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Finance Questions and Answers April 30, 2016

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Slithering Snakes is considering adding a new product line that is expected to increase annual sales by $355,000 and cash expenses by $277.000. The Initial investment will require $385,000 in fixed assets that will be depreciated using the straight-line method to a zero book value over the five-year life of the project. The company has a marginal
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Question 24 As treasurer of Tucson Corp (a US exporter to New Zealand), you must decide how to hedge futu from now. Put options are available for a premium of $0.05 per unit and an exercise price of $0.5 the NZ$ in 180 days follows: Future spot rate Probability 0.60 70% 0.40 30% Given that you hedge your position with options, the probability that
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Marginal federal tax rate to use to prepare your 2016 tax returns in 2017 Rate Single Filers Head of Household Filers Married Joint Filers 10% $0 to 9,275 $0 to $13,250 $0 to $18,550 15% 59,276 to $37,650 $13,251 to $50.400 $18,551 to $75,300 25% $37,651 to $91,150 $50,401 to $130,150 $75,301 to $151,900 28% $91,151 to $190,150 $130,151 to
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3. You see the following three month swap quote for C$: $0.9650-60 20-25. Using this information, determine the three month outright forward rate for C$. 4. The Japanese yen () changed its price in terms of dollars from $0.0905 to $0.0915 in 30 days. (a) What is the percentage change in the price of ? (b) What is the implied percentage change in

Input area: 9. Calculating Project OCF [ LO1] Esfandairi Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.18 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worthless. The project is estimated to generate
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Assume that a bond will make payments every six months as shown on the following timeline (using six-month periods): Period 0 1 2 29 30 Cash Flows $19.78 $19.78 $19.78 $19.78 + $1,000 a. What is the maturity of the bond (in years)? b. What is the coupon rate (as a percentage)? c. What is the face value
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Company (Ticker) IOU (IOU) Suppose the following bond quotes for IOU Corporation appear in the financial page today's newspaper. Assume the bond has a face value of $2,000 and the current date April 19, 2021. Coupon 4.9 a. YTM b. Current yield Saved % % Help Save & Exit Submit Maturity April 19, 2037 Last Price Last Yield 105.83 ?? a. What is the
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the end of t Valuation fundamentals Personal Finance Problem Imagine that you are trying to evaluate the economics of purchasing a condominium to live in during college rather than renting an appartment. If you buy the condo, during each of the next 4 years you will have to pay property taxes and maintenance expeditures of about $6,000 per year,
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etisalat 3:14 PM Thursday Exercise.docx 1. Compare the alternatives shown below on the basis of a present worth comparison, using 1-10% per year compounded quarterly. Alt A Alt B First Cost Annual Cost ,S/yr Overhaul in yr 3,S Salvage Value,S Life ,yrs $15,000 $28,000 7,000 6,000 2,000 3,000 4 5,000 2. In building the landing strip at a small
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(Related to Checkpoint 12.1) (Comprehensive problem calculating proiect cash flows. NPV. PI, and IRR) Traid Winds Corporation, a firm in the 34 percent marginal tax bracket with a required rate of retum or discount rate of 15 percent is considering a new project. This project involves the introduction of a new product. The project is expected to
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1. what is differential return if the market return is 13%, the standard deviation of return is 5%, and standard deviation is the appropriate measure of risk? 2. what is the differential return if beta is the appropriate measure of risk? Here are data on five mutual funds: Fund A B TTI 0 0 Return 14 12 16 10 20 Standard Deviation 6 4 8 6 10 Beta
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Compare Operating Characteristics Across Industries Following are selected income statement and balance sheet data for companies in different industries: Required Compute the following ratios for each company Gross profit/ Sales Net income/Sales Net income/ Stockholders equity Liabilities/ Stockholders equity Cost of Goods Sold Net Income
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An investor desires to create a two-stock portfolio with zero risk. You are given: For Stock 1, the expected return is 12% and the volatility is 25%. For Stock 2, the expected return is 6% and the volatility is 15%. Stocks 1 and 2 are perfectly negatively correlated. Calculate the effective risk-free rate
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SOLVE WITH EXCEL FUNCTIONS It is studied between two methods to produce the case of a portable photoionization monitor made of hazardous material. One of the cases would be plastic and would require an initial investment of $ 75,000 and would have an annual operating cost of $ 27,000, with no salvage value after two years. An aluminum case would

10. Given the following information, what is balance of the Z class at the end of year 2? Select the best answer from the choices provided A CMO is being issued with 3 tranches. The A tranche will consist of S30M of principal and have a coupon of 6%. The B tranche will have a coupon of 6.25% and a principal of $15M. The Z tranche will carry a
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undefined D.7. Assume that five years ago the county borrowed $10,000,000 for a road construction pro gram. The existing loan is being repaid in 240 equal monthly installments, with interest o the unpaid balance at 0.5 percent per month compounded monthly. The sixtieth payment ha just been made. The source of the repayment funds is a gas tax,
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2. The binomial interest rate tree for valuing a bond with a maturity of up to four years is shown below. Attach/show your work a] Find the value of the option-free bond b] Find the value of the putable bond c] Find the value of the embedded put option Putable Bond Valuation Binomial Interest Rate Tree Years To Maturity4 Coupon Rate | 6.50%
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A private company has two debt covenants in place: Maximum debt - to - equity ratio. Current and long - term liabilities, excluding future income taxes, are divided by total shareholders equity. Minimum times - interest - earned ratio. Income before interest and taxes is divided by total interest expense.

FX SWAP transaction: Today Feb 11 2023, Party A is a Liberian and needs Leones. Party B is Sierra Leonian and needs Liberia Dollars. The parties enter into a foreign exchange swap today with a maturity of six months. They agree to swap 3,000,000 Leones, or equivalently 5,400,000 LDR at the spot rate of 1.8 Leone/LDR. They also agreed on a forward

The historical returns on a portfolio had an average return of 1 3 percent and a standard deviation of 1 6 percent. Assume that returns on this portfolio follow a bell - shaped distribution.
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12. Re-calculate equal monthly payment amount after taking into account KKDF and BSMV taxes. Tax rate is 20% a) 1.057 TL b) L.094 TL c) 1.198 TL d) 1.265 TL e) 1.343 TL 13. A machine was purchased for 60.000 TL Normal depreciation is used. If economic life of machine is 12 years. find the cumulative depreciation after 4 years. a) 5.000 TL b)
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Please provide the excel formulas as well Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.9 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life. The project is estimated to generate $2,190,000 in annual sales, with costs of
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3. Measuring stand-alone risk using realized (historical) data Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock. Consider the case of Happy Dog Soap Inc. (HDS): Five
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Interest Factors for the Present Value of One Dollar Time Period (e.g.
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What is the EUAW for Option Y, over a 12 year project life? The benefits reset to the first year benefit when a new machine is installed. Ignore any other costs apart from the capital recovery costs. Option Y Initial Cost $235,000 Life 6 Salvage 16% First year benefits $85,000 Increase in benefits per year $1,000 Rate 6% Around $20,600 Around

Problem 6-32 Credit Risk (L04) a. Several years ago, Castles in the Sand Inc issued bonds at face value of $1.000 at a yield to maturity of 5.2%. Now, with 5 years left until the maturity of the bonds, the company has run into hard times and the yield to maturity on the bonds has increased to 11%. What is the price of the bond now? (Assume
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a. Current ratio b. Operating return on assets c. Times interest earned d. Debt ratio e. Inventory turnover f. Average collection period g. Total asset turnover h. Fixed asset turnover 1. Operating profit margin j. Return on equity a. The current ratio is X. (Round to two decimal places.) Balance Sheet ($000) Cash Accounts receivable Inventories
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There is a European call option on the S\&P500 index. There are two months till maturity. The current value of the index is 3910 and the exercise price on the call is 3900 . The continuously compounded risk-free interest rate is 5%. The volatility of the index is 20% per annum and the annual dividend yield is 3%. How much would you be willing to
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Warren is an investor who believes that past variability of stocks is a reasonably good estimate of future risk associated with the stocks. Warren works on creating a new portfolio and has already purchased stock A. Now he considers two other stocks, B and C. Warren collected data on the historic rates of return for all three stocks, which are
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Overnight Publishing Company (OPC) has $3.4 million in excess cash. The firm plans to use this cash either to retire all of its outstanding debt or to repurchase equity. The firms debt is held by one institution that is willing to sell it back to OPC for $3.4 million. The institution will not charge OPC any transaction costs. Once OPC becomes an

Nanticoke Industries had the following operating results for 2020 : sales $22,800; cost of goods sold = $16,050; depreciation expense =$4,050; interest expense =$1,830; dividends paid =$1,300. At the beginning of the year, net assets were $13,650, current assets were $4,800, and current liabilities were $2,700. At the end of the year, net fixed
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What is the net present value of a project that has an initial cash outflow of SR34,900 and the following cash inflows YEAR1 SR12,500; YEAR2 SR19,700; YEAR3 SRO and YEAR4 SR10,400 ? The required return is 15.35 percent. O a.-SR3,383.25 O b. SR66,416.75 O C.-SR2,784.62 O d. SR52,311.08 O e. -SR2,481.53
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eBook Find the interest rates earned on each of the following. Round your answers to the nearest whole number. You borrow $740 and promise to pay back $777 at the end of 1 year. % You lend $740, and the borrower promises to pay you $777 at the end of 1 year. % You borrow $50,000 and promise to pay back $100,568 at the end of 5 years. % You borrow

It is now January 1, 2018, and you are considering the purchase of an outstanding bond that was issued on January 1, 2016. It has a 9.5% annual coupon and had a 30-year original maturity. (It matures on December 31, 2045.) There is 5 years of call protection (until December 31, 2020), after which time it can be called at 109-that is, at 109% of
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