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Finance Questions and Answers March 16, 2023

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Quantitative Problem: You are given the following probability distribution for CHC Enterprises: State of Economy Probability Rate of return 0.2 22% Strong Normal 0.45 10% Weak 0.35 -5% What is the stock's expected return? Round your answer to 2 decimal places. Do not round intermediate calculations. % What is the stock's standard deviation? Round
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the inflation rate for the next 10 years is 17% per year, what hourly rate of pay in 10 years will be equivalent to $15 per hour today? (Round your answer to 2 decimal places.) Equivalent hourly rate $1 per hour
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Suppose that today you buy an 8% annual coupon bond for $1,105. The bond has 10 years to maturity. Two years from now, the YTM on your bond has declined by 1%, and you decide to sell. What price will your bond sell for? What is the holding period return on your investment

Judy's Boutique Just paid an annual dividend of $3.55 on its common stock. The firm increases its dividend by 3, the current stock price is $43.24 per share? percent annuallWhat the company s ost ot euit Multiple Choice 12.05% 11.11% 12.47% 11.43% 11.76% Countess Corp. is expected to pay an annual dividend of $5.11 on its common stock in one year.
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1. A 20-year security has a price of $966.53. The security pays $50 at the end of each of the next 5 years, $100 at the end of years 6-10, and then it pays a different fixed cash flow amount at the end of each of the following 5 years (i.e., years 11-15). Finally, in years 16-20 it again pays$100 per year at year end. Interest rates are 6.0%. What

Can you please provide the explanation, formula and correct answer for the problem above? CCV Inc. forecasts that its free cash flow in the coming year, i.e., at t=1, will be $0, but its FCF at t=2 and t=3 will be $15 million and $30 million respectively. After Year 3,FCF is expected to grow at a constant rate of 5% per year forever. The firm's
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You would like to borrow $52,000 from your credit union to purchase a new vehicle. You can afford to make monthly payments of $975, but no more. Assuming monthly compounding, what is the highest rate (annual) you can afford on a 5-year loan? How much total interest (in dollars) will you pay over the life of the loan?

Interest rate fundamentals: The real rate of return Carl Foster, a trainee at an investment banking firm, is trying to get an idea of what real rate of return investors are expecting in today's marketplace. He has looked up the rate paid on 3-month US Treasury bills and found it to be 3.9%. He has decided to use the recent rate of change in the
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Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform a. Asset and cost surgery b. selective product and market pruning c. piecemeal productivity improvements d. global expansion

5. A define-benefit pension fund has following holdings in their fixed-income portfolio: Bond Credit Coupon Rate Modified Convexity Market Maturity (yr) Rating Duration Value of Position A US Treasury 3.1 0.3 2.738 9.8 B 1 9.8 7.5 6.452 56.2 + C Aa2 5. 2 11.5 3. 733 18.5 $50,000 $50,000 $50,000 $50,000 $50,000 $250,000 D 6.7 9.8 4. 874 32.3 Agency
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7. Which of the following statements is CORRECT? Secondary markets are markets in which corporations raise capital by issuing new securities. Primary markets are markets in which securities and other financial assets are traded among investors after they have been issued by corporations Derivative securities are those financial assets their values
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Sharp Ltd is an information technology company based in Cape Town. The company has 484 000 ordinary shares listed on the Johannesburg Stock Exchange (JSE). Given their small size they are seeking to expand their operations to the other parts of South Africa, doing this would require a total of R100 million. The Chief Financial Officer has decided
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Question 1 Forward contracts a) Consider the results of Tender 1804 held on 24th June, 2022 for Government of Ghana Securities to be issued on 27 th June, 2022 are: 91-Day bill interest rate 25.6383% p.a.; 182-Day bill interest rate 26.4008% p.a.; i. What is the implied 91-Day Treasury bill rate 91 days from June 24, 2022? ii. Explain what you

2. Calculate the present value for payments of $3,500, $4,000, and $9,000 received in years 9, 10, and 11, respectively, with an interest of 5%

You've observed the following returns on Pine Computer's stock over the past five years: 8 percent, -12 percent, 14 percent, 21 percent, and 16 percent. The average inflation rate over this period was 3.1 percent and the average T-bill rate over the period was 4.1 percent. a. What was the average real risk-free rate over this time period? Note: Do
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(Quantitative Question) The Scampini Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are below. The firm's
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3. A $500,000 mortgage is amortized over 25 years with monthly payments at an interest rate of 4% compounded semi-annually. a. (3 Marks) Find the size of the regular monthly payment (round up to the nearest cent) and the size of the final smaller payment. b. (1 Mark) What is the total interest paid over the 25-year life of the mortgage? C. (1
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What is the relationship between Net Present Value and Discounted Cash Flow analysis? Are they the same? In what ways are they different? How can a clear understanding of the relationship between NPV and DCF help us to better understand how to value an asset?

Formulating Financial Statements from Raw Data and Calculating Ratios Following is selected financial information from General Mills Inc, for its fiscal year ended May 27,2018 ( $ millions). * Cash from financing activities includes the effects of foreign exchange rate fluctuations. ** Total liabilities includes redeemable interest. a. Prepare the
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Free cash flow ( FCF ) is defined as follows: F C F = EBIT ( 1 - T ) Depreciation and Amortization Capital expenditures required to sustain operations Required changes in net operating working capital. Free cash flow ( FCF ) is defined as follows: F C F = EBIT ( 1 - T ) + Depreciation and Amortization + Capital expenditures. Net cash provided (
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Suppose your company needs $11 million to build a new assembly line. Your target debtequity ratio is .35. The flotation cost for new equity is 7 percent, but the flotation cost for debt is only 4 percent. Your boss has decided to fund the project by borrowing money because the flotation costs are lower and the needed funds are relatively small.
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Venture Bank's balance sheet balance sheet is given below. Assume that Demand deposit does not pay any interest. Further assume that the annual payment from 10-year commercial and industrial Ioan loan will be $9 million over the next one year, out of which \$7 million will be principal payment and $2 million will be interest payment. What is the
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Study Abroad: Paris to Moscow. On your summer study abroad program in Europe you stay an extra two weeks to travel from Paris to Moscow. You leave Paris with 2,500 euros (EUR) in your belt pack. Wanting to exchange all of these for Russian rubles (RUB), you obtain the following quotes Spot rate on the dollar/euro exchange rate Spot rate on the
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Capital Budgeting (25 marks) The Owner of Gates Farm Pty Ltd in Outapi wants to invest in either one of the two irrigation machines, Machine A and Machine B. Due to the Donation option condition offered by USAID, the farm can only choose one machine. Further, the firms policy of depreciating all the farming equipment is based on a straight-line

Show all keystrokes to receive full credit for correct answers (only partial credit will be given for incomplete answers without any keystrokes or steps). For example: PV- FV- I/Y N- Compounding (For questions 10-13). How much would you have to invest today to receive 10. $36,000 in 10 years at 3 percent? 11. $45,000 in 5 years at 6 percent? 12.
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The July 31, Year 3, balance sheets of two companies that are parties to a business combination are as follows: Red Corp. Carrying Amount $1,630,000 1,116,000 Current assets Property, plant, and equipment (net) Patents Current liabilities Long-term debt Common shares Retained earnings $2,746,000 $1,390,000 483,000 750,000 123,000 $2,746,000 View
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12. Century fund had average daily assets of $19.5 billion in 2017. The fund sold S2 billion worth of stock and purchased $3 billion worth of stock during the year. The fund's turnover ratio is B. C. D. 10.26% 15.38% 25.00% 25.64%
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You would like to contribute $50,000 towards your grandchilds college education 15 years from now. How much money must you set aside today for this purpose if you believe you can earn 7% per annum on your investment? (Show calculation) You are considering purchasing a 15-year 8% unsecured bond at a price of $960: How much is the bonds face value?

Problem 7-7 A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a long-term government and corporate bond fund, and the third is a T-bill money market fund that yields a rate of 8%. The probability distribution of the risky funds is as follows: Expected Return 24% 12 Standard Deviation 30% 19 Stock
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** please use your own words don't copy and paste**** **** please don't use handwriting ***** Q2. What can happen if a firm is poorly managed? (1 mark) Q3. If the expected inflation rate is 10 percent and the real rate of interest is 4 percent: Compute the nominal rate of interest. (Hint: use equation 2.1) (0.5 mark) Briefly differentiate between

eBook eBook Financing Deficit Stevens Textile Corporation's 2021 financial statements are shown below: Balance Sheet as of December 31, 2021 (Thousands of Dollars) Cash $ 1,080 Accounts payable Receivables 6,480 Accruals Inventories 9,000 Line of credit Total current assets $16,560 Notes payable Net fixed assets 12,600 Total current liabilities
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Suppose you are the risk manager of a Swiss beer exporter that regularly sells in the United States. The mission of your department is to minimize currency exposure, using currency futures and currency options. On the 18th of September, 2021, you received a purchase order for 50,000 barrels of beer from a U.S. wholesaler at a wholesale price of
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The explicit costs, such as the legal expenses, associated with corporate default are classified as: unlevered costs of capital debt flotation costs. Indirect bankruty costs bets conversion costs direct costs of financial distress
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You have just purchased a $250,000 home, and the bank has quoted you an interest rate of 3% on a 25-year mortgage. You chose to make 24 payments per year. What periodic rate should you use to calculate the mortgage payments? Express your answer in percentage form rounded to four decimal places
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McCann Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $850 2 1,080 3 1,250 4 1,110 a. If the discount rate is 9 percent, what is the present value of these cash flows? b. What is the present value at 19 percent? c. What is the present value at 26 percent?

Consider an asset that costs $125,000 and is depreciated straight-line to zero over its 5-year tax life. The asset is to be used in a 4-year project. At the end of the project the asset can be sold for $35,000. The tax rate is 21 percent. What is the after-tax salvage value? n Select one a $38,196 m O b. $25,242 O c. $35,000 O d. $35,500 O e.
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American Plumbing Products, based in New Jersey, imports copper from Peru Copper Co., a reliable and long time supplier based in Lima, Peru. Payment is in Peru sol (symbol is "S/"), with a current exchange rate of S/4.00/$; American Plumbing is concerned that changes in the exchange rate could have cause its costs to rise. Given that trading
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Say that on a recent day, Digital Toilet Paper (DTP) stock closed at $55.19 per share, down $.05 on the day. Consider the following chart giving the premium as of close of trading on that day, on various options on Digital Toilet Paper stock: a. What was the premium on the July 19 DTP 47.50 call, i.e., the Digital Toilet Paper call which expires
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What is the present value of $11,000 received: a. Twenty four years from today when the interest rate is 7% per year? b. Twelve years from today when the interest rate is 4% per year? c. Six years from today when the interest rate is 3% per year? a. Twenty four years from today when the interest rate is 7% per year? The present value of $11,000
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Juanita is considering the purchase of a Porsche Boxster and has negotiated a final price of $48,100. She's trying to decide whether to lease or purchase the vehide. If she leases, she'll have to pay a $500 security deposit, a capital cost reduction (down payment) equal to 10% of the vehicle's cost, and monthly payments of $652 over the four-year
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View Policies Current Attempt in Progress An investment opportunity requires a payment of $990 for 12 years, starting a year from today. If your required rate of return is 10.0 percent, what is the value of the investment to you today? (Round factor values to 4 decimal places, eg. 1.2514 and final answer to 2 decimal places, e8. 15.25 Present
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The case study: How BMW dealt with exchange rate risk The story. BMW Group, owner of the BMW, Mini and Rolls-Royce brands, has been based in Munich since its founding in 1916. But by 2011, only 17 per cent of the cars it sold were bought in Germany. In recent years, China has become BMWs fastest-growing market, accounting for 14 per cent of BMWs

QUESTION 7 ume the company's tax rate is 34 percent. Debt 7,500. 8.4 percent coupon bonds outstanding $1,000 par value, 22 years to maturity, selling for 103 percent of par, the bonds make semiannual payments Common stock: 195,000 shares outstanding, selling for $78 per share, beta is 1.21 Preferred stock: 11,000 shares of 6.35 percent preferred
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Nick and Alex had been married for eight years. Six years ago, they bought their first home for $500,000. They have one son named Joe. Last year, Nick passed away. His will left everything to his son. The value of the home at Nicks death was $800,000. Assume, at the time of the purchase of the home, Nick contributed $300,000 and Alex contributed

In light of 1982, Johnson & Johnson's Tylenol crisis: A) Which aspects of the Tylenol crisis demonstrate a short-term perspective? B) Which aspects of the Tylenol crisis show the value of a longer-term perspective 4:55 pm
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Your landscaping company can lease a truck for $8,600 a year (paid at year-end) for 6 years. It can instead buy the truck for $42,000. The truck will be valueless after 6 years. The interest rate your company can earn on its funds is 7%. What is the present value of the cost of leasing? Note: Do not round intermediate calculations. Round your

short answer 1. The exchange rate for money entering Mexico is $1=10.80 pesos. During your visit to Mexico the exchange rate changes to $1=15.00 pesos. If you took $500 into the country exchanged it for pesos and then left with 500 pesos, how many dollars worth of pesos would you have when you exchanged it back into dollars? 1. The exchange rate
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Some recent financial statements for Smolira Golf Corp. follow. Assets 2017 2018 Current assets Cash Accounts receivable Inventory $ 24,076 12,748 25,742 SMOLIRA GOLF CORP. 2017 and 2018 Balance Sheets Liabilities and Owners' Equity 2018 2017 Current liabilities $ 24,400 Accounts payable $ 23,484 15,500 Notes payable 13,000 2 7,400 Other 11,871 $
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I have saved $3,587 for a down payment on a new car. Suppose I am provided with the terms of the loan call for five equal end of year installments of $4,059. Assuming that the interest rate is 5.87%, how much am I paying for this car? (PS. Don't forget to add the down payemnt to the amount you calatuate.) O $28,256.70 O $23,466.12 O $20,745.62

firm is considering investing in a project with the cash fows shown below, that the required rate of returm on projects of this risk classis 8 percent, and thar the masimum and discounted payback statistic for the project are 2 and 3 years, respectively Cash Flow 120 520 Use the Pl decision rule to evaluate this project, should it be accepted or
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The regression output is provided below with corresponding standard errors in parentheses kids = -7.731 +0.1974 -0.09y76 -0.0678 -0.08y80 -0.42y82 -0.65y84 -0.135educ +0.277age -0.0055age? +0.88black (1.101) (0.171) (0.171) (0.182) (0.188) (0.175) (0.173) (0.20) (0.111) (0.001) (0.177) R?=0.114 Given the below critical values fill in the blanks
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Describe the two tools commonly used to evaluate an organizations external and internal situation.

Delta Corporation has the following capital structure: Cost (aftertax)WeightsWeighted CostDebt (K d )5.5%25%1.38%Preferred stock ( K p )10.5252.63Common equity ( K e ) (retained earnings)10.5505.25Weighted average cost of capital ( K a ) 9.25% If the firm has $26 million in retained earnings, at what size capital structure will the firm run out of

New-Project Analysis intermediote calculotions. Round your answers to the neorest dollar. a. What is the Year-o net cash flow? 5 b. What are the nek optrating cash flows in Years 1,2 , and 3 ? Year 1:% Year 2:; Year 3if 6. What is the additisnal Year-3 cash flow (l.e, the after-tax salvage and the return of working capital)? 5 d. If the project's
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Assign the range In cell B24, enter a lookup function that looks up the value of cell A24, from the range named SurxexRange to supply the name of the question found in column 2. The result should be an exact match. Use the appropriate mixed reference for the lookup value. In cell C24, enter a lookup function that looks up the value of cell A24,
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What is the cost of equity for a firm with a beta of 1.5 when the risk-free interest rate is 6% and the expected return on the market portfolio is 14%?

1. For a good capital decision criterion, please match the following: (10 Marks) Adjust time value of money, Adjust for risks, Creating Value for the firm With NPV, Pay Back Period, IRR, Average Accounting Return, Profitability Index
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1. While CCC was started 40 years ago, its common stock has been publicly traded for the past 25 years. 2. The returns on its equity are calculated as arithmetic returns. 3. The historical returns for CCC for 2014 to 2018 are: Given the preceding data, the average realized return on cCC's stock is The preceding data series represents of CCC's
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General information 1 . 1 Study the task carefully. 1 . 2 Note the mark and time allocations per sub - task and for the task as a whole. 1 . 3 Note the assessment date ( s ) . 1 . 4 Study the resources required carefully. 1 . 5 Use the assessment tool as guidance on how your work will be marked. 1 . 6 You are required to provide proof that you

Cherry Pickings Farms Inc. is considering whether to borrow funds to purchase a machine for cherry picking or lease the asset under an operating lease arrangement. The lease would be from the local leasing store with annual lease payments, payable at the beginning of each of the next five years of $9,500. (Five years is the time horizon for the
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I got 3,000 contracts needed for part A. need help with parts b. through d. please and thank you!! 13*. [4 Points) Your bond portfolio is worth $300,000,000. You expect the interest rates to increase by 1.5% (i.e., Ay = 0.015). The futures price for a Treasury note futures contract is 105 (per 100) and each contract is for the delivery of bonds
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Your parents have recently taken out a 20-year loan for $400,000 towards a home renovation project. They've asked you to help them with their finances given your recent completion of the Finance course. The loan payments are quarterly (every 3 months). The APR is 12%, compounded quarterly. Your parents have asked you to calculate the quarterly and

Consider the following companys balance sheet and income statement. Balance Sheet Assets Liabilities and Equity Cash $ 10,000 Accounts payable $ 31,000 Accounts receivable 72,000 Notes payable 25,000 Inventory 53,000 Total current assets 135,000 Total current liabilities 56,000 Fixed assets 81,000 Long-term debt 30,000 Equity 130,000 Total assets

Suppose a five-year, $1,000 bond with annual coupons has a price of $900.82 and a yield to maturity of 6.3%. What is the bond's coupon rate?

Retro Co is considering new project. Company currently installs devices, putting contact points on access portals and movement sensors in general areas of a property. The new project is in the fire alarm business, a business considered to be similar in many ways to what Retro Co currently does. A internship student of the Finance Department has
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Colsen Communications is trying to estimate the first-year cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project: Sales revenues $5 million Operating costs (excluding depreciation) 3.5 million Depreciation 1 million Interest expense 1 million The company has a 40% tax rate, and its

need help solving please tell me by step by step. Michom most advisers Wales to spend no more than 20% of one's grossmont income for one's payment and to spend more than one's only incomfort unos mal income $32.400 appropriate computation to determine whether the family can orda 3720.000 euro tentorage Choose the corredare below On They cannot
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Suppose that the price of Asset X at close of trading yesterday was $300 and its volatility was estimated as 1.3% per day. The price of X at the close of trading today is $298. Suppose further that the price of Asset Y at the close of trading yesterday was $8, its volatility was estimated as 1.5% per day, and its correlation with X was estimated

ASSIGNMENT 2 1. The following table shows the one-year return distribution of Startup, Inc. Probability 40% 20% 20% 10% 10% Return -100%-75%-50%-25% 1000% Calculate a. The expected return. b. The standard deviation of the return. 2. The figure below shows the one-year return distribution for RCS stock. 35 30 25 20 15 10 -25% -10% 0% 10% 25% Return
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The company has 30,000 shares of common stock outstanding, each currently trading at \$22.1. What is the price-earnings ratio? Part 3 What is the book value per share? Part 4 What is the market/book ratio
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What is the impact of specific dollar amount of dividend on the binomial tree? What is (are) disadvantage(s) of resulting tree. How do you get around this problem.

- A project has projected sales of 25,600 units with a selling price of $4.95 each. Annual fixed costs are $31,000 with variable costs of $2.18 per unit. The project has a three-year life and requires an initial investment of $62,900 for equipment. The equipment will be depreciated straight-line to zero over three years. The tax rate is 34%. What

Last year, Eleanor and Felix Knight bought a home with a dwelling replacement value of $330,000 and insured it (via an HO-5 policy) for $277,000. The policy reimburses for actual cash value and has a $500 deductible, standard limits for coverage items, and no scheduled property. Recently, burglars broke into the house and stole a 4-year-old
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Rates of return ( annualized ) in two investment portfolios are compared over the last 1 2 quarters. They are considered similar in safety, but portfolio B is advertised as being less volatile. ( a ) At \ alpha = 0 . 0 2 5 , does the sample show that portfolio A has significantly greater variance in rates of return than portfolio B ? ( b ) At \

At times firms will need to decide if they want to continue to use their current equipment or replace the equipment with newer equipment. The company will need to do replacement analysis to determine which option is the best financial decision for the company. LoRusso Co. is considering replacing an existing piece of equipment. The project

Question 2 (9 marks) A Canadian equity mutual fund buys 1 million shares of a denominated common stock for a holding period of 6 months. The relevant information for this investment is as follows: Current price per share = 50 Expected price per share after 6 months = 52 Expected dividends per share at the end of 6 months = 1.2 Current exchange
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Two firms, A and B, both produce widgets. The price of widgets is $1 each. Firm A has total fixed costs of $500,000 and variable costs of 50 per widget. Firm B has total fixed costs of $240,000 and variable costs of 75 per widget. The corporate tax rate is 40%. If the economy is strong, each firm will sell 1,200,000 widgets. If the economy enters

6. The payback period The payback method helps firms establish and identify a maximum acceptable payback period that helps in their capital budgeting decisions. Consider the case of Cold Goose Metal Works Inc.: Cold Goose Metal Works Inc. is a small firm, and several of its managers are worried about how soon the firm will be able to recover its
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What should be the value of a stock that pays dividends in one year of $1.10 and is expected to grow at a constant rate of 10% from that point if the risk of such stock calls for a 14% discount? $25.00 $27.50 $30.00 $32.50 $35.00

Find the future values of these ordinary annuities. Compounding occurs once a year. Round your answers to the nearest cen a. $800 per year for 10 years at 12%. b. $400 per year for 5 years at 6%. $ c. $700 per year for 14 years at 0%. $ Rework previous parts assuming that they are annuities due. Round your answers to the nearest cent. d. $800 per
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Consider the following two univariate time series models; y_t=0.5y_(t-1)+u_t (1) y_t=0.5u_(t-1)+u_t (2) What classes of model does each belong to and what are the main differences between the two models. Sketch the Autocorrelation function (ACF) and the Partial Autocorrelation function (PACF) for each process. Write down the one-step ahead

need answers for a,b,c,d The risk-free rate is currently 7.6%. Use the dala in the accompanying table for the Fio family's porffolio and the market portiolio during the year just ended to answer the questions that follow (Click on the icon here pi in order to copy the contents of the data table below into a spreadsheet) a. Calculate Starpo's
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Bank A offers a savings account with an effective interest rate of 4.68%. Bank B wants to offer a competing account with interest compounded 12 times per year that has the same effective interest rate as Bank A. What nominal (quoted) interest rate (per annum) does Bank B have to offer? (Express your answer in percentage form rounded to three

Please use the following table to answer subsequent questions. Assume 7% cost of capital for both projects. (Numbers in parenthesis means outflow). Year Cash flow for Project X Cash flow for Project Y 0 ($32,000) ($32,000) 1 23,000 33,000 2 N 44,000 (44,000) 3 (27,000) 52,000 What is the present values of outflows for projects X? Please report
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Suppose that you buy 8%, 2-year bonds for $1,036.67 when they yield 6%. At the end of the year, they still yield 6%. Show that if you continue to hold the bond until maturity, your return in each of the two years will also be 6%
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Q13 A In a fixed exchange rate regime, the government has the responsibility to maintain the exchange rate at a certain level. Explain why B Explain how shareholders can motivate managers to accept the prescriptions of the MRA model. Give examples.

You can buy a property today for $3.4 million and sell it in 6 years for $4.4 million. (You earn no rental income on the property.) a. If the interest rate is 10%, what is the present value of the sales price? Note: Do not round intermediate calculations. Enter your answer in millions rounded to 3 decimal places. b. Is the property investment

6 Your firm has an ROE of 128% a payout rato of 28%,$566,300 of stockholders equity, and $389, coo of debt If you grow at your sustainable growth fate this yoar, how much additonal debt will you need to iswe? chapter and hi these protlems in antipation of the retien of atandard depreciation practices during your careor. The siatainable groser rate
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Suppose Intel stock has a beta of 0.83 , whereas Boeing stock has a beta of 1.15 . If the risk-free interest rate is 3.9% and the expected return of the market portfolio is 11.2%, according to the CAPM, a. What is the expected return of Intel stock? b. What is the expected return of Boeing stock? c. What is the beta of a portfolio that consists of
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You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $50,000. The truck falls into the MACRS 3-year class, is not eligible for either bonus depreciation or Section 179 expensing, and it will be sold after three years for $19,400. Use of the truck will require an increase in
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1- Briefly describe the three models used to compute the price of a common stock. 2- Briefly explain the theory of rational expectations and the adaptive expectations. 3- Why the efficient market hypothesis does not imply that financial markets are efficient? 4- How valuable are published reports by investment advisors? 5- What is a financial

One-year Treasury bills currently earn 2.90 percent. You expect that one year from now, 1-year Treasury bill rates will increase to 3.10 percent and that two years from now, 1-year Treasury bill rates will increase to 3.60 percent. The liquidity premium on 2-year securities is 0.05 percent and on 3-year securities is 0.15 percent. If the liquidity

USE THE FOLLOWING INFORMATION FOR QUESTIONS 21-22 NextGen Electronics Inc is analyzing a proposed project. The company expects to sell 2.000 smartphones. The expected variable cost per unit is $250 and the expected fixed costs are $620.000. The depreciation expense is $100,000. The sales price is estimated at $750 per unit. The tax rates 30
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Excel Online Structured Activity: Amortization schedule The data on a loan has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. Complete an amortization schedule for a $30,000 loan to be repaid in equal installments at the end of each
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Yneteceiniz bir portfy hakknda size aadaki bilgiler verilir. Uzun vadede ykseliyorsunuz, ancak piyasann nmzdeki ay debileceini dnyorsunuz. Portfy Deeri: 1 milyon dolar Portfy Betas: 0.60 Mevcut S&P 500 deeri: 1400 Beklenen S&P 500 Deeri: 1200 S&P 500'de 200 puanlk bir d iin vadeli ilem pozisyonunun deeri ne kadar deiir? 100.000 Dolar B. 200.000

LanTech I.T. obtained a $86350 loan at 6.5% compounded annually to add more hardware to their gaming facility. Monthly payments were calculated to amortize the loan over nine years. Fill in the partial amortization schedule showing details of the first two payments, Payments 43 and 44, and the last two payments. (Round answer to 2 decimal places)
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Chuck Wells is planning to buy a Winnebago motor home. The listed price is $155,000. Chuck can get a secured add-on interest loan from his bank at 7.45% for as long as 60 months if he pays 15% down. Chuck's goal is to keep his payments below $3,600 per month and amortize the loan in 42 months. (a) Find Chuck's monthly payment in $) with these
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Further From Center has 12,100 shares of common stock outstanding at a price of $55 per share. It also has 310 shares of preferred stock outstanding at a price of $91 per share. There are 370 bonds outstanding that have a coupon rate of 7.4 percent paid semiannually. The bonds mature in 36 years, have a face value of $2,000, and sell at 111.5
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Steady Company's stock has a beta of 0.18. If the risk-free rate is 5.8% and the market risk premium is 7.1%, what is an estimate of Steady Company's cost of equity? Steady's cost of equity capital is %. (Round to one decimal place.)
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On the day you enter college you borrow $18,000 from your local bank. The terms of the loan include an interest rate of 5.75 percent. The terms stipulate that the principle is due in full one year after you graduate. Interest is to be paid annually at the end of each year. Assume that you complete college in four years. How much total interest

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