2. A firm is evaluating two projects. The firm's cost of capital (appropriate discount rate) has been determined to be 9%, and the projects have the following initial investments and cash flows: Project Q P 50 000 Project Y P 48 000 Initial Investment: Cash Flows: 1 P 20 000 P 30 000 2 25 000 35 000 3 15 000 40 000 4 20 000 10 000 Which project should the company pursue? Why

Q: For the second question, were you able to show how that problem would be worked out?

A: The par value is stated in the corporate charter and the company cannot issue shares below the par…

Q: Important Factors to Consider When Building a TCO Model Example of a TCO Model?

A: TCO model or Total Cost Ownership Model is an model used to estimate the cost of product or a…

Q: Explain Matching Principles?

A: Matching concept is an accounting principle which explains the need to match revenue with the…

Q: How to choose a Benchmark?

A: Investors select a market index (or a mix of indices) as the portfolio's benchmark. An index…

Q: Explain materiality , happens and why these are important? Explain with the help of example.

A: Materiality refers to the concept of determining whether a particular item, transaction, or…

Q: Distinguish between reverse engineering and reengineering.

A:

Q: Illustrates how you may obtain the true IRR by using the Goal Seek function?

A: IRR refers to the rate of return at which the net present value of a project is zero. This is the…

Q: Explain about the Black–Scholes model.

A: Black Scholes option pricing model is probably the most commonly used option pricing model in…

Q: What would be the equasion for solving this

A: Formula for calculating yearly payment: Yearly payment=(Loan amount * Rate%)1-1(1+Rate%)n

Q: How do you explain or interpret predictive model information?

A: Meaning- Predictive Model As the name suggest, where with the help of historical figures or even…

Q: Can you solve using excel and explain the formulas more in depth?

A: Here,Market Cap is 300 billion pesoNext Year FCF is 9.6 billion pesoGrowth Rate is 8.60%

Q: Explain the PSA prepayment model?

A: What Is a Prepayment Model? In lending, a prepayment model is used to estimate the level of…

Q: can you show formulas used to solve this problem?

A: The concept of the time value of money determines that the worth of money gets depreciated over a…

Q: What is the concept behind the EOQ model?

A: Economic Order Quantity (EOQ) Model: It is a method of inventory costing that aims to identify the…

Q: Explain FLSA and its purpose.

A: FLSA stands for fair Labor Standards Act. It is an act that aims at protecting the interest of…

Q: Explain the process followed and the result

A: The process followed here is the calculation of the Economic Order Quantity (EOQ), which is a…

Q: Explain subsequent events and why these are important? Explain with the help of example.

A: Subsequent events refer to events or transactions that occur after the balance sheet date but before…

Q: Write out the equation for the CML and explain its meaning.

A: After the investment in different securities, portfolio is prepared which describe the overall…

Q: What is the full form of ERP? Explain ERP with examples?

A: ERP means Enterprise Resource Planning, it is a process management software used by organizations to…

Q: Can you explain DCF model?

A: Introduction Discounted cash flows: DCF is abbreviated as discounted cash flows. The concept of…

Q: how to learn CAPM model?

A: In order to increase the return and reduce the risk, investors generally adding some securities to…

Q: Can you please do this problem using an equation.

A: Compound interest is nothing but interest on interest. That means interest is calculated on the…

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.