Vince Oliver plans to invest P30,000 in municipal bonds, savings bonds,and treasury bills. He wishes to invest a minimum of P 5,000 in each of the three. If the interest rates are 12% for municipal bonds, 8% for savings bonds, and 10% for treasury bills, how much should he invest in each?
Q: The Data Table function requires three variables. O True O False
A: A data table cannot accommodate more than two variables as of now there are two types of variables…
Q: Determine possible applications for self-service kiosks, ATMs, and point-of-sale terminals. List ATM…
A: Given: The application in ATM is self-service kiosks, point of sale terminal. To define the ATM…
Q: In 2016 Beth purchased a 10-year, 3.20% p.a. semi-annual paying coupon bond with a Face Value (FV)…
A:
Q: The expected inflation rate is 8%. If the current real rate of interest is 4%, what should the…
A: Nominal rate of interest does not take into account inflation factor. But real interest rate must be…
Q: (Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation relationships) The 11-year, $1,000…
A: A Bond refers to a concept that is defined as an instrument that represents the loan being made by…
Q: A man has a simple discount note for $6,100, at an ordinary bank discount rate of 8.53%, for 60…
A: Discount rate is 8.53% Time period 60 days Face value of note is $6,100 To Find: Effective interest…
Q: Pharaoh, Inc. has four-year bonds outstanding that pay a coupon rate of 7.0 percent and make coupon…
A: Yield to Maturity The expected return that an investor can obtain by buying a bond at a given market…
Q: The current zero-coupon yield curve for risk-free bonds is as follows: What is the price per $100…
A: Information Provided: Face value = $100 Period of bond = 2 years YTM for 2 year = 5.47%
Q: How can you know whether a project will be profitable? What purpose does TCO serve?
A: The management evaluates the project before accepting the project, the management has to decide…
Q: You have just sold your house for $1,100,000 in cash. Your mortgage was originally a 30-year…
A: Given, Value of house $700,000 Rate is 5.25%Term is 30 years
Q: A vertical common-size income sheet expresses each category of the income statement as a percentage…
A: Financial statements are the statements where the performance of the organization is shown. The…
Q: How much money would be accumulated in year 10 if you deposit 1000 in years, 0, 2, 4, 6, 8, and 10…
A: Simple interest is one of the oldest and simplest forms of calculating interest. Under this method,…
Q: Financial products go through a lifecycle as well; however, the stages of the product lifecycle for…
A: Financial products are intangible products that meet our financial needs. Examples of financial…
Q: Which asset below is generally the most suitable benchmark measure of the risk-free return?…
A: Risk free rate is rate of return which is quite certain an can be attained without any problem and…
Q: (Related to Checkpoint 9.1) (Floating-rate loans) The Bensington Glass Company entered into a loan…
A: Floating rate changes in every period depending on the reference point. When LIBOR is taken as a…
Q: oal Seek is limited to a single parameter. Group of answer choices True False
A: Goal seek works only on a single parameter but it can used on multiple cells. If there are multiple…
Q: Show your complete solution. Almirah wants to have P50,000 at the end of 4 years for her graduation…
A: Counting refers to earning interest on interest. The compounding rate of interest and simple…
Q: Julianne Zaslow just inherited $100,000 from her great aunt Abigail. Julianne and her partner are…
A: Given, Mortgage loan amount is $275000 APR is 4.25% Term is 30 years
Q: McConnell Corporation has bonds on the market with 15 years to maturity, a YTM of 7.0 percent, a par…
A: A Bond refers to a concept that is defined as an instrument that represents the loan being made by…
Q: A bank offers an account with an APR of 5.8% and an EAR of 5.88%. How does the bank compound…
A: APR is the annual percentage rate. It refers to the quoted rate or the nominal rate. EAR is the…
Q: What would you expect the nominal rate of interest to be if the real rate is 2.75% and the expected…
A: We have the real rate of interest and the inflation. We need to determine the nominal rate of…
Q: Alyson, another investor, has also purchased an IIP for the original price of $984.31767830979. Two…
A: The PV of an asset provides the investors with the actual worth of the future cash flows of the…
Q: Upon the birth of their first child, a couple deposited $5000 in an account that pays 8% interest…
A: Information Provided: Interest rate = 8% compounded continuously Amount deposited = $5000 Period of…
Q: Closing prices for Sillech and New Mines for the years 1999-2014 are shown below. a. Calculate the…
A: To Find: Total return for each stock Expected return Variance Standard Deviation Co-Variance
Q: From a corporation's point of view, does the tax treatment of dividends and interest paid favor the…
A: The firm raises the capital through debt and equity financing. Debt holders are paid interest and…
Q: Given an effective annual rate j₁ = 6.12500%, find the equivalent nominal rate ¡(12). O a. 4.82719%…
A: Effective annual rate is the rate where the interest is determined after considering the compounding…
Q: pose Find the exponential function that describes the amount in the account after time t, in year:…
A: Future value of amount today is amount being deposited and amount of compounding interest…
Q: What is the formula used for the questions without using excel?
A: Daily Withdrawals = $175 Time Period of Withdrawal = 21 Days Interest Rate on Withdrawals = 28%
Q: For the next 7 years, you expect to receive equal payments at the beginning of each year. Today, you…
A:
Q: 0.Analyze the relationship between the federal budget and national debt. Explain how a federal…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Integrative: Complete investment decision With the market price of gold at C$1,562.50 per ounce (CS…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: iven a bond with a coupon rate of 10% semi-annual interest, if the YTM is 11%, which statement is…
A: If the Coupon rate of the bond is less than YTM, then Bond is trading at Discount If the Coupon rate…
Q: Find the value today of a cash flow stream that pays $3,000 for three years and then zero dollars…
A: Given, Rate is 6% compounded continuously Cashflows $3000 for 3 years
Q: In other words, if you borrow $100, you must pay back $117.55 two weeks later. If you can’t pay…
A: Characteristics of a payday loan are known. We have to find the APR and EAR of the loan. We have to…
Q: You purchased 1,000 shares of a mutual fund at an offer price of $13.28 per share. Several months…
A: Return on investment = (P1 - P0 + Dividend)/P0 Where P1 = Closing Price P0 = offer price
Q: You are considering purchasing shares in a company that has a beta of 0.9. The average return for…
A: The risk-free rate means the investment that carries no risk and the returns provided by it refer to…
Q: Assuming that a decedent left no valid last will and testament, which of the following assets will…
A: Solution: D) III and IV
Q: Type only your answer in the space provided below with the $ and no spaces, rounding the answer to…
A: The closing costs of a loan are the amount of upfront payment that a borrower needs to provide to…
Q: 3. Don Magellan borrowed today from Ginoong Lapulapu P300,000.00 and agreed to repay the loan with 4…
A: Loan amount (PV) = P300,000 Number of monthly payments (n) = 4 Interest rate = 12% Monthly interest…
Q: A bond makes annual coupon payments of R75. The bond matures in four years, has a par value of…
A: Here, To Find: Yield to maturity (YTM) =?
Q: Which is least likely? A. For the risk-seeking manager, no change in return would be required for…
A: Risk and return both are related to each other and depending upon the nature of managers or…
Q: LTD company issued ten-year bond two years ago with a coupon interest of 13% paid every six-month,…
A: To calculate the price of bond we will use the below formula Price of bond =…
Q: You have a loan outstanding. It requires making nine annual payments of $5,000 each at the end of…
A: This is the case of Future Value of annuity Future Value of annuity = PMT * [ {(1+ r)n -1}/r]…
Q: A house costs $148,000. It is to be paid off in exactly ten years, with monthly payments of…
A:
Q: Mrs. Oliver is negotiating to purchase a tract of land from DC Company, a calendar year taxpayer. DC…
A: After-tax cash refers to the cash flow after deducting the amount of tax. It is used for determining…
Q: The unpaid balance at the start of a 30-day billing cycle was $600.91. No purchases were made during…
A: Unpaid balance on the card is the balance outstanding which is yet to be paid to the credit card…
Q: . A company had cash and marketable securities worth $200,000 accounts payables worth $51,000,…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Three government bonds are in issue, bond A, bond B and bond C. each bond has a par value of K100…
A: We have all the information about three bonds. We have to calculate the spot rates for year 1, 2 and…
Q: An investment you are considering is expected to make payments annually forever. The amount of the…
A: Given, The payment is $4.75 Growth rate is 2.9% Amount of investment is $80.
Q: How did it become 0.04768?
A: Here, To Find: Future value of loan =? Equal amount paid after every six months =?
Vince Oliver plans to invest P30,000 in municipal bonds, savings bonds,and treasury bills. He wishes to invest a minimum of P 5,000 in each of the three. If the interest rates are 12% for municipal bonds, 8% for savings bonds, and 10% for treasury bills, how much should he invest in each?
Note: Do not use excel to solve the problem
Step by step
Solved in 3 steps
- A person has $30,000 to invest. As the person's financial consultant, you recommend that the money be invested in Treasury bills that yield 2%, Treasury bonds that yield 4%, and corporate bonds that yield 6%. The person wants to have an annual income of S1160, and the amount invested in corporate bonds must be half that invested in Treasury bills Find the amount in each investment What is the solution? Select the correct choice below and fil in any answer boxes within your choice and the amount in corporate bonds is S O A. There is one solution The amount in treasury bils is S (Type integers or decimals) the amount in treasury bonds is S O B. There are infinitely many solutions The amount in treasury bills is S where z is any real number (Simplify your answers) the amount in treasury bonds is S and the amount in corporate bonds is Sz. O C. There is no solutionYou have $10,000 cash that you want to invest. Normally, you would deposit the money in a savings account that pays an annual interest rate of 6%. However, you are now considering the possibility of investing in a bond. Your alternatives are either a nontaxable municipal bond paying 9% or a taxable corporate bond paying 12%. Your marginal tax rate is 30% for both ordinary income and capital gains. (The marginal tax rate of 30% means that you will keep only 70% of your bond interest income.) You expect the general inflation rate to be 3% during the investment period. You can buy a high-grade municipal bond costing $10,000 that pays interest of 9% ($900) per year. This interest is not taxable. A comparable high-grade corporate bond for the same price is also available. This bond is just as safe as the municipal bond but pays an interest rate of 12% ($1,200) per year. The interest for this bond is taxable as ordinary income. Both bonds mature at the end of year 5.(a) Determine the real…Assuming that you run a small business and need P50,000 of financing, you can either take out a P50,000 bank loan at a 10 percent interest rate, or you can sell a 30 percent stake in your business to your neighbor for P50,000. Supposing that your business earns only at P15,000. What will you choose? Equity Financing or Debt Financing? Show the computations for the two financing decisions.
- 12. Patrick and Ben are planning to borrow $34,500 for 150 days to buy some property. Bank A charges 15.75% exact interest while Bank B charges 10.5% ordinary interest. 12a) How much interest is charged at bank A? 12b) How much interest is charged at bank B? 12c) Which bank offers a better deal? 13. Bank A charges ordinary interest, while bank B charges exact interest. You want to borrow $8,000 for 172 days at 11% 13a) How much interest is charged at bank A? 13b) How much interest is charged at bank B? 13c) Which bank offers a better deal?Hi Bartleby Expert, I'm having some issues calculating a question in Corporate Finance, and i was hoping you could help me out!"The amount required for the building is $4,000,000,000. Assume Peter receives the amount needed for the construction on January 1st 2022. All the bonds that Peter issues carry an annual interest rate (yield) of 1.7%. Question ACalculate the price on January 1st, 2022, and on January 1st, 2025, for a bullet bond issued at par on January 1st, 2022, paying a coupon once a year until maturity on January 1st, 2028. Assume the yield is constant at 1.7% throughout the life of the bond. Calculate also the total payment, interest payment, and remaining face value on the 1st of January of every year between 2022 and 2028 for this bond."You have $10,000 cash, which you want to invest. Normally, you would deposit the money in a savings account that pays an annual interest rate of 6%. However, you are now considering the possibility of investing in a bond. Your marginal tax rate is 30% for both ordinary income and capital gains. You expect the general inflation rate to be 3% during the investment period. You can buy a high-grade municipal bond costing $10,000 that pays interest of 9% ($900) per year. This interest is not taxable. A comparable high-grade corporate bond is also available that is just as safe as the municipal bond but pays an interest rate of 12% ($1,200) per year. This interest is taxable as ordinary income. Both bonds mature at the end of year 5.(a) Determine the real (inflation-free) rate of return for each bond.(b) Without knowing your MARR, can you make a choice between these two bonds?
- The amount the bank is willing to loan you to start your business is not enough to cover the initial investment you need to make. You need an additional $10,000. You approach an investor and ask him to invest $10,000 in your business. In return, you offer to pay him $500 out of your profits at the end of years 1-4 and an amount X at the end of year 5. The investor's annual cost of funds is 10%. How big must X be to induce him to invest in your business?A4) Finance Your bank's current maximum combined loan-to-value is 80%. Joseph is purchasing a home from Mr. and Mrs. Silva for $160,000. Joseph has $32,000 in cash for a down payment and the Silvas have negotiated a seller carryback loan in the amount of $28,000. What is the maximum allowable loan amount?Formulate but do not solve the problem.Kelly Fisher invested a total of $20,000 in two municipal bonds that have yields of 8% and 10% interest per year, respectively. If the interest Kelly receives from the bonds in a year is $1720, how much did she invest in each bond? (Let x and y denote the amount, in dollars, invested at 8% and 10%, respectively.) = 20,000 = 1720
- 1. Zaggy Zargawhoop has an idea for a new business. In order to develop his idea, he needs to invest $600 today. Zaggy's idea will pay off $690 next year for certain. Suppose that Zaggy has no savings to fund his idea and has to borrow money from the bank. a. Suppose that the interest rate for borrowing and for lending is 12%. Should Zaggy borrow money from the bank to fund his idea? b. Suppose that the interest rate for borrowing and for lending is 22%. Should Zaggy borrow money from the bank to fund his idea? Now suppose that Zaggy has $600 in his bank account. c. Suppose that the interest rate for borrowing and for lending is 12%. Should Zaggy withdraw his savings to fund his idea? d. Suppose that the interest his savings to fund his idea? e. Does the method of financing (whether through savings or debt) appear to affect the relationship between the interest rate and the decision to undertake investment? Explain. for borrowing and for lending is 22%. Should Zaggy withdrawSuppose you have just inherited $10,400 and are considering the following options for investing the moneyto maximize your return:Option 1: Put the money in an interest-bearing checking account that earns 3%. The FDIC insures the accountagainst bank failure.Option 2: Invest the money in a corporate bond with astated return of 6%, although there is a 10% chance thecompany could go bankrupt.Option 3: Loan the money to one of your friend’sroommates, Ayesha, at an agreed-upon interest rate of7%, but you believe there is a 7% chance that she willleave town without repaying you.Option 4: Hold the money in cash and earn zero return.a. If you are risk-neutral (that is, neither seekout nor shy away from risk), which of the fouroptions should you choose to maximize yourexpected return? (Hint: To calculate the expectedreturn of an outcome, multiply the probabilitythat an event will occur by the outcome of thatevent and then add them up.)b. Assume that Option 3 and Option 4 are your onlychoices. If…This is a Debt Coverage Ratio or DCR question for part a and a CAP rate question for part b]. Wendy is going to purchase a commercial building and is working with a commercial lender at her local bank. The bank has some loan parameters that Wendy must follow. Understanding the rules will allow her to calculate her cash, income, and payment projections. The bank requires a 1.4 debt coverage ratio for her project. Wendy needs to calculate her net operating income or NOI first. The debt coverage ratio is based on this number. Then she will apply for a 20 year loan at 5% with annual payments. Information on the property includes: Gross rents- $780,000 Vacancy 5% Salaries $85,000 Other Fixed Expenses $125,000 Variable Expenses 20% of gross rents. NOI=_________________ Use the NOI and Debt Coverage requirement to calculate the answer. What is the largest annual payment the bank will allow? If Wendy had to buy the property at a 6% CAP (capitalization) rate, what is the asking price?