If an investment of P750,000 that matures in 15 years but with certain specification that P 500000 will earn an interest of half of 1% paid semi- annually for 5 years and the remaining amount of investment will earn half of 1% of interest for the maturity term paid on a quarterly basis, What is the total FV of this investment option?
Q: On 2nd March 2022 Star Exporters have received export order for USD 2 million for shipment to Germa...
A: The exchange rate quotes is different incase of buying and selling currency. The exchange rate inclu...
Q: Tettletale News Corp has been growing at a rate of 10% per year, and you expect this growth rate in ...
A: Here, Current Dividend is $5 Growth Rate for 3 years is 10% Growth Rate after 3 years is 2% Discount...
Q: Determine the IRR of the following cashflow. Clue: Modify the CFD one step at a time to gradually el...
A: The estimated rate of return to analyze the potential investment is known as the internal rate of re...
Q: The cash flow diagram of proposed line of products froma Fashion company is shown below. What is the...
A: Internal rate of return is used in making financial decisions. A project is said to be profitable if...
Q: A young engineer's stating salary is 56,000. The engineer expects annual raises of 3%. The engineer ...
A: Here the future value is $200,000. Hence we can use the concept of compounding as we have the annual...
Q: To pay off a loan of R7 000 due now and a loan of R2000 due in 14 months' time, Olorato agrees to ma...
A: 1st Loan Amount = R 7,000 2nd Loan Amount = R 2,000 Interest Rate = 16%
Q: Given the following information for three publically traded comparable companies, estimate the the c...
A: Cost of capital for all equity financed company Cost of capital for all equity financed company is b...
Q: A contract can be fulfilled by making an immediate payment of $21,100 or equal payments at the end o...
A: As per the information given in the question Immediate payment= $21,100 Equal payment at the end of...
Q: t has decided to build a bridge. that initial cost is estimated to be 60,000,000. the annual mainten...
A: Capitalized cost is present value of all cost that are going to occur in the future in the life of a...
Q: (a) Calculate the monthly payment for each loan. (Round your answers to the nearest cent.) 30-year $...
A: Loan Payments: These are payments made by the borrower to the lender for taking the loan and these ...
Q: Suppose that the accumulated value of $1000 at the end of two years: Given that: a) the nominal annu...
A: Principal (P) = $1000 n = 2 years = 8 quarters
Q: The finance charge for this billing cycle is The account balance on the next billing is
A: A credit card is a type of payment card which is issued to the user by banks or financial institutio...
Q: 5. Which of the following statements is FALSE? a. In the extreme case, the debt holders take legal ...
A: Dividends are the distribution of business earnings to stakeholders depending on the number of share...
Q: How long will it take to save $2581.00 by making deposits of $227.00 at the end of every month into ...
A: Solution:- Ordinary annuity refers to equal periods deposits when these deposits are made at the end...
Q: Pelzer Printing Inc. has bonds outstanding with 10 years left to maturity. The bonds have a 7% annua...
A: The yield to maturity (YTM) of a bond is the total return expected if the bond is held until maturit...
Q: How can an investment bank experience a "run"? Briefly describe the effect the runs on Bear Stearns ...
A: Investment bank is referred as the financial service company, which act as an intermediary for the l...
Q: Compute the future value of $536 invested every year if the appropriate rate is 11.2% and you invest...
A: Solution:- We know, when an equal payment is made at end of each period, it is called ordinary annui...
Q: Johan wants to buy a car on hire purchase for N$75000 at the rate of 10% p.a. repayable using monthl...
A: Since you have posted a question with multiple sub-parts, we will solve the first three subparts for...
Q: 18. Assume that a 15-year, $1,000 face value bond pays semi-annual interest of $30.00. If an investo...
A: Bonds: Bonds are the liabilities of the company which is issued to raise the funds required to finan...
Q: analysis, determine which one of the three mutually exclusive alternativ should be selected. Each al...
A: Given First cost , Uniform annual benefit and Salvage value of device A,B & C.
Q: this project acceptable?
A: The return is the profit or loss that an investor anticipated on an investment. It is to be calculat...
Q: 7.8 Dividends and Earnings Is it possible for a company to pay dividends when it has a negative net ...
A: As per Bartleby honor code, when multiple questions are asked, the expert is required only to solve ...
Q: our(4) factors that affect the level of interest rate are Production opportunities, Time preferences...
A: The level of interest rates is affected by other variables and other factors. Main factors that affe...
Q: 12. Luther is a successful logistical services firm that currently has $5 billion in cash. Luther ha...
A: A share repurchase, often known as a buyback, is a decision made by a corporation to acquire its own...
Q: A construction company agreed to lease payments of S622.77 on construction equipment to be made at t...
A: Hi, since you have submitted a question with multiple sub-parts, we will answer the first three as p...
Q: Find the present value of the investment. (Round your answer to the nearest cent.) funding $8,000 wi...
A: “Since you have asked multiple questions, we will solve the one question for you. If you want any sp...
Q: Plymouth plc wishes to borrow £80 million at a fixed interest rate to fund a project. The firm would...
A: Here, Company P wants Fixed Interest Rate Company T wants Floating Interest Rate
Q: Star. An advertisement of an investment firm states that if you invest P500 in their firm today you...
A: Investment (PV) = P500 Future value (FV) = P2000 Period = 10 Years Quarterly period (n) = 10*4 = 40 ...
Q: You expect a share of EconNews.Com to sell for $69 a year from now. If you are willing to pay $70.09...
A: Share price is the current price at which one share of the company is sold in the market. The expect...
Q: The balance in the account will be $ (Round the final answer to the nearest cent as needed. Round al...
A: Time value of money (TVM) is used to measure the value of money at different point of time in the fu...
Q: If a loan of L is repaid in one lump sum at the end of 20 years, the amount of interest paid is 5000...
A: Here we can use the concept of time value of money to find the solution. As per the concept of time ...
Q: Seven years ago the Templeton Company issued 15-year bonds with an 11% annual coupon rate at their $...
A: The return that investor can gets from keeping a bond in his portfolio till the issuer redeems it be...
Q: 1. The minimum required return by Cross-Ocean’s debtholders 2. The minimum required return by Cross...
A: Weighted average cost of capital (WACC) refers to the combined cost of company's capital from all th...
Q: calculate the capitalized cost of a project that has an initial cost of 8 000 000 and an additional ...
A: Initial Cost= 80,00,000 Additional Cost =250,000 n=8 Operating cost for first 5 years= 150,000 Opera...
Q: An investor is considering an investment that will pay $2,290 at the end of each year for the next 1...
A: The payment required to be made today for the investment can be calculated as the present value of a...
Q: The required price per share will be $
A: Face Value or Maturity value of Bond = $1000 Conversion ratio = 31 Required price of share = Face V...
Q: eighing the pros and cons of purchasing a new printer. The equipment would cost PHP900 and enhance c...
A: Present value is equivalent value of money today considering the interest rate and period of time of...
Q: Depending on the demand for your product, your sales are expected as follows: Demand Prob. Sales Low...
A: Here, Market Value of Equity is 430 No. of Shares is 40 EBIT is 23% Sales Tax Rate is 34% After Reca...
Q: How long will it take to save $2581.00 by making deposits of $227.00 at the end of every month into ...
A: Solution:- When equal deposits are made at the end of each period, it is called as ordinary annuity....
Q: A regional infrastructure building and maintenance contra must decide to buy a new compact horizonta...
A: Inflation is the gradual loss of a currency's purchasing value over time. The increase of a mean pri...
Q: A credit union pays 7.7% annual interest compounded daly. What deposit today (present value) would a...
A: Here the compounding is daily. We need to find the effective annual rate (EAR) first and then solve ...
Q: A man paid 10% down payment of P1,000,000 for a house and lot this month of January. The rate of int...
A: Annuity is a set of regular payments being made at regular interval. The formula to calculate the ef...
Q: Thomas has made deposits of $800 at the end of every quarter for eleven years. If interest is 5% com...
A: Future Value: The future value is the amount that will be received at the end of a certain period. T...
Q: How long will it take to save $2581.00 by making deposits of $227.00 at the end of every month into ...
A: Future Value of Ordinary Annuity refers to the concept which determines the sum total of all the cas...
Q: Acme Food Co. Ltd. is considering the introduction of a new product Smackers. The firm has gathered ...
A: NPV Net present value (NPV) is the present value of all cash inflows less the present value of cash ...
Q: What payment is required at the end of each year for 8 years to repay a loan of $2,580.00 at 5% comp...
A: Solution:- When a loan is taken, it can either be repaid by paying a lump sum amount at maturity or ...
Q: QUESTION 1 A bank makes a 30 year Fully Amortizing FRM for $2,000,000 at an annual interest rate of ...
A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new que...
Q: QUESTION 6 You receive a RM15,000 signing bonus from your new employer and decide to invest it for 2...
A: Comparison of both the alternatives shall be based on the future value under the said alternatives.
Q: You invest in a 55 month $5,163 zero-coupon corporate bond at a simple discount rate of 9.73 per yea...
A: The price of a zero-coupon bond issued at discount is equal to the face value of the bond less the d...
Q: four-year lease agreement requires payments of $10,000 at the beginning of every year. If the intere...
A: Effective Annual Rate The effective annual rate of interest is the actual or the real rate of intere...
2
Step by step
Solved in 2 steps with 2 images
- Finance Assuming we have the following immediate interest rates in the market: 1M - 2.5%, 2M - 2.8%, 3M - 3%, calculate the FRA 1v2 rate. Assume that each month has 30 days and a year has 360 days. If the investor has purchased this contract at the FRA rate calculated above and the interest rate in the market at the time the contract is settled is 3.2%, then in which direction the settlement flows (between the buyer and seller of the contract)? (please use the formula to solve it, thank you)Given an interest rate of 8.5 percent per year, what is the value at date t = 8 of a perpetual stream of $1,900 payments with the first payment at date t=14? Multiple Choice O $13,701.13 O $14,865.72 O $15,163.04 $22,452.94 $14,568.41Assume an asset sells in the spot market for a price of $140, the risk-free rate is 5%, and a forward contract expires in ten months. What is the initial value of the contract and the correct forward price? $140 and $143.45 $0 and $145.82 $0 and $134.19
- The buyer of a certain machine may pay either P50k cash down payment & P10k annually for the next 6 years every beg’g of the year, or pay P60k cash & P10k annually for the next 5 years, 2 years after. If money is worth 12% compounded annually, what is the value of the 1st option? a). P69,047.762 b). P96,047.762 c). P66,047.762 d). P96,407.672given S0=€50, at the end of second months, the asset can be €52 or €48. With risk free interest rate of 12% continously and ST is the asset price in the end of second month. Calculate the pricing of a derivative that give ST^2 payoff at the end of second months using one step binomial process.Consider the following balance sheet (in millions) for an FI: Assets Liabilities Duration = 10 years $950 Duration = 2 years $860 Equity $90 What is the FI's duration gap, and FI's interest rate risk exposure ? How can the FI use futures and forward contracts to put on a macrohedge? What is the impact on the FI's equity value if the relative change in interest rates is an increase of 1 percent? That is, DR/(1+R) = 0.01. Suppose that the FI in part (c) macrohedges using Treasury bond futures that are currently priced at 96. What is the impact on the FI's futures position if the relative change in all interest rates is an increase of 1 percent? That is, DR/(1+R) = 0.01. Assume that the deliverable Treasury bond has a duration of nine years. If the FI wants to macrohedge, how many Treasury bond futures contracts does it need?
- Currently the short term (1 to 12 month) borrowing rate is 3.50% per year and the lending rate over the same period is 0.50% per year. Which of the following implied repo rate per year for a six month futures contract will allow you an arbitrage opportunity? Assume no other transaction cost. O 3.25% O 0.25% O 3.00% O 2.75% O All of these 277Your company expects to pay GBP 1,500,000 in 180 days. The 180 day forward rate for GBP is $1.80 and the current spot rate is $1.76. If you use a forward hedge, estimate the cost of hedging the payable if, 90 days later, the spot rate for GBP turns out to be $1.82 O $30,000 O O $90,000 O DIf you are expecting to get OMR 11240 at the end of 9 years; calculate its present value if the interest rate is 24.2% and is computed yearly? Select one: a. None of the option b. 1909.19 c. 9046.11 d. 1356.38 e. 9064.11
- What is the maturity value if P 10000 is compounded annually at an interest rate of 2% in 5 years? a. 11040.09 b. 11140.08 c. 11040.08 d. 11048.08a "ll VOLTE OMANTEL ملاك اليوم ۱۱:۳۳ ص If you are expecting to get OMR 10240 at the end of 3 years. Calculate its present value if the interest rate is 9.42% and is computed quarterly. Select one: O a. None of the options O b. 2244.46 O C 7744.46 O d. 6644.46 O e. 3344.46The 1-year forward price of copper is $ 1/lb. The 1-year continuously compounded interest rate is 6%. One-year option prices for copper are shown in the table below. Strike Call| Put 0.95 0.0649 0.0178 0.975 0.05 0.0265 1 0.0376 0.0376 1.025 0.02740.0509 1.034 0.02430.0563 1.05 0.0194 0.0665| Suppose CDE mines copper, with fixed costs of $ 0.50/lb and variable cost of $ 0.40/lb. If CDE does nothing to manage copper risk: What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 0.80 $ ? What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 0.90 $ ? What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 1.00 $ What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 1.10 $ ? What is its profit 1 year from now, per pound of copper, if the copper price in 1 year is $ 1.20 $ ? If on the other hand CDE sells forward its expected copper production:…