Initial Uniform Annual Benefit AS 20 S 6.00 B 35 9.25 C 55 13.38 D 60 13.78 E 80 24.32 F 100 24.32

Q: what is the capitalized cost of the machine with an initial cost of 10,000 and an infinite life? the…

A: Capitalized cost is that will continue to occur during the life of equipment.

Q: An asset has a current price of ₱80.00 and it has an exercise price of ₱95 in 6 months. In your…

A: Here, Current Price is ₱80.00 Exercise Price is ₱95 Standard Deviation is 0.45 Reference Rate or…

Q: return of 15% has the choice of receiving one of the following: (6 points) 10 annual payments of…

A: We have to calculate present value FACTOR anniuty and than we have to calculate present value.

Q: given S0=€50, at the end of second months, the asset can be €52 or €48. With risk free interest rate…

A: To value American options, the binomial option pricing model employs an iterative technique that…

Q: The IRR of A (C → B) is%. (Round to one decimal place.)

A: IRR is the rate at which capital investment equals the annual cash inflows and the salvage value.

Q: Each of two alternatives (X or Y) will last 18 years, and the interest rate is 5%. Alternative X has…

A: NPW shows the amount of worth produced by the investment & is expressed in absolute…

Q: Which option yields a higher return? Option A: $50 in 6 months and $50 in 12 months, assuming a…

A: Here,Option A:$50 in 6 Months (n1)$50 in 12 months (n2)Interest Rate (r) is 3%Compounding Period (m)…

Q: What is the forward rate? What is the relationship between forward rates and the spot rates? Provide…

A: In the context of derivatives, a forward rate is the interest rate implied for a future period of…

Q: There are two call options, A and B, with the same exercise price, written on the same underlying…

A: Answer: An option grants the holder the right but not an obligation to purchase or sell the…

Q: Determine the present value P that must be invested to have the future value A at simple interest…

A: To calculate the present value we will use the below formula   A = P+(P*r*t) Where A - Future value…

Q: Given the following variables: S = $50, E = $45, T = 1 year, r = 2 %, and P = $5; if the call option…

A: Given, Stock price (S) = $50 Strike price (E) = $45 T = 1 year r = 2% Put price (P) = $5

Q: An investr

A: The given question is off the one time initial payment for aquiring capital asset. We know the…

Q: The five alternatives shown here are being evaluated by the rate of return method: If the…

A: Companies have different alternatives to invest their money in, but they should always compare the…

Q: % debenture is $1,000 with maturity is 3 years. What would be the price if yield rate is 8%? use…

A: The given problem can be solved using PV function in excel. PV function computes current price  for…

Q: Assume that you are valuing an infinitely lived asset that pays $350 at the end of each year. What…

A: Infinite lived asset means asset has no maturity life and we receive annual cash flow at the end of…

Q: An investor is considering two investment projects. Project A requires an initial payment of…

A: Here,Initial Investment of Project A is £13,000Cash Flow in Year 1of Project A is £18,600Initial…

Q: How much would you have at the end of five years if you invested P50,000 at 10.5% interest rate?

A: Future Value: It is the future worth of the present sum of the amount and is computed by…

Q: . What to the nearest cent is the value of the long forward contract?

A: A financial agreement between two parties to purchase or sell an asset at a defined future date for…

Q: $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn…

A: The value of money at present is known as the present worth of the money while the value of money in…

Q: For the options shown below, the values of n that you should use to make a correct comparison by the…

A: Interest Rate = 10%   Option A: Capital Cost = -65,000 Annual Cost = -20,000 Salvage Value = 24,000…

Q: An investment costs $100 and it promises $50 in 3, 4, 5, 6 and 7 years.  What is the return of this…

A: The return on investment is a financial metric used to find out whether the investment will give a…

Q: Suppose that a risk-free investment will make three future payments of $100 in one year, $100 in two…

A: A financial concept known as present value (PV) determines the current value of future cash flows or…

Q: Choose the option having the Highest Net Present Value:   $400 to be received in exactly 1 year,…

A: The net present value of an investment or a project is the measure of the profitability of the…

Q: You want to invest in a project that costs $4125.  The initial (Date 0) CF of the project is $75…

A: NPV of a project = Initial Outflow - Present value of future inflow of cash Given  Initial Outlay…

Q: Consider a project with costs of $39 million total in 6 years. Assuming that the costs are paid the…

A: Given: Future value (FV) = $39 Million Time period (n) = 6 years Discount rate (r) = 6% = 0.06

Q: Consider a forward contract that expires in 9 months. The underlying asset is worth $250 and the…

A: Underlying price (S) = $250 r = 8% n = 9 months = 0.75 years

Q: year forward contract was established with a price of $70.25. Now, a year and a half later (t= 1.5…

A: The forward are contract that are to be settled in the future based on the spot prices and it may be…

Q: The current price of the underlying instrument is 1000 PLN. In a year (right after the expiry of the…

A: Spot price of Instrument = 1000 PLNInstrument rate for 1 year = r = 5%Instrument rate for half year…

Q: There are three investments being offered to you; one pays you $100,000 at the end of 10 years;…

A: The present value of the investment is calculated byThe investment with the highest present value…

Q: 5. The following two alternatives are mutually exclusive. (a) Use rate of return analysis to decide…

A: ROR is the rate of return when NPV of the project is equal to zero.

Q: According to the concepts underlying the present-value formula, would you prefer to receive (a) P75…

A: According to the time value of money concept, a sum of money today has more purchasing power than…

Q: Considering an interest rate of 8%, that the cost of the equipment is $300,000 and you will replace…

A: Where the actual cost of equipment is dividing over the life of equipment is called annual cost.…

Q: A manufacturer can lease a machine for 6 years at $3,680 per quarter, payable at the beginning of…

A: Lease a machine:Quarterly payment = $3,680Cost of capital = 9.1%Number of years = 6 yearsPurchase…

Q: Let the current asset price be 100 dollars and atter time T, the price either goes up to 110 dollars…

A: The probability of up move for T=0.5 years can be calculated by finding the up move factor and down…

Q: You are offered to spend P500,000 on a certain project that promises to yield yearly benefit of…

A: Under cost benefit analysis, present value of the benefits from the project are compared with the…

Q: An investment of $50,000 is proposed at an interest rate of 8%. What is the future amount in 10…

A: Simple Interest Future Value = Present Value * (1+rt) Where,  r = rate of interest  t = no. of years…

Q: There are three investments being offered to you; one pays you $100,000 at the end of 10 years;…

A: The objective of the question is to determine which investment option is the best based on the…

Q: Assume that you are valuing an infinitely lived asset that pays $350 at the end of each year. What…

A: In the given question we need to compute the present value of perpetuity because infinitely lived…

Q: The spot price of an investment asset is $35 and the risk-free rate for all maturities is 5% with…

A: Given: Particulars Amount Spot price $35 Risk free rate 5% First year income $2.00 Second…

Q: Consider the following two alternatives. The planning period is 8 years for both alternatives. The…

A: Before investing in new projects, feasibility of the project is evaluated by using various methods…