Practical Management Science
5th Edition
ISBN: 9781305250901
Author: Wayne L. Winston, S. Christian Albright
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 43P
Summary Introduction
To show: The values in the cells of the excel and relevant formulas.
Monthly payment:
It is the payment made every month for a product or a service. The monthly payment might vary for the product or service price.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
The following statements are factual discussions about Capitalization of Earnings
Method except:
Select the correct response:
You may use past earnings in the Capitalization of Earnings method for
cases wherein earnings are fixed.
In capitalization of earnings method, the value of the asset or the
investment is determined using the anticipated earnings of the company
divided by the cost of capital.
Cost of Capital used in the Capitalization of Earnings method is
equivalent to the expected yield or the required rate of return.
The formula used in Capitalization of Earnings is actually grossing up
the future earnings using capitalization rate to come up with the
estimated asset value.
Which of the following is a factor that would increase the risk of the
misappropriation of assets for a large jewelry store?
Managerial salaries with no bonus compensation.
The nature of the store's merchandise.
The use of standard retail sales practices.
Adjusting merchandise value to the lower of cost or market.
On-Balance Sheet Items (Assets)
(in millions)
Cash
$ 10,000
Government securities
30,000
Interbank deposits
5,000
Home loans to personal finance customers
20,000
Loans to corporate customers
75,000
Total Balance Sheet Assets
$140,000
Off-Balance Sheet Items
Standby letters of credit backing corporate borrowings
$ 10,000
Long term unused loan commitments made to private corporations
20,000
Total Off-Balance Sheet Items
$30,000
Bank Capital
Common stock (par value)
$ 1,000
Surplus
1,500
Retained earnings
1,500
Subordinated debentures
2,000
Minority interest in subsidiaries
1,000
Allowance for loan and lease losses (reserves)
1,000
Non cumulative perpetual preferred stock
1,000
Intermediate term preferred stock
4,000
Equity commitment notes
2,000
Basel…
Chapter 2 Solutions
Practical Management Science
Ch. 2.4 - Prob. 1PCh. 2.4 - Prob. 2PCh. 2.4 - Prob. 3PCh. 2.4 - Prob. 4PCh. 2.5 - Prob. 5PCh. 2.5 - Prob. 6PCh. 2.5 - Prob. 7PCh. 2.5 - Prob. 8PCh. 2.5 - Prob. 9PCh. 2.6 - Prob. 10P
Ch. 2.6 - Prob. 11PCh. 2.6 - Prob. 12PCh. 2.6 - Prob. 13PCh. 2.7 - Prob. 14PCh. 2.7 - Prob. 15PCh. 2.7 - Prob. 16PCh. 2.7 - Prob. 17PCh. 2.7 - Prob. 18PCh. 2.7 - Prob. 19PCh. 2 - Julie James is opening a lemonade stand. She...Ch. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - The file P02_26.xlsx lists sales (in millions of...Ch. 2 - Prob. 27PCh. 2 - The file P02_28.xlsx gives the annual sales for...Ch. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - Prob. 32PCh. 2 - Assume the demand for a companys drug Wozac during...Ch. 2 - Prob. 34PCh. 2 - Prob. 35PCh. 2 - Prob. 36PCh. 2 - Prob. 37PCh. 2 - Suppose you are borrowing 25,000 and making...Ch. 2 - You are thinking of starting Peaco, which will...Ch. 2 - Prob. 40PCh. 2 - The file P02_41.xlsx contains the cumulative...Ch. 2 - Prob. 42PCh. 2 - Prob. 43PCh. 2 - The IRR is the discount rate r that makes a...Ch. 2 - A project does not necessarily have a unique IRR....Ch. 2 - Prob. 46PCh. 2 - Prob. 1CCh. 2 - The eTech Company is a fairly recent entry in the...
Knowledge Booster
Similar questions
- It is January 1 of year 0, and Merck is trying to determine whether to continue development of a new drug. The following information is relevant. You can assume that all cash flows occur at the ends of the respective years. Clinical trials (the trials where the drug is tested on humans) are equally likely to be completed in year 1 or 2. There is an 80% chance that clinical trials will succeed. If these trials fail, the FDA will not allow the drug to be marketed. The cost of clinical trials is assumed to follow a triangular distribution with best case 100 million, most likely case 150 million, and worst case 250 million. Clinical trial costs are incurred at the end of the year clinical trials are completed. If clinical trials succeed, the drug will be sold for five years, earning a profit of 6 per unit sold. If clinical trials succeed, a plant will be built during the same year trials are completed. The cost of the plant is assumed to follow a triangular distribution with best case 1 billion, most likely case 1.5 billion, and worst case 2.5 billion. The plant cost will be depreciated on a straight-line basis during the five years of sales. Sales begin the year after successful clinical trials. Of course, if the clinical trials fail, there are no sales. During the first year of sales, Merck believe sales will be between 100 million and 200 million units. Sales of 140 million units are assumed to be three times as likely as sales of 120 million units, and sales of 160 million units are assumed to be twice as likely as sales of 120 million units. Merck assumes that for years 2 to 5 that the drug is on the market, the growth rate will be the same each year. The annual growth in sales will be between 5% and 15%. There is a 25% chance that the annual growth will be 7% or less, a 50% chance that it will be 9% or less, and a 75% chance that it will be 12% or less. Cash flows are discounted 15% per year, and the tax rate is 40%. Use simulation to model Mercks situation. Based on the simulation output, would you recommend that Merck continue developing? Explain your reasoning. What are the three key drivers of the projects NPV? (Hint: The way the uncertainty about the first year sales is stated suggests using the General distribution, implemented with the RISKGENERAL function. Similarly, the way the uncertainty about the annual growth rate is stated suggests using the Cumul distribution, implemented with the RISKCUMUL function. Look these functions up in @RISKs online help.)arrow_forwardThe usual face value for most corporate bonds is $5,000.; True or Falsearrow_forwardFill in each blank space with the missing answer : THERE 9 BLANK SPACE EMPTY SAW WE NEED 9 WORDS TO COMPLETE THE PARAGRAHarrow_forward
- Please paraphrase the ''Income before and after tax'' and ''Net Income'' below. Should be the same length as the original one.arrow_forwardSuppose you want to have $700,000 for retirement in 30 years. Your account earns 8% interest. How much would you need to deposit in the account each month? %24arrow_forwardFinance Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Do not provide Excel Screet shot rather use tool table Answer completely.arrow_forward
- Hh1. Accountarrow_forwardIf money can be invested at 5% compounded annually, A.Accumulate $1,000 for 15 years. B. Discount the result of problem A for 10 years. C. Accumulate 1,000 for 5 years. Compare the results of B and C.arrow_forwardBriefly stated, a theory is a set of statements that serves to explain the manner in which certain concepts or variables are related. These statements result both from our present level of knowledge on the topic and from our assumptions about the variables themselves. The theory allows us to deduce logical propositions, or hypotheses, that can be tested in the field or laboratory. In short, a theory is a technique that helps us understand how variables fit together. Their use in research and in management is invaluable (Black & Bright, 2019). Support why learning organizational behavior and management theory is important to your academic and professional career (s).arrow_forward
- Accepted characters: numbers, decimal point markers (period or comma), sign indicators (-), spaces (e.g., as thousands separator, 5 000), “E” or “e” (used in scientific notation). NOTE: For scientific notation, a period MUST be used as the decimal point marker. Complex numbers should be in the form (a + bi) where “a” and “b” need to have explicitly stated values. For example: {1+1i} is valid whereas {1+i} is not. {0+9i} is valid whereas {9i} is not. A survey determines that mint chocolate chip is the favorite ice cream flavor of 6% of consumers. An ice cream shop determines that of 190 customers, 15 customers stated their preference for mint chocolate chip. Find the P-value that would be used to determine if the percentage of customers who prefer mint chocolate chip ice has increased at a 5% level of significance. P-value: Round your answer to four decimal places as necessararrow_forwardTraditional approach to financial management is how the funds can be utilised efectively. Select one: a. False O b. True Clear my choice Next neory Jump to... ere to searcharrow_forwardWrite a Java class called Song to represent a song in a music collection. The data members of the Song class are String objects representing the song title, artist’s name and the album where the song can be found. These instance variables for the class are to have private access modifiers so you will need to write the appropriate methods to allow the client to access the data values. In accordance with good programming practice you are to override the equals and toString methods. In addition, this class is going to be used in a Collection that is to be sorted, so it is to implement the Comparable interface.A second class is to be written called SongList that contains a main method that reads in a file name via the command line. The file is a listing of the songs on one of my playlists. In the file each song is on a single line. The line is formatted with the song name, the artist name and the album separated by a colon (:) and varying amounts of white space. Each playlist contains 70…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,