Draw a 5-year cash flow diagram representing the following cash flows to build springs: (Chapter 2)    Initial investment in plant and equipment $50K  Answer:    Annual maintenance: $3K after year 1 and increasing $1K per year after that  Answer:    Annual production costs – $10K/year  Answer:    Annual revenue - $25K/year  Answer:

Q: Using the simple interest formula 1 = Pr, determine the deposit that must be made to earn 53123 in…

A: The deposit amount can be calculated with the help of formula

Q: A Canadian company is considering the purchase of a $7000 machine for their shop. The machine…

A: Present worth is the sum total of all the present value of net cash outflows and inflows discounted…

Q: A. Which of the following is most closely associated with the cost of using assets? a. Asset…

A: A. The ratio of total sales or revenue to average assets is known as asset turnover. The asset…

Q: 3. Rey borrowed P 40,000 at 12 % compounded semiannually. He agreed to pay the lender semiannually a…

A: Given that equal amount shall be paid till the end of 8th year and 6000 shall be paid at the end of…

Q: 3. A mortgage balance of $18000 is renewed for the remaining amortization period of 3ycars at %4…

A: Mortgage balance (B) = $18000 n = 3 years = 36 months Interest rate = 4% compounded semiannually…

Q: You have two options to invest $1000 in: i) A $1050 face value bond with coupon rate c = 6%. ii) A…

A: Bond is the debt security that investors uses to reduce the risk and increase stable return from…

Q: A new electric saw for cutting small pieces of lumber in a furniture manufacturing plant  has a cost…

A: Modified Accelerated cost recovery system (MACRS) Modified Accelerated cost recovery system (MACRS)…

Q: A company recently paid a dividend, D0, of $1.25. It expects to have nonconstant growth of 13% for 2…

A: We can use the dividend discount model here to determine the stock's fair value. As per the dividend…

Q: investors who beat the market on a given year are

A: Investors are the persons who are investing in the company for a long period of time with the belief…

Q: 19. Suppose a firm relies exclusively on the payback method when making capital budgeting decisions,…

A: Payback method - It is a method used for  evaluating a project by measuring the time a project takes…

Q: MARIA LOANED AN AMOUNT OF P100,00.00 PAYABLE IN 15 EQUAL QUARTERLY INSTALLMENTS THE FIRST PAYMENT…

A: Loan Amount = P100,000 Time Period = 15 Quarters Interest Rate = 10% compounded bi-monthly

Q: You are consider we IRRS that excee RRECT? Assume t

A: Cost of capital refers to the tool which is helpful in analyzing the cost of the capital projects…

Q: what would be the total return of the bond in percent?  (Assume interest payments are semi-annual.)

A: Bond valuation refers to a method which is used to compute the current value or present value (PV)…

Q: Question 7 What is the other name for fim-specific risk? O Systematic risk O Market risk O Micro-cap…

A: Risk includes the likelihood of losing some or all of the original investment. Business risks refer…

Q: You already have $54,700 in your savings account that earns 3.50% compounded annually. You will…

A: Current amount (PV) = $54700 Quarterly deposit (P) = $2,820 Interest rate = 3.50% Quarterly interest…

Q: The following are budgeted data: January February March 15,000 Sales in units. Production in units.…

A: Solution :    Total No. of Pound Required in month of Feb :          Production in February * One…

Q: A student needs $6000 every six months to pay living expenses while at college. It will take him 8…

A: Present Value of Ordinary Annuity refers to a concept that determines the value of cash flows at…

Q: find the size of each 4 payments made at the end of each year into a 9% rate sinking fund which…

A: Future value (FV) = 63000 Interest rate (r) = 9% Number of annual payments (n) = 4

Q: What are the arithmetic and geometric returns for the stock?

A: Geometric return is annualized return found by taking individual return. This return is calculated…

Q: Yoko invested s4000 in a fund for 2 years and was paid simple interest. The total interest that she…

A: Investment (P) = $4000 Period (T) = 2 Years Interest amount (I) = $400

Q: On January 1, 2020, Janet buys a bond for P10,000 that will make coupon payments of P600 after each…

A: Annual coupon (C) = P 600 Number of coupons remaining (n) = 1 r = 4% Face value (F) = P 10000

Q: Let r be the expected return of stock i, rRE represent the risk-free rate, b represent the Beta of a…

A: Capital Asset Pricing Model: The CAPM explains the relationship between expected return and…

Q: The owner of a downtown parking lot has employed a civil engineering consulting firm to advise him…

A: Present value of annuity Annuity is a series of equal amount payment at equal interval for a…

Q: 21.Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round…

A: The present value and compound interest can be calculated as per the function of present value

Q: You own a stock trading on 1/1 at 40 and on 12/31 at 43.50. What annual dividend do you need to earn…

A: Beginning stock price (P0) = 40 Ending stock price (P1) = 43.50 Let the annual dividend = D Required…

Q: H. CANSY Merchandising borrowed P800,000 from ABC Bank at 10% simple interest or one year and six…

A: H) Amount borrowed (A) = P 800000 r = 10% simple interest rate n = 1 year 6 months = 1.5 years

Q: 3.Using Table 11-1, calculate the compound amount and compound interest (in $) for the investment.…

A: Principal (P) = 5500 Period = 4 Years Quarterly periods (n) = 4*4 = 16 Interest rate = 8% Quarterly…

Q: Q7-6. Is it possible to convert the future value of an ordinary annuity table to the future value of…

A: Answer:- Yes EXPLANATION:- An annuity refers to a stream of equal cash flows that occur at regular…

Q: A corporation uses a type of motor truck which costs P 250,000, with life of 2 years and final…

A: The annual cost method helps in comparing two different projects having different periods. The…

Q: 22.Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round…

A: Compound amount (FV) = $26,500 Period = 18 Months Semi annual period (n) = 18/6 = 3 Interest rate =…

Q: #2 John is saving for his retirement by making annual end of year deposits for 30 years into a bank…

A: The value of an annuity: The value of an annuity or one growing at a constant pace at the end of an…

Q: How much less is a perpetuity of $2,000 worth than an annuity due of the same amount for 30 payments…

A: An annuity is a series of monetary payments. A perpetuity is a sort of annuity that lasts…

Q: Mohammed needs money in order to buy a latest Villa. The cost of building the Villa is BHD 75,000.…

A: Selling price is the price that a customer pays to purchase a product or a commodity, the price for…

Q: Calculate the Black-Scholes price of a Call option where: S = $50 %3D K = $45 %3D T-t=.25 O = .20 r…

A: Here we have; Spot price S is $50 Strike Price K is $45 Standard deviation is 20% Risk free rate is…

Q: Omega  company has the following capital structure as at 31st December 2020: Ordinary share…

A: We will first calculate the cost of each source of capital individually and then we will multiply it…

Q: Given the cash flow diagram below, expressed in months, determine: A. The Present value at a nominal…

A: NPV and IRR both are methods of capital budgeting that are used to make decesion of selecting and…

Q: Question 18 What is the expected retum of the following portfolio? E(R) 0.11 0.09 0.05 Stock A Beta…

A: A portfolio is made up of more than one financial asset. Here the portfolio has three stocks.…

Q: A man borrowed Php 8000 from RCBC and agreed to pay the loan at the end of 9 months. The bank…

A: AMount borrowed is Php 8000 Time period is 9 months Amount received after discount is Php 5000 To…

Q: The adult children of a college professor are endowing a scholarship fund in their father’s name.…

A: The annual scholarship of $1,000 is a perpetuity.   Perpetuity is an annuity that continues or goes…

Q: 1. What is the company's "life cycle"? What is Multistage Growth Model? Do we assume a constant…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: down payment.

A: A home loan refers to the amount borrowed from financial institutions or banks for the purpose of…

Q: The Gilbert Instrument Corporation is considering replacing the wood steamer it currently uses to…

A: Here, Cost of capital =14% To Find: NPV of the project =?

Q: Solve for the missing item in the following Principal= $500 Interest =6% Time? Simple…

A: Principal = $500 Interest rate = 6% Simple interest = $120

Q: Which maturity bond would be better for this investor,  the 10 or 15-year? What would be the dollar…

A: Bond valuation refers to a method which is used to compute the current value or present value (PV)…

Q: Mr. Cruz agreed to settle a debt by making 12 quarterly payments of P 450 each. If he failed to make…

A: Quarterly payment (Q) = P 450 n = 12 payments r = 8% per annum = 2% per quarter Let X = Debt amount

Q: The Michner Corporation is trying to choose between the following two mutually exclusive design…

A: Required return is 11% To Find: Profitability Index Net peresent Value

Q: Imagine you work for a company that uses gainsharing. Do you think you would like it? Why or why…

A: Gainsharing is a management system that encourages employees to improve their performance by…

Q: the interest rate is 10%. What is the amount of the accumulated money at the end of the fifth year…

A: Future Value of Annuity: It represents the future worth of the present annuity stream of cashflows.…

Q: When Christian bought his home, he borrowed $315,700 at 4.2% interest, compounded monthly for 25…

A: Loan amount (PV) = $315,700 Interest rate = 4.2% Monthly interest rate (r) = 4.2%/12 = 0.35% Period…

Q: Q1. Aling Azon bought 3 sets of air conditioning unit for her three bedrooms. She agreed to pay…

A: Down payment (D) = Php 5000 Monthly installment (M) = Php 3000 n = 1 year = 12 months r = 8% per…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.