What is the approximate implicit rate of return on the capital leases? Select one: а. 9.1% b. 11.7% с. 10.2% х d. 18.3%
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- The internal rate of return equals the rate that yields a profitability index of 1 for an investment. True O FalseWhen a lessor receives cash on an operating lease, which of the following accounts is increased? A. Lease Payable B. Interest Revenue: Leases C. Lease Receivable D. Rent RevenueHow is duration related to the interest elasticity of a fixed income security? What is the relationship between duration and the price of the fixed-income security? ( LG 22-3 )
- Consider the following contingent claim whose value at maturity date T is given by f(T,Sp) = min(Sr S;) where T, is some intermediate betweent (current time) and T (maturity date). Sr, and Sr denote the prices of the underlying asset at time To and time T respectively. We assume that the asset is non-dividend paying and its asset price satisfies dS; = uS,dt + oS,dW, with u = 0.05, a = 0.2. The riskfree interest rate is 6% per annum. Take t = 0, T, = 0.5 and T = 1.5. The current price of the asset is So = $25. (a) Calculate the price of the contingent claim at time Ta using replication technique. Express your answer in terms of ST.. (©Hint: The value of S, is known at time To. To find the price, treat T, as the "current time"). (b) Using the result of (a), find the current price of this contingent claim using risk neutral valuation principleTo account for a down payment, adjust the _____ of the loan by subtracting it from the loan amount. O present value (pv) future value (fv) rate O typetuing Discreto Compounding; i-8% Uniform Series Uniform Gradient Conton Ans Sinking Find Gradient Uniform Presont Morh Fector lO Find P Giyn A Capital Recovery Factor No Find A Gradient Present Worth Factor Series Factor To FidT Givet Factor To Find A Given G A/G To Fiad A To Find P Given G N. PIG 1 1.0800 0 9259 08573 0.7938 0.7350 0.6806 0 6302 0.5835 10000 2 CE00 0 9259 1.7833 1.0000 0 4808 0 3080 0/2219 01705 0 1363 0.1121 O 0940 10800 0 5608 0.3880 0.0000 0.0000 1.1664 0.8573 0.4808 3 1.2597 3 2464 2.5771 2.4450 0.9487 4. 1.3605 4.5061 5 3666 73369 8.9228 10 6366 12.4876 14. 4866 3.3121 3.9927 46229 52064 5.7466 6 2469 6.7101 0/3019 4.6501 7.3724 10.5233 1.4040 0 2505 0.2163 1.4693 1.8465 1.5869 2.2763 1.7138 01921 0.1740 0.1601 14.0242 2.6937 8. 1.8509 0.5403 0.5002 0.4632 17.8061 3.0985 6. 1.9990 21.8081 3.4910 10 2.1589 .0690 0.1490 25.9768 3.8713 Print Done DOx.
- When is it appropriate for the lessee to use the lessor's implicit rate to calculate the present value of the lease payments? A.when the lessee's incremental borrowing rate is lower than the lessor's rate B.whenever the lessee knows what the lessor's rate is C.when the lessor's implicit rate is lower than the lessee's incremental borrowing rate D.when the lessor's rate is higher than the lessee's incremental borrowing rate3. Compute Project Y’s accounting rate of return. The numerator drop down options are: accounts receivable, annual income, average investment, average total assets, cost of goods sold, current assets, current liabilities, net sales, total assets The denominator dropdown options are: accounts receivable, annual income, average investment, average total assets,A competitive lender makes loans to a pool of borrowers that are identical. After borrowers have received their loans they choose one of two investment projects. with probability Pg. With probability 1 – Pg, Project G pays a rate of return of -1, the borrower defaults on the loan, and the lender receives Project G pays the borrower a rate of return of r. nothing. Project B pays the borrower a rate of return of rB with probability pp. And with probability 1 – Pb, Project B pays a rate of return of -1, the borrower defaults on the loan, and the lender receives nothing. Pb, and P,(1+ rg) > Po(1+ rb). Suppose rg 0.98, pr = 0.4, rp = 0.02, L = 1. We assume as usual that rg 0.10, rb 0.12, Pg %3D The lender can't distinguish between borrower types and so it charges all borrowers the same interest rate rL. The lender lends an amount L and pays interest rp on funds acquired from depositors. Round your answer to at least three decimal places.
- What is the current market view on EUR/USD? (Will it appreciate or depreciate? and why?)Which option gives the right to sell an asset at any time prior to or at maturity? *A. European PutB. American PutC. American CallD. European CallWhich option gives the right to buy an asset any time prior or to maturity? *A. European CallB. American PutC. American CallD. European Put