 s. What is the emf induced in the coil?
-
The temperature of flue gases flowing through the large stack of a boiler is measured by means of a thermocouple enclosed within a cylindrical tube as shown. The tube axis is oriented normal to the...
-
Source Today earned net income of \(\$ 60,000\) after deducting depreciation of \(\$ 4,000\) and all other expenses. Current assets decreased by \(\$ 3,000\), and current liabilities increased by...
-
Poitou-Chemises SARL manufactures shirts for retail chains. Armand Plessis, the accountant, is becoming increasingly disenchanted with Poitou-Chemises' six-month-old standard costing system. The...
-
The KLS Co. is expected to pay the following annual dividends for the next three years: $1.00, $1.50, and $1.60, respectively. After that time, they are expected to increase their dividends by 3%...
-
Assume the same data as in P20-15 and that Provincial Airlines Corp. has an incremental borrowing rate of 8%. Instructions Answer the following questions, rounding all numbers to the nearest dollar....
-
Animent Industries, Inc. (AII), developed standard costs for direct material and direct labor. In 2015, AII estimated the following standard costs for one of their major products, the 10-gallon...
-
Nelson Company reported cost of goods sold of $720,000 last year and $750,000 this year. Nelson also reported accounts payable of $260,000 last year and $240,000 this year. Compute this year's...
-
What is the basic elements of a distributive bargaining situation and integrative negotiation? Explore the strategy and tactics of integrative negotiation with the specific example.
-
Imagine you were a high-level manager for Toby Groves at his company prior to the "air loan" scandal. You earnestly want to save the company, save jobs, and help the company get out of this...
-
Determine an equation for the parabola that has a vertex at the point (1,2) and contains the point (3,-4). Then determine the y-coordinate for the point where the parabola intersects the y-axis.
-
Organization confrontation meetings and intergroup conflict resolution interventions share the objective of addressing workplace conflicts but differ in scope and focus. A confrontation meeting...
-
On January 1, Miller Construction Company contracted to build a parking lot for the city of St. Louis for $1.125,000. The following transactions and estimates relate to this contract. Construction...
-
Maria Castigliani is head of the purchasing department of Ambrosiana Merceti, a medium-sized construction company. One morning she walked into the office and said, The main problem in this office is...
-
Keegan is planning to buy a brand new truck. He plans to keep the truck for 3 years and then trade it in. He borrows $39 000 at 7.4% compounded semi-annually to purchase the truck. What monthly...
-
A 40-year old man from Bellville, Ontario, Derek Schwager received a great deal of online reaction after he won the Cash For Life draw and decided to take the $1.5 million lump sum payout rather than...
-
What rate of interest is required for $740.48 to earn $42.49 interest from September 10, 2017, to March 4, 2018?
-
A stirrer-container assembly contains a certain amount of fluid. The stirrer performs \(3 \mathrm{hp}\) work on the system. The heat developed by stirring is \(4000 \mathrm{~kJ} / \mathrm{h}\) and is...
-
Derive the mathematical expression of the first law of thermodynamics.
-
A system consisting of a gas confined in a cylinder undergoes a series of processes shown in Fig. 2.11. During the process A-1-B, \(70 \mathrm{~kJ}\) of heat is added while it does 45 \(\mathrm{kJ}\)...
Study smarter with the SolutionInn App