An investor has at most $10,000 to invest in government bonds, mutual funds, and money market funds. The average yields for the government bonds, mutual funds,and money market funds are 11%, 7%, and 14% respectively. The investor's policy requires that the total amount invested in mutual and money market funds notexceed the amount invested in government bonds. How much should be invested in each type of investment in order to maximize the return? What is the maximumreturn in the first year? SET UP on paper, then use EXCEL to solveHow much should be invested in government bonds?How much should be invested in mutual funds?How much should be invested in money market funds?What is the maximum return in the first year?

Let the amount invested in Government bonds be G, mutual funds be M and Money market funds be K. The…

Answered: An investor has at most $10,000 to…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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If all the individual land parcels in a new housing development are sold for $300,000 each, the developer projects total revenue from land sales will be $120 million. If the land lender requires that their $60 million land loan be completely paid off by the time that 75% of the individual land parcels have been sold, what would be the lender’s minimum release price for each parcel? a. $150,000 b. $200,000 c. $250,000 d.$300,000
Scutaro Company reported net income in 2025 of $30, 000 and $27,000 in 2024. On January 1, 2024, Scutaro issued 10-year, $200,000 face value, 6% bonds at par (payable annually on January 1). Each $1,000 bond is convertible into 30 shares of Scutaro S2 par value common stock. The company has had 10,000 shares of common stock (and no preferred stock) outstanding throughout its life. None of the bonds have been converted as of the end of 2025. Scutaro also has adopted a stock option plan that granted options to key executives to purchase 4,000 shares of the company's common stock. The options were granted on January 2, 2024, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company (the service period is 2 years). The options expired 6 years from the date of grant. The option price was set at $4. INSTRUCTIONS Prepare the journal entry Scutaro would have made on January 1, 2024, to record the issuance of the bonds. Prepare the journal entry to…
M-REITs, or mortgage REITs, primarily invest in real estate loans and mortgage-backed securities that are often below investment grade. When a mortgage REIT decided some years ago to re-securitize a substantial portion of its CMBS "BB" and "B" securities, it received surprisingly high investment grade ratings of "A" and "BBB" from Standard & Poor's on the new securities that were created from the cash flows of the underlying portfolio of non-investment grade rated securities. But when the financial markets began to fall a few months later, that mortgage REIT quickly went bankrupt and the value of its "A" and "BBB" investment grade rated re-securities fell substantially. The intended purpose of the ratings agencies is: To produce substantial profits for the rating agencies from the fees paid to them for giving higher ratings on investments than might otherwise be appropriate To help businesses and governments raise needed capital by providing them with the ratings they need to…
Please answer along with the excel formulas - 1. Sue now has $125. How much would she have after 8 years if she leaves it invested at 8.5% with annual compounding? $205.83 $216.67 $228.07 $240.08 $252.08 2. Suppose you have $1,500 and plan to purchase a 5-year certificate of deposit (CD) that pays 3.5% interest, compounded annually. How much will you have when the CD matures? $1,781.53 $1,870.61 $1,964.14 $2,062.34 $2,165.46 3. Last year Rocco Corporation's sales were $225 million. If sales grow at 6% per year, how large (in millions) will they be 5 years later? $271.74 $286.05 $301.10 $316.16 $331.96
Companies vary in the amount of information they disclose about their criteria for selecting capital investments. Access the websites of two companies— for example, Coca-Cola and International Paper. Find management’s discussion and analysis (also called the financial review), which precedes the presentation of the financial statements. In that section, find the discussion of capital investments. Which company provides the more in-depth discussion? Does either disclose its criteria for making capital investment decisions? Also, look at the investing activities listed in the statement of cash flows for each company. What is the extent of capital expenditures for each company? Compare each company’s capital investments with the amount of total assets on the balance sheet. Which company is more of a growth company? Explain your answer.
A borrower took out a $1,450,000 30-year fully amortizing conforming adjustable rate mortgage loan with an index of the one year U.S. Treasury and a 2.5% margin from the Wells Fargo Bank to buy a condo in Park City, Utah. The loan has a teaser rate of 1.5% for the first year, after which the interest rate resets annually with 2% annual and 6% lifetime interest rate increase caps, and the lender charges a one point loan origination fee and an additional $540 in closing costs to the borrower that are deducted from the loan proceeds at closing. On the first reset date, the one year U.S. Treasury rate was 4.75%. What would be the monthly payment for the second loan year? $6,511.15 $5,004.25 $6,337.97 $6,461.99
The Free Cash Flow model has the following advantage over the Dividend Growth model: In the case of variable growth, it does not require the calculation of any horizon value. It can be applied even if growth rates are unknown. It can be applied to companies with variable growth in the initial years that eventually settle down to a fixed rate of growth for the long term. It can be applied to divisions of companies. O It does not require any forecasting.
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Nippon Steel's expenses for heating and cooling a large manufacturing facility are expected to increase according to an arithmetic gradient beginning in year 2. If the cost is $550,000 this year (year 0) and will be $550,000 again in year 1, but then it is estimated to increase by $45,000 each year through year 12, what is the equivalent annual worth in years 1 to 12 of these energy costs at an interest rate of 11% per year? The equivalent annual worth is determined to be $
Assume that you recently graduated and have just reported to work as an investment advisor at the brokerage firm of Balik and Kiefer Inc. One of the firm’s clients is Michelle DellaTorre, a professional tennis player who has just come to the United States from Chile. DellaTorre is a highly ranked tennis player who would like to start a company to produce and market apparel she designs. She also expects to invest substantial amounts of money through Balik and Kiefer. DellaTorre is very bright, and she would like to understand in general terms what will happen to her money. Your boss has developed the following set of questions you must answer to explain the U.S. financial system to DellaTorre. Why is corporate finance important to all managers? Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.
The following is an excerpt from a business plan: "To open our new upscale toy store, We R Toys, we require a total of $225,000. The owners will be providing $100,000 of this amount from their own savings, and their friends and families have promised an additional $25,000. Therefore, We R Toys requires a bank loan of $100,000." In which section of We R Toys' business plan would this information be found? O Executive Summary O Sales Strategies Market Analysis O Financial Projections O Funding Requirements

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