What is the return on investment for A? 1. 18% 2.40% 3. 20% 4. 15% 0 1 O 2 O 3 O 4
Q: Question 2 A time value of an investment follows a binomial model where the one step return rate for…
A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…
Q: Find the portfolio risk if 50% of funds is allocated for each. Determine the correlation…
A: A financial portfolio is defined as the collection of financial investments such as bonds, stocks,…
Q: Two investments have the following pattern of expected returns:Investment AYear 1…
A: Part (a): Calculation of BTIRR of the project: Excel spreadsheet:
Q: 5.Given the following cash flow for a certain investment and a MARR of 12% per year: End-of-year…
A: The internal rate of return is the capital budgeting technique used to calculate the rate at which…
Q: 11-2 What is the expected return of the following investment? Probability Payoff 0.3 30.0% 0.2 10.0…
A: The expected return is the minimum required rate of return which an investor required from the…
Q: What is the expected return of the following portfolio of investments, Investment r…
A: expected portfolio return is calculated using the following formula: rp=∑i=1n wi×riwhere,wi= weights…
Q: PROBLEM NO.5 Solve for ERR if 25% Mimimum Attractive Rate of Return 13% Interest Rate External…
A: Concept of ERR
Q: Suppose you buy OMR2000 w the maintenance margin is 3C a. How much have you borrow b. Suppose the…
A: Given: Current worth of stock = OMR 2000 Initial margin = 60% Maintenance margin = 30%
Q: Project 1 has a return, I, of 8.4% and Project 2 has a return rate, I, of 8.1%. The incremental rate…
A: Incremental return rate: It is an additional return that an investor earns when two projects are…
Q: Compute the expected rate of return on investment i given the followinginformation: Rf = 8%; E(RM) =…
A: Capital asset pricing model formula:
Q: If the asset turnover is 1.6, the financial leverage multiplier is 2.1, the return on asset is 25%…
A: The net profit margin can be calculated by combining return on assets and asset turnover
Q: (b) Find the time path of capital K(t) given the following rates of net investment flow functions…
A: Capital is the sum of cash or some liquid assets being used to open a business. It can be used to…
Q: Investment Problem Cost of bldg.. =5M Gross Revenue = 9.5 M Operating expense = 4M Nominal interest…
A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: 11-2 What is the expected return of the following investment? Expected Return Probability Payoff…
A: Expected return of an investment is calculated as below: Please refer to the excel:
Q: QUESTION 13 Suppose an initial investment of $1000 returns $500 at the end of first year, $300 at…
A: The rate of return is negative when the business suffers a loss on its investment amount within a…
Q: Risk-free rate is 7% 2. Calculate the required rate of return for A. 1. 8.90% 2. 8.40% 3. 8.70% 4.…
A: Required return is sum product of expected return and respective probability. Required return = ∑p*R…
Q: Investment Problem Cost of bldg.. =5M Gross Revenue = 9.5 M Operating expense = 4M Nominal interest…
A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…
Q: Consider the following information related to an investment: t+1 t+2 10000, rt 5%; rº, 4%, || t+1 4%…
A: The question is related to Present value of investment at 5% with growth of 4% for 2 years.
Q: Investment Perlod 1 2 3 4 5 $(1,000) $100 264 A $100 $100 $100 $1,100 в (1,000) 264 264 264 264…
A: “Hey, since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: 32. Consider the following three investments. Projects со. с1 c2 2,500 2,500 2,500 Outflow 3,305…
A: NPV is sum of the present value of future cashflows IRR is the rate at which NPV is zero.
Q: use excel 9. A firm faces three investment opportunities A, B and C: A. NPV = $3m, investment =…
A: NPV computes the existing value of future benefits by discounting future worth with a stated…
Q: b. The current market provides a return of 10% and treasury bills yields 3%. i. Calculate the…
A: In the given question we require to calculate the required rate of return of an asset using…
Q: 16. You are considering an investment with the following cash flows: Year Cash Flow 0…
A: Year Cash Flow 0 -$50,000 1 $ 7,000 2 $ 4,000 3 $9,000 4 $61,000
Q: Problem 2: The amount of an investment is represented by f(t) = 4186.58(1.025)*. Algebraically,…
A: Compounding is a technique in which future value of present amount is determined at fixed interest…
Q: You expect to earn 5 5/8%. The future value of this investment is closest to:
A: Information Provided: Principal amount = $11,375 Yearly deposit = $280 Interest rate = 5.5/8% Years…
Q: 24. 4 Write an equatiom for the toral expected return on the investment using the information below.…
A: The expected return on investment: The expected return on investment is the amount that an…
Q: wWhat has been your annualzed growth from your investment in Allstate? OA 183% OB 26 7% OC 35 0% OD…
A: Note: Dividend distribution is a return over the investment so it does not lead to growth…
Q: Original Cost of Investment Selling Price of Investment Distributions Investment Received Percent…
A: % return = (Selling price + Distributions received - Original costs ) / Original costs of investment…
Q: 5. LL Consider the following cash flows of a project: Year Year 1. 50 0. 2. 3. 4. 1. Find the…
A: Internal Rate of Return: The internal rate of return (IRR) is a financial statistic used to evaluate…
Q: a profitability index (PI) of 1.45 ndcates the project generates S0.45 of internal rate of return…
A: Solution Concept Profitability index is mathematically expressed as =present value of inflow/…
Q: 1- Find the internal rate using the method of Internal Rate of Return (IRR) if i = 15%, for the…
A: IRR is the rate at which Present value of cash Inflows is equal to Present Value of cash Outflows…
Q: Investment 1 Investment 2 Investment 3 Investment 4 RATE Answer 7% 6% 1% NPER 10 Answer 4 24 PV…
A: The concept that helps to evaluate the future or present value of the cash flow is term as the time…
Q: What is the internal rate of return (IRR) for this investment? 17. Using the information above, what…
A: IRR or the internal rate of return is an important tool of capital budgeting. IRR is that rate at…
Q: (b) Find the time path of capital K(t) given the following rates of net investment flow functions…
A: Net investment is the cost incurred to purchase the capital assets after subtracting the…
Q: of 15% of ay investment returns above the l-bill răte, d suffers a loss of 10.5%. What rate of…
A: Incentive fee = 15% T-bill rate=2% First year loss=10.5 Rate of return in the second year for…
Q: answer if its true or false 1) Based on the following information calculate the value at time 1 of…
A: In the following question we are given the future value at time 1 is between 103 and 105 and we need…
Q: H.W 1- Find the internal rate using the method of Internal Rate of Return (IRR) if i = 15%, for the…
A: Solved using Excel
Q: You must choose between two investments, X and Y . The profitability index (PI), net present value…
A: Companies have different alternatives to invest their money in, but they should always compare the…
Q: Required Return If the risk-free rate is 10.2 percent and the market risk premium is 4.4 percent,…
A: Given that:Risk free rate is 10.2%Market Risk Premium is 4.4%
Q: 1- Find the internal rate using the method of Internal Rate of Return (IRR) if i = 15%, for the…
A: Internal Rate of Return (IRR) refers to the rate which equates the present value of future cash…
Q: 63%
A: Net profit margin refers to the amount which is generated as a percentage of revenue. It…
Step by step
Solved in 3 steps
- XYZ Company has two divisions, A and B. Information for each division is as follows A B Net earnings for division P 40,000 P 260,000 Asset base for division P100,000 P1,200,000 Target rate of return 15% 18% Operating Margin (ROS) 10% 20% Weighted average cost of capital 12% 12% What is the return on investment for A? 18% 40% 20% 15%…XYZ Company has two divisions, A and B. Information for each division is as follows: A B Net earnings for division P 40,000 P 260,000 Asset base for division P100,000 P1,200,000 Target rate of return 15% 18% Margin 10% 20% Weighted average cost of capital 12% 12% What is the total sales amount for B? P666,667 P800,000 P1,300,000 P1,200,000 Group of answer choices 1 2 3 4XYZ Company has two divisions, A and B. Information for each division is as follows: A Net earnings for division P 40,000 P 260,000 Asset base for division P100,000 P1,200,000 Target rate of return 15% 18% Margin 10% 20% Weighted average cost of capital 12% 12% What is the total sales amount for B? 1. P666,667 2. P800,000 3. P1,300,000 4. P1,200,000 O 1 O 2 O 3 O 4
- XYZ Company has two divisions, A and B. Information for each division is as follows: Net earnings for division Asset base for division Target rate of return Margin Weighted average cost of capital What is the total sales amount for B? 1. P666,667 2. P800,000 3. P1,300,000 4. P1,200,000 A P 40,000 P100,000 15% 10% 12% B P 260,000 P1,200,000 18% 20% 12%Required information Use the following information for the Problems below: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate o on invested capital is 8 percent. Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Sales revenue Income Average investment Sales margin Capital turnover ROI Residual income Division A ? $ 440,000 ? 40% 2 ? ? Division A $ 8,150,000 $ 1,630,000 $ 8,150,000 20 % 1.00 $ 978,000 20% Required: The following data pertain to three divisions of Nevada Aggregates, Incorporated. The company's required rate of return capital is 8 percent. Note: Round "Capital turnover" answers to 2 decimal places. $ $ $ Division B $ 10,000,000 $ 2,160,000 $ 2,600,000 $ Division B 40,300,000 8,866,000 10,075,000 22 % 4.00 88 % ? ? ? 8,060,000 Division C ? $ ? ? 45% ? 40% $ 139,000 Division C 25 % 20 % 471,000XYZ Company has two divisions, A and B. Information for each division is as follows: A B Net earnings for division P 40,000 P 260,000 Asset base for division P100,000 P1,200,000 Target rate of return 15% 18% Margin 10% 20% Weighted average cost of capital 12% 12% What is the operating asset turnover for A? 0.15 0.10 4.00 2.50 Group of answer choices 1 2 3 4
- The following info is provided for three operating divisions. The minimum accepted rate of return by the investor is 7%. Division M N P invested assets 14,000,000 86,000,000 840,000 Compute Return on Investment for: a. Division M type your answer... b. Division N type your answer... c. Division P type your answer... sales net income Compute Residual Income for: 25,000,000 112,000,000 1,750,000 d. Division M$ type your answer... e. Division N $ f. Division P$ type your answer... type your answer... 50,000,000 250,000,000 6,000,000 g. What division looks like the best division? type your answer...XYZ Company has two divisions, A and B. Information for each division is as follows: A Net earnings for division P 40,000 P 260,000 Asset base for division P100,000 P1,200,000 Target rate of return 15% 18% Margin 10% 20% Weighted average cost of capital 12% 12% What is the operating asset turnover for A? 1. 0.15 2. 0.10 3.4.00 4. 2.50 0 1 O 2 O 3 O 4Shalom Company provided you the following data: Average operating assets 120,000 Margin on sales Minimum required rate of return Return on investment Sales Turnover What is the residual income? 15% 20% 25% 300,000 2.50
- The following selected data pertain to Badang Company's Jaja Division for 2021: Sales Variable costs Traceable fixed costs Average invested capital Imputed interest rate P1,000,000 600,000 100,000 200,000 15% How much is the return on investment? 200% 75% 135% 150%Kyle Corporation provides the following information for the Product Division and Service Division for the year. Product Division Service Division 420,000 $ 650,000 195,000 245,000 640,000 610,000 14.0% 14.0% Net sales Operating income Average total assets Target rate of return $ Requirement 1. Calculate the return on investment for each division. (Enter answers as a percent rounded to the nearest hundredth percent, X.XX%) The return on investment for the Product Division is The return on investment for the Service Division is Requirement 2. Which division has the highest ROI? % % Requirement 3. Calculate the residual income for each division. (Round answers to the nearest whole dollar.) The residual income for the Product Division is The residual income for the Service Division is Requirement 4. Which division has the highest residual income?Consider the following data from two divisions of a company, P and Q: Divisional P Q Sales $ 2,000,000 $ 1,100,000 Operating Income $ 800,000 $ 660,000 Investment $ 3,200,000 $ 1,760,000 If the minimum rate of return is 9%, what is Division P's residual income (RI)?