QUESTION 2) (Ch5.7) Would you rather receive $1000 a year for 10 years or $800 a year for 15 years ifa.) The interest rate is 5%b.) the interest rate is 20% Here we are looking at comparing PV of Annuities. Option 1: PMT = 1000 1. PVAn=PMT*PVIFAn,i = PVAn = PMT*[1/i 1/(i*(1 i)^N)] PVA10 = […]
Date: September 2nd, 2020
QUESTION Companys shares have a market value of 120 million and a beta of 1.5. It currently has risk-free debt as well. The firm decides to change its capital structure by issuing 30 million in additional risk-free debt, and then using this 30 million to repurchase stock.a) With perf A) The current beta is 1.5, […]
Date: September 2nd, 2020
QUESTION On the last day of the accounting period, a donor makes a permanently restricted donation of $1 million. How would this transaction affect the financial statements that will be prepared (vis-a-vis last periods statements)?A. the balance sheet would be affected, and the statement of operations would If $1 million is added at the end […]
Date: September 2nd, 2020
QUESTION Last year Oliver Inc. had a total assets turnover of 1.60 and an equity multiplier of 1.85. Its sales were $200.000 and its net income was $10.000. The CFO believes that the company could have operated more efficiently, lowered its costs, and increased its net income by $5,000 without changing its s Computing the […]
Date: September 2nd, 2020
QUESTION Please show formulas usedAssuming that the MARR is 10% and there are 3 equal-lived, mutually exclusive revenue projects with NPVs of $10,000, $20,000, and $30,000, which one(s) do you accept? Minimum Accepted Rate of Return = 10% 3 Mutually exclusive revenue projects with NPVs = $10,000 $20,000 $30,000 According to the NPV rule all […]
Date: September 2nd, 2020
QUESTION Sidmans products stock is currently selling for $60 per share. The firm is expected to earn $5.40 per share this year and to pay a year-end dividend of $3.60.a. If investors require a 9% return what rate of growth must be expected for Sidman?b. If Sidman reinvests earnings in projects with an aver a. […]
Date: September 2nd, 2020
QUESTION 2. The present worth of a multi-year investment with all positive cash flows (incomes) other than the initial investment is PW = $25,000 at MARR = (i+1)%. If MARR changes to (i-1)%, the present worth will be(a) less than $25,000(b) equal to $25,000(c) greater than $25,000(d) cannot determine without (a) Less than $25,000 If […]
Date: September 2nd, 2020
QUESTION How long will it take $ 200 to double if it earns the following rates? Compounding occurs once a year.a.7%b.10%c. 18%d. 100% ANSWER: CLICK REQUEST FOR AN EXPERT SOLUTION
Date: September 2nd, 2020
QUESTION In Year 2011, you decide to get a loan of $350,000 at annual interest rate of 3.545% and to pay back monthly for 15 years.Monthly interest = 0.03545 / 12After paying the February 15, 2022, monthly mortgage, you see a refinance opportunity due to lower interest rate, how much loan amount you need to […]
Date: September 2nd, 2020
QUESTION Find the future vales of the following ordinary annuities:a. FV of $400 paid each 6 months for 5 years at a nominal rate of 12 %, compounded semiannually.b. FV of $200 paid each 3 months for 5 years at a nominal rate of 12%, compounded quarterlyc. These annuities receive the same amount of cash […]
Date: September 2nd, 2020
