Question III (7 H: Provide a justified policy recommendation considering the case described below: ($ thousands) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Benefit Sources Element 1 500 525 550 600 650 700 800 1000 Element 2 0. 0. 250 350 500 600 750 800 900 Element 3 0. 100 100 100 100 100 100 100 Element 4 50 50 50 50 50 50 50 50 Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Cost Sources Element 1 300 250 250 0. 0. 0. 0. 0. Element 2 0. 200 150 150 0. 0. Element 3 0. 0. 300 250 250 0. 0. 0. 0. Element 4 400 450 500 0. Element 5 0. 0. 150 150 150 0. 0. 0. Element 6 400 400 400 0. 90 O O O

Q: Describe briefly how the HST remittance is calculated.

A: Harmonized sales tax remittance: The harmonized sales tax remittance is the amount of sales tax that…

Q: What are two ways to calculate returns for a holding period?

A: It is also called as HPR, which states to the total returns during a period for which a investment…

Q: Create a chart reflecting the conventional payback period?

A: The question is based on the calculation of payback period.

Q: Define Times interest earned ratio.

A: Accounting Ratios: A ratio is a number expressed in terms of anther. Ratios are used by…

Q: What is the Times-interest·earned ratio?

A: It is important to analyze whether a company has ability to pay off its debts. Means, it is…

Q: can you now calculate the gross profit ?

A: Gross profit can be defined as the net sales revenue earned by business over a particular period of…

Q: Describe the two forms that the calculation of the payback period can take?

A: The payback period alludes to what extent it takes for a speculator to hit breakeven to recoup the…

Q: Define increase or decrease of credits.

A: Definition:   Account: Account is the basic record that reports all changes in the value of…

Q: Explain Computing Holding Period Returns?

A: Introduction: Holding period returns (HPRs): Holding period return (HPR) is one of the investment…

Q: What is the significance of finding the internal rate of return?

A: IRR helps to check the viability of the project. If IRR is more than Kc than Project seems to be…

Q: Comparison of NPV, IRR or Payback period

A: The net present value (NPV) is the difference between the present value of cash inflows and…

Q: How is the payback period determined?

A:

Q: Write an equation for determining the value of the series of end-of-period payments?

A: Formula:

Q: Identify and differentiate or define the types of

A: There are mainly two types of payback analysis : 1. Payback period 2. Discounted payback period

Q: What does the annuity factor indicate?

A: Annuity factor It indicates the discounted factor’s sum for all the n maturities when all n…

Q: Explain Pass-Through Rates, Yields, and Servicing Fee?

A: Pass-through rateA rate of interest being paid to the investors on the securitized asset after…

Q: Give an example assuming that  the Compounding Period equals to Payment Period?

A: The representation on the basis of assumption:

Q: The modified internal rate of return (MMIR) is the discount rate that forces the _____.

A: Explanation: Modified internal rate of return can be better understood from the below formula, where…

Risk and return

Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

Capital Asset Pricing Model

Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.