Firms A, B, C, and D enter into a financial arrangement. Money flush firm A will pay expanding firms B and C each $1,000,000 today. B will pay D $2,200,000 three years from today. C will pay B $800,000 two years from today and D $350,000 two years from today. Finally, D will pay A $3,100,000 six years from today. Calculate the yield rate or interest rate, to the nearest hundredth of a percent, that each firm experiences over the period of their involvement (6 years for A, 3 years for B, 2 years for C, and 4 years for D). (Round your answers to two decimal places.) A 7.58 B 9.74 C 7.24 % % %
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- please show work Firms A, B, C, and D enter into a financial arrangement. Money flush firm A will pay expanding firms B and C each $1,000,000 today. B will pay D $2,100,000 three years from today. C will pay B $900,000 two years from today and D $360,000 two years from today. Finally, D will pay A $3,300,000 six years from today. Calculate the yield rate or interest rate, to the nearest hundredth of a percent, that each firm experiences over the period of their involvement (6 years for A, 3 years for B, 2 years for C, and 4 years for D). (Round your answers to two decimal places.) > B D % Show My Work RequiredSuppose a business takes out a $5, 000, five-year loan at 9 percent. The loan agreement calls for the borrower to pay the interest on the loan balance each year. Prepare an amortization schedule showing how the loan will be repaid. 2. State the criterion for accepting or rejecting independent projects under each of the following methods. - Profitability index - Discounted payback period - Accounting rate of return - Net present value - Payback period - Internal rate of return3. A finance company has an opportunity to purchase three promissory notes from a broker for a total of $140,000 cash. The first note would pay $20,000 in one year, the second would pay S$70,000 in two years and the third $80,000 in three years. The finance company has set for itself a minimum acceptable rate of return of 10% effective. a. Evaluate the net present value of the investment at the company's MARR. b. State your conclusion about the acceptability of the profitability of this deal.
- A firm, whose cost of capital is 8 percent, may acquire equipment for $146,825 and rent it to someone for a period of five years. Note: Although payment of rent is typically considered to be an annuity due, treat it as an ordinary annuity when completing this problem in a spreadsheet or when using present value factors. If the firm charges $38,730 annually to rent the equipment, what are the net present value and the internal rate of return on the investment? Use Appendix D to answer the questions. Use a minus sign to enter negative values, if any. Round your answers for the net present value to the nearest dollar and for the internal rate of return to the nearest whole number. NPV: $ IRR: % Should the firm acquire the equipment? The firm acquire the equipment as the net present value is , and the internal rate of return the firm's cost of capital. If the equipment has no estimated residual value, what must be the minimum annual rental charge for the firm to earn the required 8…Assume that JL Corporation would like to know the amount of investment it will make in order to yield an amount of P500,000 which it will receive three years from now. Assume that the rate for this type of investment is 10%.Which of the following two commodity contracts has the higher present equivalent at an interest rate of 6% per year. Draw the Cash flow diagram and solve for each case Contract 1 has a cost of S 8,000 in year 1; costs will increase at a rate of 4% per year for 10 years. Contract 2 has an initial cost of $ 9,000 in year 1 but costs will escalate at S 400 per years for 10 years. Draw the Cash flow diagram and solve for each case.
- An investor is considering two investment projects. Project A requires an initial payment of £16,000. In return, the investor will receive a payment of £19,200 after one year. Project B requires an initial payment of £10,000. In return, the investor will receive a payment of £1,010 at the end of every month for one year. Calculate the cross-over rate of the projects 数字 Enter a percentage correct to 1 decimal place. % What is the payback period of each project? Project A: 12 Project B: 10 months monthsAn investor is considering two investment projects. Project A requires an initial payment of £15,000. In return, the investor will receive a payment of £19,600 after one year. Project B requires an initial payment of £10,700. In return, the investor will receive a payment of £1,210 at the end of every month for one year. Calculate the cross-over rate of the projects 数字 Enter a percentage correct to 1 decimal place. % What is the payback period of each project? Project A: Project B:数字 months monthsSuppose that you have generated the estimates listed below from a pro forma analysis for a company that had requested a three year loan. The loan is a $1.5 million term loan with the equal annual payments of principals. The P&I payments are due at the end of each year with the annual interest rate = Prime rate + 1.5%. Yr.1 Yr. 2 Yr. 3 Capital expenditure 250,000 125,000 75,000 Cash dividends 140,000 140,000 140,000 Cash flow from operations before interest expense 750,000 780,000 800,000 Assuming the Prime rate = 7.5% each year. What will be the interest payment at year 3? a). 25,000 b). 50,000 c). 45,000 d). 53,000 e). 10,000
- An investor is considering two investment projects. Project A requires an initial payment of £12,000. In return, the investor will receive a payment of £17,400 after one year. Project B requires an initial payment of £10,300. In return, the investor will receive a payment of £1,240 at the end of every month for one year. Calculate the cross-over rate of the projects 数字 Enter a percentage correct to 1 decimal place. % What is the payback period of each project? Project A:数字 Project B:数字 months monthsThe firm invests $1,000 today, and expects realizes after tax cashflows in the amounts of 600 Euros and 700 Euros, at the ends of years 1-2, respectively. The firm locks in future exchange rates in forward markets, at $1.18/Euro at end of year 1, and $1.25/Euro at the end of year 2. Hurdle=10%. What is the project’s NPV?An FI is planning the purchase of a $4 million loan to raise the existing average duration of its assets from 4.8 years to 6.3 years. It currently has total assets worth $20 million, $4 million in cash (0 duration), and $16 million in loans. All the loans are fairly priced. a-1. Assuming it uses the cash to purchase the loan, calculate the duration of the existing loan. a-2. Assuming the FI uses the cash to purchase the loan and that the loan has a 8.3 year duration, calculate the resulting duration of the asset portfolio. a-3. Should it purchase the loan if its duration is 8.3 years?b. What asset duration loans should it purchase in order to raise its average duration to 6.3 years?