Assume you have purchased a contract for 25,000 British pounds for $35,000. Your margin requirement is $2,000. If the value of a pound increases by 0.01, what is your percentage profit? a) 10% b) 12.5% c) 15% d) 8% e) None of the above.
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- Your storage firm has been offered $95,400 in one year to store some goods for one year. Assume your costs are $96,700, payable immediately, and the cost of capital is 8.4%. Should you take the contract? The NPV Will Be $______ (Round to the nearest cent)Suppose you want to short-sell 1 share of BRK.A which is traded at $600,000 (i.e., Berkshire Hathaway). The initial margin required is 50% and the maintenance margin is 30%. At what price level you would receive a margin call? 650,000 640,000 690,000 620,000Arable Ltd has calculated the net present value of a tractor to be: 4% £30,000 20% (£20,000) I Calculate the internal rate of return of the tractor. A 13.6% B) 9.696 C) 4.8% D 16.0%
- Suppose you sell a fixed asset for $112,000 when its book value is $112,000. If your company's marginal tax rate is 21 percent, what will be the effect on cash flows of this sale (i.e., what will be the after-tax cash flow of this sale)? Multiple Choice $112,000 $0 $68,320 $34,720Suppose you sell a fixed asset for $10,000 when its book value is $2,000. If your company's marginal tax rate is 21 percent, what will be the effect on cash flows of this sale (i.e., what will be the after - tax cash flow of this sale )? Multiple Choice $3, 680 $8, 320 $420 $6,500Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ product s revenue/ product v0 (150,000) outlay (150000) outlay1 14000 150002 24000 253333 44000 520004 84000 63333 Calculate NPV of both products (to 1 d.p.) assuming a discount rate of 7%. Then decide which product should be selected and why ?
- An investor buys 5 future contracts on gold at the MCX.Each contract is for 100 gms. The contract price is Rs 30550 per10 gms. The tick size is Re 1. The initial margin is 4% while minimum margin is 90% of the initial margin. a. What is the minimum change in the value of the contract? b. What is the initial margin? C. At what price level the investor will have a margin call?You are preparing to produce some goods for sale. You will sell them in one year and you will incur costs of $79,000 immediately. If your cost of capital is 7.2%, what is the minimum dollar amount you need to sell the goods for in order for this to be a non-negative NPV? The minimum dollar amount is $ (Round to the nearest dollar) COO6. A machine could be purchased for £800,000; it would be used for 3 years and then sold for £580,000. It would qualify for capital allowances at 18% reducing balance basis with a balancing allowance or charge on disposal. The company pays tax at 20% and has a cost of capital of 10%. What is the present value of the tax cashflow at time 1, to the nearest £100? A £14,700 B £26,200 C £28,800 D £144,000
- What could be the solution to the attached?Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ product s revenue/ product v0 (150,000) outlay (150000) outlay1 14000 150002 24000 253333 44000 520004 84000 63333 Calculate the IRR for Product V only using 1% and 17% to 2 d.p.10