5.6 Historical and Exponential Depreciation 1. Sandi's new car cost her $24,000. He was told that this make and model depreciates exponentially at a rate of 9.5% per year. How much will her car be worth after 63 months?
Q: Suppose that XTel currently is selling at $50 per share. You buy 800 shares using $30,000 of your…
A: Purchase Price of Share is $50 No. of Shares is 800 Own Money is $30,000 Rate on Margin Loan is 7%
Q: Zachary Company is considering investing in two new vans that are expected to generate combined cash…
A: Net present value is a capital budgeting technique that evaluates a project on the basis of the…
Q: A s s e t V a l u a t i o n M o d e l s f o r M e r g e r s a n d A c q u i s i t i o n…
A: a) A long-run view of the merged firm's earnings per share (EPS) is important because it helps to…
Q: nce Crown Plc has issued irredeemable (perpetual) preference shares with a nominal value of £20…
A: Preference shares are hybrid types shares they have features of bonds and equity both. They are paid…
Q: Suppose a stock had an initial price of $93 per share, paid a dividend of $2.40 per share during the…
A: Ratio analysis refers to the comparison of two mathematical expressions taken from the financial…
Q: An interest rate floor: OA) obligates both parties to trade at a preset price at a future date B)…
A: An agreement that sets a minimum interest rate on a loan or other financial instrument is known as…
Q: Suppose that the NASDAQ Composite index hit a level of 4,682 in February of 2005. In February of…
A: ending value = e = 4682 Beginning value = b = 2040 Time = t = 12 (2005 - 1993)
Q: An Investment scheme is generating returns of Rs.65,000 per year for first two years, from third…
A: Here, Discount rate = 10% Growth rate = 4% Year 1 returns = Rs. 65,000 To Find: Present value of…
Q: Cross rates and Arbitrage: Suppose the Japanese yen exchange rate is Yen116 = $1 and the British…
A: Arbitrage refers to the strategy of earning profits by exploiting the difference in prices of the…
Q: Give typing answer with explanation and conclusion Consider the following two banks: • Bank A has…
A: To calculate the change in the values of the assets and liabilities for each bank given an expected…
Q: We are examining a new project. We expect to sell 8,800 units per year at $191 net cash flow apiece…
A: a) To calculate the NPV (Net Present Value) of the project and the value of the option to abandon,…
Q: Which of the following is false about diversification? Select one or more: a. diversification…
A: Diversification means the strategy of spreading investments across different assets, sectors or…
Q: Your boss has asked you to evaluate a project with the following cash flows: Year 0 1 2 Cash flow…
A: IRR is a capital budgeting tool to decide on whether the capital project should be accepted by the…
Q: Pfizer Inc is an American multinational pharmaceutical company. After extensive medical and…
A: 1. Net present value (NPV) is a capital budgeting method used for making investment decisions. NPV…
Q: is the income statement information from Apollo Medical Devices. Identify the co $thousands les…
A: The items of the income statement that are directly involved with the operation of the company are…
Q: Compute the investment's Compute the investment's annual income and annual net cash flow payback…
A: Sales units 10600 Selling Price 90 Particulars Amount $ Sales 954000 Material ,…
Q: 1. Given the following data on 13th March 2007: Interest rate on 12-month German T-bills: 4%…
A: Given: Spot exchange Rate, 1 Euro, S=154.2 Yen Interest rate German t bill, Rhome= 4% Interest rate…
Q: Stock Z has a beta of 1.4, and its required rate of return is 10.00%. Stock B's beta is 0.80. If the…
A: In the given case, we have provided the stock Z beta, required rate of return and risk free rate.…
Q: An investment of 1000 is to be used to make payments of 100 at the end of every year for as long as…
A: It's a time value of money concept based question. The concept needs to be applied several times to…
Q: e. Unrelated to the new product, Cory is analyzing two mutually exclusive machines that will upgrade…
A: NPV is a Capital budgeting techniques which help in decision making on the basis of future cash…
Q: Find the future value. (Use the Table 12.1.) (Do not round intermediate calculations. Round the "FV…
A: Future value refers to the method of capital budgeting which is used for the value of a current…
Q: TerraGroup has computed the net present value for capital expenditure at two locations. Relevant…
A: Select financials of two projects have been given. We have to find the preset value index of each…
Q: A) You bought a 10-year US bullet bond for $990 with a coupon rate of 4.3%/year. A) Is the market…
A: A) Since the bond was purchased at a discount, meaning below the face value, the market rate is…
Q: Which of the following statement is least likely to be correct? - The WACC is used to find the…
A: WACC is the weighted average cost of capital. It represents the average cost of capital after tax of…
Q: Company Z forecasts a positive Free Cash Flow for the coming year, with FCF1 = $20,000,000, and it…
A: Free cash flow (FCF 1)=$20,000,000 Growth rate for next two years=20% In year 3, growth rate=5%…
Q: B r i e f l y d e s c r i b e e a c h o f t h e f o l l o w i n g t y p e s o f m e r…
A: Horizontal mergers involve the combination of two companies in the same industry or market, which…
Q: Which of the following is false about diversification? Select one or more: a. diversification only…
A: Introduction: Diversification is a risk management strategy. A diversified portfolio have a mix of…
Q: manages the Zero Emission Vehicle program, which has been adopted by 10 other states as well. Those…
A: This is about company called Tesla which is an electric Vehicle company and energy generation…
Q: Denim Industries can borrow its needed financing for expansion using one of two foreign lending…
A: The effective interest rate is an important concept in finance .The effective interest rate…
Q: An inverted yield curve Part 1 A. results when investor demand for longer maturities exceeds the…
A: the yield curve is a graphical representation of the relationship between the interest rates of…
Q: The plant manager of Shenzhen Electronics Company is considering the purchase of new automated…
A: Pay back period refers to time period in which initial investment of the project is recovered by the…
Q: C a p i t a l R a i s i n g f o r C o r p o r a t i o n s D e s c r i b e t h e d i r e c…
A: a) Issuance of $1 par value common stock at an amount greater than par value: Increase in book value…
Q: The portfolio weights for a portfolio that has 150 shares of Stock A that sell for $50 per share and…
A: The amount invested in stock A is calculated below: Value of Investment in Stock A = No. Of Share ×…
Q: You are considering a project that has the following cash flow data. What is the project's payback?…
A: The term "payback period" refers to the amount of years needed to recoup the initial monetary…
Q: T o p i c : I n t r o d u c t i o n t o F i n a n c i a l M a r k e t s W h a t d i f f e…
A: Financial Market consist of Primary and Secondary market which are regulated by Securities Act 1933…
Q: Determine the MIRR using a financing rate of 16% and a reinvestment rate of 20% using the following…
A: Modified internal rate of return is the modern method of capital budgeting that is used to determine…
Q: Find the accumulated value of a 12-year annuity-immediate of 100 per year if the effective rate of…
A: The accumulated value of an annuity is to be found out. Only caution here, is that interest rate…
Q: ou have a portfolio that is equally invested in Stock F with a beta of 1.09, Stock G with a beta of…
A: Portfolio beta will be the sum of multiply of weight and beta of each stock. Portfolio Beta =Weight…
Q: AlphaDog Corp Ltd. is a company with a remarkably stable dividend paying policy. It also chooses not…
A: To calculate the maximum amount you should be willing to pay, you can use the formula for the…
Q: en the following information estimate the price of this corporate bond. Assume that the bond just…
A: Price of bond is the present value of coupon payments plus present value of par value of bond based…
Q: Stock Y has a beta of 0.9 and an expected return of 11.4 percent. Stock Z has a beta of 1.5 and an…
A: Expected return is an important metric in investment analysis, as it helps investors assess the…
Q: Which of the following is FALSE about the differences between ETFs and Mutual Funds? Select one or…
A: Several statements have been given as a difference between ETFs and Mutual Funds. We have to find…
Q: Expected Return 2398 20% 15% 10% 5% 0% F In 0%
A: In portfolio there should be optimal combination of risk and return and risk and return both are…
Q: You are a shareholder in a corporation. The corporation earns $5 per share before taxes. After it…
A: You will received dividend per share from corporation which will be paid after deducting the…
Q: Which of the following two investment opportunities is preferred if you have a discount rate of 14%,…
A: 1. Net present value(NPV) is calculated by deducting initial investment from present value of cash…
Q: Your company follows a constant debt-to-equity ratio policy. Its debt is represented by a single…
A: (Assume a Modigliani Miller world without taxation. In such a world, the value of a firm is…
Q: Finance A company is considering buying a machine that would give a net cost savings of $85,000 per…
A: The profitability index refers to the measure of the attractiveness of the project. It is calculated…
Q: Give reasons why multinational corperations expand overseas and how they manage the exchange rate…
A: Multinational corporation is said to be the company that operate in various countries that include…
Q: what is the bond equilavent yield on a 90-day treasury bill that has a bank discount yield of 2.07…
A: We have to find the bond equivalent yield, given the bank discount yield.
Q: Newport Corporation is considering the purchase of a new plece of equipment. The cost savings from…
A: Net present value is one of the important calculation done in capital budgeting. Under this, present…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 4. A new car sells for $29,700. It exponentially depreciates at a rate of 6.35% to $24,300. How long did it take for the car to depreciate to this amount? Round your answer to the nearest tenth of a year.W S A new car sells for $29,700. It exponentially depreciates at a rate of 6.35% to $24,300. How long did it take for the car to depreciate to this amount? Round your answer to the nearest tenth of a year. PA-24500 12671525 7100 62 (0 9 686. When you buy a vehicle and take it out of the dealership, it begins to depreciate. Rosa got an offer for a car for $16,069, which has a residual value of $1,981 and a useful life of 6 years. What is the percentage of depreciation of the cost of the car per year? Indicate if you think the offer is convenient for Rosa and explain your answer. A. Identify the data and establish the relationship between them. B. Resolve the relationship by presenting the procedure and answer the question in a complete sentence
- 16. Miss Maream bought a piece of land near to the beach at a price of RM 788,000. The value of the land has slowly been decreasing by 0.6% annually. (i) Write the exponential decay function to model the depreciation of the land price. (ii) How much will the land be worth in 30 years? (iii) How long does it take for the price of the land to become half of its original price?The value of a piece of equipment depreciates exponentially. It cost $250,000 new. Each year it depreciates at a rate of 11% of its original purchase price. Determine the value of this equipment after 5 years. Round to the nearest dollar. ANS 8)Suppose a new car is purchased for $41,357 and depreciates by 21% over the first year of ownership. Find the depreciation of the car over the first year. $… If the car is driven 12,870 miles in that year, what is the cost, in dollars per 100 miles driven, for depreciation? (Round your answer to the nearest cent.) …? Dollars per 100 miles
- A person bought a car for $21,011. After 3 years, the car was worth $12,003. Assume that the price is decreasing according to the continuous exponential decay model PP. a. Find the annual depreciation rate, r, to the nearest tenth of a percent. b. Find the value of the car after 5 years to the nearest hundred dollars. a. What is the annual depreciation rate? (Do not round until the final answer. Then round to one decimal place as needed.) b. What is the value of the car after 5 years? (Round to the nearest hundred dollars as needed.)16. A company purchases a piece of construction equipment. The expected income is SAR 3,100 annually for its useful life of 15 years. Expenses are estimated to be SAR 355 annually. If the purchase price is SAR 25,000 and there is no salvage value, what is the rate of return, neglecting taxes? (select the closest answer) a) 5.2% b) 6.4% c) 6.8% d) 7.0%2. Smith Hauling purchased an 18-wheel truck for $100,000. The truck depreciates at the constant rate of $10,000 per year for 10 years. a. Write an expression that gives the value y after x years. b. When is the value of the truck $55,000?
- 27. Guy bought a new car for $27,000 and kept it for 5 years. The value of thecar after that time was $10,450. What was the rate of depreciation? A. 38.7%B. 61.3%C. 17.3%D. 31.7%59. What is the depreciation factor per year of a hand tractor that is bought at P150, 000.00, if it has no more value at the end of the fifth year? a. 25,000 pesos/year b. 30,000 pesos/year c. 60,000 pesos/year d. 15,000 pesos/yearFast Deliveries, Incorporated (FDI), was organized in December last year and had limited activity last year. The resulting balance sheet at the beginning of the current year is provided below: FAST DELIVERIES, INCORPORATED Balance Sheet at January 1 Liabilities: Assets: $ 400 Cash $ 11,100 760 Accounts Receivable. Supplies Accounts Payable: Stockholders Equity: Common Stock 620 11,650 430 Retained Earnings $ 12,480 Total Assets $ 12,480 Total Liabilities and Stockholders' Equity Two employees have been hired, at a monthly salary of $2,860 each. The following transactions occurred during January of the current year. January 1 $5,100 is paid for 12 months' insurance starting January 1. (Record as an asset.) $4,800 is paid for 12 months of rent beginning January 1. (Record as an asset.). 2 3 FDI borrows $30,000 cash from First State Bank at 6% annual interest; this note is payable in two years. 4 5 A delivery van is purchased using cash. Including tax, the total cost was $28,800.…