a. How much cash do they need as a down payment? b. Their bank account pays 8% compounded quarterly. If they delay starting the project for two years, how much would they have to save each quarter to make the required down payment if the loan rate and estimated cost remains the same?

Q: Consider a position of two purchased calls (AT&T, three months, K30) and one written put (AT&T,…

A: Delta is a commonly used Greek letter in options trading to represent the sensitivity of an option's…

Q: Define geometric-gradient-series?

A: When there is a change in the cash flows series whether it is positive or negative then the series…

Q: Compare IRR with MIRR method

A: Internal Rate of Return (IRR) is the rate at which the present value of expected cash inflows is…

Q: Describe in words how an NPV profile is constructed. How do you determine the intercepts for the x…

A: NPV profile means the graph which depicts the Net present value of the project at various discount…

Q: EBIT

A: EBIT is a measure used by companies to calculate their overall profitability. EBIT stands for…

Q: Set out and explain the function of the p/e ratio

A: P/E ratio is a vital valuation ratio used in relative valuation methods. The function of pe ratio…

Q: What are the cell #s in the NPV formula?

A: The difference between the present value of cash inflows and the present value of cash outflows over…

Q: What is factoring?

A: Accounts receivable: It can be defined as the amount owed by the customers from the business for the…

Q: In linear regression, compare independent and dependent variables.

A: Linear regression refers to a time series model in statistics that is used for predictive analysis.…

Q: Define the term predictive value.

A: Predictive value refers to the fact that quality financial information can be used to base…

Q: Define correlation

A: Correlation: Correlation is a statistical method that can display whether and just how strongly…

Q: Define Factoring.

A: Accounts Receivable: It refers to the amount of money due to the company from the debtors.

Q: What is Monte Carlo simulation analysis?

A: Answer: Monte Carlo simulation is the methodology used to consider the financial, cost, and project…

Q: Describe the Scatterplot Method

A: The objective of the question is to understand the Scatterplot method, which is a graphical…

Q: Define conversion ratio

A: Ratios are used in financial analysis to determine different aspects about the financial condition…

Q: Explain when to use the single-period model and when to use a multi-period model.

A: The difference between the two models is that the multi-period model may involve the stock leftovers…

Q: what formula did you use to calculate PVIFA?

A: The acronym PVIFA stands for the present value interest factor. The present value interest factor is…

Q: IRR analysis is based on the

A: IRR (internal rate of return) is one of the capital budgeting techniques that is used in order to…

Q: Explain a linear cost function.

A: A function where the cost depends linearly upon the number of units produced is called a linear cost…

Q: Explain quick ratio

A: The formula to compute quick ratio as follows:

Q: How to determine the appropriate signs (i.e., + or -) for the values of PV, FV, and PMT when…

A: Present Value is the value of an investment in present terms i.e. value today. Future Value is the…

Q: Describe the process of calculating NPV.

A: Net Present Value (NPV) is a capital budgeting technique which uses a discount rate to bring all the…

Q: Can you explain the formula for computing APR?

A: APR stands for Annual Percentage Rate and denotes the annual rate of interest on a loan or an…

Q: The linear kos function is written by the equation Y = a + bX. of the equation, X represents.....

A: Linear functions can be defined as the graph that is a straight line with equation of: Y = a = bX. A…

Q: How did you compute what the "R" value was in the equation?

A: IRR is the internal rate of return and is the break even rate of return at present value of cash…

Q: Define estimates.

A: Estimates are future predictions of something. For example at the beginning of the year a business…

Q: List and describe the components of a SWOT analysis.

A: When an organization aims to study and understand the environment in which it operates, it performs…

Q: how did you caluclate the table value?

A: In the context of the given question, we are required to compute the table value of factor annuity.…

Q: What is a cross rate?

A: Cross rate is an exchange rate of currency between two countries, but both countries are not using…

Q: Please explain when you would use the following equation and also explain what each variable…

A: Annuity is number of payments which are equal in size and made in equal interval of time.

Q: How is the Quick Ratio calculated?

A: Definition:   Quick ratio: The financial ratio which evaluates the ability of a company to pay off…

Q: What is the formula to calculate CAPM Req. Return

A: CAPM The financial model that helps investors to calculate the return from an asset is known as…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.