Scenario Two years ago, Larry started a new business. Now he needs additional capital to finance additional growth and is meeting with a group of "angel" investors. If they decide to make the loan, they will do so without the use of a middleman or other intermediary. Wellington Industries would like to borrow additional debt capital. The company has hired a firm to assist in the sale of a new issue of 10-year bonds. Anderson Animations, Inc. holds cash balances in an institution that, in turn, loans out the funds to other individuals and companies. Direct Transfer O Indirect Transfer through an Investment Banking House O Indirect Transfer through a Financial Intermediary
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- You are the Chief Finance Officer of Pandemic Restaurant. Management has suggested of a possibility expanding the business by offering new investment facilities to the community using existing funds. Another alternative offered is to release Phpl,000,000 to fund the possible business expansion. Upon discussing with the accountant, he provided you the following information. Evaluate the company if it is worth expanding using internal funds or to grab the one million pesos offer. Also make the necessary recommendation to top management. Here is the financial statements of Pandemic Restaurant as of December 31, 2019.Use Excel to solve the following problem. Assume that as a local government financial analyst you are asked to project the feasibility of a loan to a proposed public service venture for its start-up funding. The venture’s principals estimate that, at the end of 5 years, they will be able to pay back up to $800,000 from revenues accruing to the venture’s activities. Assuming that your organization’s current “average cost of capital” is 4.8% (the “discount rate”). Assuming monthly compounding, what is the maximum amount your government can commit to the venture for its start-up? (I have worked this problem out on my own, I just want to be sure I used the correct formulas.)Assume that as a local government financial analyst you are asked to project the feasibility of a loan to a proposed public service venture for its start-up funding. The venture’s principals estimate that, at the end of 5 years, they will be able to pay back up to $800,000 from revenues accruing to the venture’s activities. Assuming that your organization’s current “average cost of capital” is 4.8% (the “discount rate”). Assuming monthly compounding, what is the maximum amount your government can commit to the venture for its start-up?
- 9&10) Set up the integral or formula necessary to solve the problem, then use Desmos or a calculator to evaluate. a) T.Perez the owner of a hardware store wants to sell his business for an amount that will establish a fund from which he will withdraw $15,000 a year for the next ten years. If the going interest rate is 5%, how much should he ask for his business to establish this fund? b) On January 1, 1992 Marcus deposited $3000 into an Individual Retirement Account (IRA) paying interest at the rate of 5.5% compounded continuously. Assuming that he deposits $3000 annually into the account, how much did he have in his IRA at the beginning of 20087 c) You wish to have a scholarship in your dog's name for $1000 each year to a deserving veterinary student, awarded indefinitely. How much should you donate, at 4% interest compounded continuously, to establish your scholarship? d) Lucky Su buys a winning scratcher ticket worth $500,000. Because the amount is under $1 million it is paid out in…Your financial advisor from Bluerock recommends you to invest in one of the plan. You want to compare and verify which of the following is the best investment option. Investment Plan A: Deposit $125,000 at the beginning and obtain $175,318.97 after 5 years.Investment Plan B: Deposit $243,000 at the beginning and obtain $319,771.42 after 7 years.Investment Plan C: Deposit $314,000 at the beginning and obtain $530,496.39 after 9 years. 1. Compute interest rate for all 3 plans. Which investment plan provides you the highest rate? 2. Your advisor updated the investment plan information yesterday. While the interest rate did not change for all 3 plans, future values of each investment are 210382.76, 415702.85, 742694.95, respectively. What would be the investment period for each plan? 3. Your advisor thinks it would be a good investment if you make an investment portfolio using all 3 investment plans suggested. He recommends investing in all 3 plans at year 0 and reinvest the money to…Your neighborhood laundromat is for sale and a friend is considering investing in this business. Your friend has asked for your financial advice regarding this endeavor. For the business alone and no other assets (such as the building and land), the purchase price is $250,000. The net cash flows for the project are $30,000 per year for the next 5 years. The plan is to borrow the money for this investment at 6%. You will need to submit a presentation sharing your recommendation and you must address the following questions:Part A: Calculate the Net Present Value and Payback Period: What is the net present value of this project? Calculate the simple payback period for this project. Your desired payback period is 5 years. How long is the payback period for this project? Use the following template to complete the Unit 4 Excel spreadsheet (IP): Unit 4 IP Assignment Template Part B: Evaluate the investment and provide calculations for an alternative deal: How would you evaluate this…
- E) You are an ángel investor, and 4 entrepreneurs have approached you to build some innovative folding tables, and the proposals are as follows. Project A, an investment of 499189 and annual cash flows respectively of 216982, 46543, 237780 and 531707. Project B, an investment of 455199 and annual cash flows respectively of 332309, 50801, 58123 and 322548. Project C, an investment of 508746 and annual cash flows respectively of 158321, 494359, 240543 and 98899. Project D, an investment of 557203 and annual cash flows respectively of 238377, 112884, 332960 and 311611. If the rate expected by you is 13.33% per year of compound interest. Which project is more profitable according to the NPV (Net Present Value)? OPTIONS: A B C DThe "Your Business or Mine" is a manufacturer of high-altitude balloons in Waco, Texas. The company is planning to expand its operations in 2023 and is interested in securing a loan for Tex-Mex National Bank of Waco. Four banks were visited, and their interest rates for the 15-year loan were recorded. As someone knowledgeable about the engineering economy and capital investment justification, which bank would you recommend to this company? Bank A) 1.5% per month compounded monthly Bank B) 16.5% per year compounded continuously Bank C) 4.85% per quarter compounded monthly Bank D) 8.92% per six months compounded semiannuallyA pensioner is expecting a lump sum of GHC 200,000 when she goes on pension next year and is thinking of the best way to allocate the funds to be received. An investment analyst has introduced her to a four funds as follows: Gamma Fund: This specializes in money market instruments and bonds of large corporations Delta Fund: This specializes in equities of exchange listed financial institutions Beta Fund: This specializes in bonds and equities of all good performing companies Index Fund: This is a portfolio that mimics the Ghana Stock Exchange All Share Index The investment analyst gathered information about the performance of the four funds and this is presented below: Funds Mean Return Standard Deviation Beta Co-efficient Gamma 15% 8% 0.25 Delta 20% 14% 1.20 Beta 18% 14% 0.85 Index 17% 12% 1.00 The rate on Government of Ghana five-year bond which is used as the standard risk-free rate is 8% per annum. The…
- Please kindly assist the question d, e, f. Thank you.- Please study the following capital budgeting project and then provide explanations for the questions outlined below: You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $2.1 million in anticipation of using it as a toxic waste dump site but has recently hired another company to handle all toxic materials. Based on a recent appraisal, the company believes it could sell the land for $2.3 million on an after-tax basis. In four years, the land could be sold for $2.4 million after taxes. The company also hired a marketing firm to analyze the zither market, at a cost of $125,000. An excerpt of the marketing report is as follows: The zither industry will have a rapid expansion in the next four years. With the brand name recognition that PUTZ brings to bear, we feel that the company will be…Your neighborhood laundromat is for sale and a friend is considering investing in this business. Your friend has asked for your financial advice regarding this endeavor. For the business alone and no other assets (such as the building and land), the purchase price is $250,000. The net cash flows for the project are $30,000 per year for the next 5 years. The plan is to borrow the money for this investment at 5%. What is the net present value of this project? Calculate the simple payback period Your desired payback period is 5 years. How long is the payback period. How would you evaluate this investment? What would be a good price at which to purchase this business?The "Your Business or Mine" is a manufacturer of high-altitude balloons in Waco, Texas. The company is planning to expand its operations in 2023 and is interested in securing a loan for Tex-Mex National Bank of Waco. Four banks were visited, and their interest rates for the 15-year loan were recorded. As someone knowledgeable about the engineering economy and capital investment justification, which bank would you recommend to this company?