35. A man wishes to bequeath to his daughter P20,000 ten years from now. What amount should he invest now if it will earn interest of 8% compounded annually during the first 5 years and 12% quarterly during the next 5 years?
Q: Question 7 What is the other name for fim-specific risk? O Systematic risk O Market risk O Micro-cap…
A: Risk includes the likelihood of losing some or all of the original investment. Business risks refer…
Q: The method of comparators can be applied using the ratio of operating income to revenue as a basis…
A: Operating Income is an accounting number that measures the amount of operating profit for a company…
Q: Omega company has the following capital structure as at 31st December 2020: Ordinary share…
A: Preferred shareholders would be given priority over equity shareholders in receiving the dividend…
Q: Two mutually exclusive investment projects have the following forecasted cash flows: Year A B 0…
A: The projects or investments are termed to be mutually exclusive when the acceptance given for one…
Q: A man invests in a project that requires a fixed capital of P 2.5 M with no salvage, and life of 12…
A: The period in which the initial investment is recovered is known as the pay-out period. It is…
Q: Patrick makes payments of $250 per month at the end of each month. At the end of 10 years, he wants…
A: The rate of interest required to have the desired amount can be calculated with the help of rate…
Q: The capital asset pricing model (CAPM) The constant–growth model Compute forward-looking expected…
A: The capital asset pricing model (CAPM) The Capital Asset Pricing Model (CAPM) alludes to the…
Q: To help purchase his new minivan, Ahmad is taking out a s26,000 amortized loan for 6 years at 5.2%…
A: Given:
Q: Q7-2. Will an investor earn more if interest is compounded semiannually or if the investment pays…
A: Time value of money (TVM) is used to measure the value of money at different point of time in the…
Q: Suppose Capital One is advertising a 60-month, 5.14% APR motorcycle loan. If you need to borrow…
A: The monthly payment can be calculated with the help of present value of annuity function.
Q: Flounder Company's net income for 2020 is $672,000, and 91.000 shares of common stock were issued…
A: The diluted earning per share is used to measure a company's earning per share by assuming that all…
Q: Determine appropriate hedging and risk management strategies using a mix of underlying and…
A: Derivatives are financial instruments whose values are derived from other assets such as stocks,…
Q: Quèstion 12 What is the covariance of returns between stocks A and B? Expected retum of A is 30% and…
A: Data given: Expected return of A =30% Expected return of B = 23.333333% Year Return A Return B…
Q: Your friend is currently paying $734 in rent monthly in Fort Wayne and would rather apply the…
A: We need to use excel PV function to calculate amount borrow or loan value. The formula is…
Q: Mr. Hernandez wants to provide a series of 18 yearly allowance for his 1-year old daughter starting…
A: Present worth will be the difference between total present worth of cash inflows and total present…
Q: Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. The…
A: Solution : Money Market Hedge help a domestic company in reducing the exchange rate and currency…
Q: Identify methods for using and analysing working capital cycles ( max. 300 words
A: Step 1 It takes time for the Working Capital Cycle (WCC) to turn all current assets (such as shares…
Q: 2.Brian invests $15,500, at 6% interest, compounded semiannually for 2 years. Manually calculate the…
A: Investment (PV) = $15500 Interest rate = 6% Semi annual rate (r) = 6%/2 = 3% Period = 2 Years Semi…
Q: What is the retum on equity (RoE) If a 3x levered asset returns 10% assuming 7% borrowing cost?…
A: Leverage = 3 Return on assets (ROA) = 10%
Q: 2. The current price on a stock is 240 lei and the expected dividend equals 11 lei per share. One…
A: Effective return implies for the actual profit that an investor receives after considering all…
Q: A loan of $6000 is being repaid with quarterly installments of P at the end of each quarter for 5…
A: Given, Loan amount is $6000 Term of loan is 5 years rate is 12% Payment is made quarterly.
Q: Student E saves his allowance worth of P 25,000 and promised to use it only when it reaches the…
A: Present value (PV) = P 25,000 Future value (FV) = P 45,000 Interest rate = 8% Quarterly interest…
Q: BHP Billiton, An Australian company’s stock, has a beta of 0.90. The expected return on the market…
A: Value of firm is calculated by discounting all future expected free cash flows to present using WACC…
Q: 8. Nichols Inc. is considering a project that has the following cash flow data. What is the…
A: The internal rate of return (IRR) is a financial metric that is used to evaluate the profitability…
Q: Manly Company issued $400,000 of 9%, 10-year bonds at 102. Interest is paid annually, and the…
A: Bonds are defined as financial instruments used by companies to raise additional funds from the…
Q: Maintenance cost of a machine is S 100 during the second year and to increase by $ 100 every year…
A: Here we will use the present equivalent conversion factor. The maintenance cost of a machine here…
Q: To estimate the total price for a project, we need to consider 5 requirements to develop the…
A: Pricing is referred as the process of decision making, which helps in establishing the value of…
Q: Case, Part 1: Velma, a 59-year-old minority woman who works as a teacher, contacts you about getting…
A: Adjustable-rate mortgage (ARM)-is a type of mortgage that starts with a fixed interest rate (usually…
Q: This is an amortized loan, because its payments contain: O Only the principal that must be repaid…
A: An amortized loan is that loan in which scheduled periodic payments are made. The payments are made…
Q: The least risky capital market security is a.preferred stock. b.common stock. c.corporate bonds.…
A: The primary purpose of capital markets is to offer financial products like stocks and bonds. Stocks…
Q: How does the following contributed to capital market a) Information disclosure b)Liberalisation…
A: A financial market seems to be a place where consumers trade financial securities including bonds,…
Q: What critical success factors should all investment films involved in stockbroking and asset…
A: Asset management involves the practice of collecting, maintaining, and trading investments with the…
Q: Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. The…
A: Solution : Money Market Hedge is that technique which provide the protection against loss which…
Q: Evan and Emmanuel want to buy a $250,000 home. They plan to pay 15% as a down payment, and take out…
A: Cost of House is $250,000 Down payment is 15% Term of loan is 30 years Interest rate is 4.9% To…
Q: 5-year project will require an investment of $100 million. This comprises of plant and machinery…
A: NPV is the difference between present value of cash inflows and initial investment. NPV =PV of all…
Q: If $800 is borrowed and the interest after 6 months is $44, what is the annual interest rate for a…
A: Principal Amount = $800 Time Period = 6 Months Interest = $44
Q: Omega company has the following capital structure as at 31st December 2020: Ordinary share…
A: We will first calculate the cost of each source of capital individually and then we will multiply it…
Q: What is the price of a Treasury STRIPS with a face value of $100 that matures in 15 years and has a…
A: Formula Price = FV/(1+R)N Where FV - Face value i.e. $100 R - Yield rate i.e. 7.0% N - Period i.e.…
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery…
A: Cost of equity With current market price (P), next year dividend (D1) and constant growth rate in…
Q: 14.Mariah invested $10,000 in a bank certificate of deposit at a rate of 5% interest compounded…
A: Investment (PV) = $10,000 Interest rate (r) = 5% Period (n) = 3 Years
Q: Suppose you buy a one-year forward contract at $65. At expiration, the spot price is $73. The…
A: Value of the contract at expiration = Spot price - Futures price * e-(risk free rate * Time to…
Q: Juliana has contributed $2,787.00 every six months for the last 14 years into an RRSP fund. The…
A: Future worth is the amount that an investor expects from the cash flows in each period. Future worth…
Q: fter tax annual cost
A: Cash flow represents the money in and out of the company. It refers to the financial statement that…
Q: A corporation uses a type of motor truck which costs P 250,000, with life of 2 years and final…
A: The annual cost method helps in comparing two different projects having different periods. The…
Q: Net present value f
A: Net present value refers to the difference between the net cash inflows and cash outflows in a…
Q: When Reserve Bank actions cause interest rates on newly issued bonds to decrease from 6% to 5%, the…
A: Government bond is referred as the debt security, which are issued by the government in order to…
Q: 16. Lancaster Corp is considering two equally risky, mutually exclusive projects, both of which have…
A: IRR of project A = 11% IRR of project B = 14% Crossover rate = 8%
Q: In 2019, Americans spent on average $166 on Valentine's Day which is an increase of 18% from the…
A: To find out expenditure on valentine day in prior period, we need the following equation Expenditure…
Q: Ratio Analysis A. Chen Company has current assets equal to P5,000,000. Of these, P1,000,000 is cash,…
A: Solution :1 Current Ratio : Current Assets / Current Liabilities Current Ratio…
Q: A stock currently sells for 50 and can rise by 6 or fall by 4 for each of the next two periods. The…
A: Current market price Values at the end of period one Values at the end of period two Value of call…
Step by step
Solved in 3 steps
- A man wishes his son to receive P250,000 ten years from now. What amount should he invest if it will earn an interest of 10% compounded annually during the first 5 years and 12% compounded quarterly during the next 5 years?A friend who owns a perpetuity that promises to pay $1,000 at the end of each year, forever, comes to you and offers to sell you all of the payments to be received after the 25th year for a price of $1,001. At an interest rate of 10%, should you pay the $1,000 today to receive payment numbers 26 and onwards? What does this suggest to you about the value of perpetual payments?A father wishes to bequeath to this daughter 20,000 ten years from now. If he invest an amount earning interest rate of 8% compounded annually during the first five years and 12% compounded semi annually during the next five years,determine: a. what amount should he invest now?
- Gyutaro wishes his sister to receive P600,000.00 twelve years from now. What amount should he invest now if it will earn interest of 12% compounded annually during the first 5 years, 15% compound quarterly during the next 5 years P159,311.01 P175,771.31 P163,041.83 P171,698.76Iris expects to receive $1,000 at the end of each of the next three years. She will deposit these payments into an account that pays 10%, compounded semi-annually. What will be the future value of these payments, that is, the value at the end of the third year? a. $3,318.01 b. $1,340.10 c. $1,157.63 d. $1,331.002. A friend who owns a perpetuity that promises to pay $1,000 at the end of each year,forever, comes to you and offers to sell you all of the payments to be received after the25th year for a price of $1,000. At an interest rate of 10%, should you pay the $1,000today to receive payment numbers 26 and onwards? What does this suggest to youabout the value of perpetual payments?
- 4. Mr. Thomas will receive $8,500 a year for the next 15 years from her trust. If a 7 percent interest rate is applied, what is the current value of the future payments if first receipt occurs today?8. An amount of P 250,000 is deposited now into a savings account that earns 8% per year. This amount will take care for the yearly allotment of a grandmother until shedies. The first allotment will be one year after the deposit is made. How much can thegrandmother withdraw every year?Mae expects to receive $1,000 at the end of each of the next three years. She will deposit these payments into an account which pays 10%, compounded semi-annually. How much will be the future value of these payments, that is, the value at the end of the third year? a. $7,986.00 b. $3,318.01 c. $3,993.00 d. $665.50
- Krissie wishes to bestow her youngest son Bim P200,000 ten years from now. What amount should she invest now if it will earn interest of 6% compounded annually during the first 5 years and 8% compounded quarterly during the next 5 years?Mo will receive a perpetuity of $34,000 per year forever, while curly will receive the same annual payment for the next 50 years. If the interest rate is 7.8% how much more are Mo's payments worth? 1. $10,706.21 2. $9,559.11 3. $9,877.55 4. $9,081.16 5. $10,196.39 Please show step by step calculation I am having difficulty understanding this question. Only typing answerAn employee wants to retire and receive P 5 000 a month. She wants to pass this monthly payment to future generations after her death. She can earn an interest of 8% compounded annually? How much will she need to set aside to achieve her perpetuity goal?