A company wants to buy a new machine for $5 million. The machine can be used for 7 years. It will generate constant revenues of $1.3 million per year. The annual expenses on maintenance etc are $150,000. The salvage value is $200,000. The depreciation method used is the 150% Declining Balance method. The (after-tax) MARR is 12% and the corporate taxes are 30%. A) Should this project be accepted or not?

Q: Sonny who invested ₱45,800 had ₱82,420 returned to him 4 years and 4 months later. At what interest…

A: Present Value:  The present value is the value of cash flow stream or the fixed lump sum amount at…

Q: Manuel has a $300,000 loan to be paid back with 5.329% interest over 30 years. What are Manuel's…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Which one of the following statements is correct? The dividend growth model can be used to compute…

A: In finance we often use the dividend growth model to value stocks. The model is based on the premise…

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A: Effective Annual Rate: It refers to the rate of interest earned on an investment or charged on a…

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Q: Your bank pays 8% interest, compounded semiannually. Use Table 12-1 to find the future value (in $)…

A: Future Value of Annuity Due refers to the concept which dictates the compounded value of a sum of…

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A: Chief financial officer also known as CFO is the senior executive responsible regarding the…

Q: Thomas planned to buy a house but could afford to pay only $11,000 at the end of every 6 months for…

A: A mortgage is a loan taken out on a property where the collateral is the property itself.

Q: Given: 27,000 shares cumulative preferred stock ($5.25 dividend per share): 54,000 shares common…

A: Solution:- Dividend is the amount of return granted to shareholders of a company.

Q: olcano Inc. received $1,000 cash in advance for work to be performed. How will this transaction…

A: Solution:- When an income is received in advance, it is treated as liability because service to be…

Q: Finding the Term( answer any 2) 1. How long will it take for P28, 280 amount to 37, 640 if invested…

A: Future Value: The future value is the amount that will be received at the end of a certain period.…

Q: what is the interpretation of full-time equivalents (FTEs) when calculating number of total…

A: FTE is a measurement unit which is used to compare different workloads of employees i.e Part time…

Q: Please explain the rationale why "There is no constant growth in dividends" in your example?…

A: Dividend-It is a distribution of company's profit to a class of its shareholders. The amount of…

Q: Suppose withdrawals of 10,000 every year starting at time 8 will be made and will go on forever. How…

A: Annual Withdrawals is 10,000 Time Period is forever Annual Withdrawals starts at Time 8 Effective…

Q: when comparing a firm's ratios to an industry, is it bad to he below average? explain your answer…

A: In finance we often use financial ratios to determine and evaluate the financial health and position…

Q: How much do you have to deposit today so that beginning 11 years from now you can withdraw ​$…

A: Amount to be withdrawn per year is $8,000 Rate of interest is 5% Amount to be received at the end is…

Q: Property worth $77,490.00 can be purchased for 10% down and mortgage payments of $1355.00 at the end…

A: Present value of an annuity can be calculated using the given formula: = Annuity Amount * Present…

Q: What are the different factors affecting the requirements of working capital? Enumerate.

A: Working Capital- It is the fund that is required by a company for managing its day -to-day working…

Q: 24 The likely effect of discounting nominal cash flows with real interest rates will be to: A make…

A: Net Present value is present value of cash flow minus initial investment

Q: You bought a car worth $30,000 that is expected to depreciate at a rate of 12% per year, compounded…

A: Solution:- Depreciation is the wear and tear cost of using an asset.

Q: What is the effective annual rate of interest on the additional 10% of house value borrowed on the…

A: Effective Annual Rate of Interest: It refers to the effective rate of the annual stated rate and…

Q: An application for an individual Disability Income policy may require all of he following…

A: Disability income policy is an insurance policy which protects the insured against loss of monthly…

Q: The stock of Lead Zeppelin, a metal manufacturer, currently sells for $65 and has a volatility of 46…

A: Put options are contracts that provide option buyers the right to sell or sell the underlying…

Q: On October 24, you plan to purchase a$1500 computer by using one of your two credit cards. The…

A: As per the information provided: Date Cash flow Net balance 1-Oct 0 0 24-Oct -$1500…

Q: The Treasury Department issues a 10-year coupon bond on January 1st, 2022. The first coupon is due…

A: Bond value The present bond value is the present value of all future cash flows. The cash flows…

Q: Assume that Firms U and L are in the same risk class and that both have EBIT=$500,000. Firm U uses…

A: MM Proposition I without taxes Under this proposition, the value of levered firm and the value of…

Q: 1. . Identify the given statement whether simple annuity or general annuity.   A. Installment…

A: The simple annuity is which payment and interest compounding is same but in general annuity both may…

Q: 22 OLG stock has a beta of 0.98 and an expected return of 10.52 percent. The risk-free rate of…

A: The capital asset pricing model is used for pricing securities and calculating their expected…

Q: An aggregate crasher is expected to cost P60, 000 and has an estimatedlife of 5 years. Maintenance…

A: Here we will use the concept of time value of money. As per the concept of time value of money the…

Q: Black-Scholes. A European call style option is made for a security currently trading at $ 55 per…

A: Here, To Find: Using Black Scholes Model Call Option Price =? Put Option Price =?

Q: A home loan package offers a fixed 2.4% p.a. compounded monthly for the first 5 years, and after 5…

A: Interest rate compounded monthly for first 5 years is 2.4% Interest rate compounded monthly after…

Q: A project your firm is considering for implementation has these estimated costs and revenues: an…

A: The costs incurred to keep the machinery in a working position are known as maintenance charges.…

Q: An infrastructure project has a timeline of 15 years and starts on the first day of the coming…

A: Time period of project is 15 years One time expense at t=0 is $1.6 million Annual expense  is $12…

Q: Explain on the effects of rising inflation rates on the economy. How can the rising inflation rate…

A: By boosting the prices of the products inflation generally reduces your purchasing power. Inflation…

Q: Property worth $77,490.00 can be purchased for 10% down and mortgage payments of $1355.00 at the end…

A: Solution:- When an equal amount is paid each period at the end of period, it is called ordinary…

Q: kura would like to buy a house and their dream home costs $500,000.  Their goal is then to save…

A: Future value of money includes the amount of money invested and amount of interest collected over…

Q: flows for an investment with an economic life of 5 years are as follows: k0 = -10000, k1 = k2 = k3 =…

A: The net present value is the difference between the present value of cash flow and initial…

Q: 4. Your firm is evaluating a project that should generate revenue of P4,600 in year 1, P5,200 in…

A: In this question, we need to calculate the future value of each year's revenue at the required…

Q: What is the maximum interest rate the borrower will pay during the 30-year term for this loan? If…

A: Data given:  Start rate = 3.50% Life time Interest cap rate = 6%  Margin on the loan= 3.00%

Q: A project capitalized for ₱25,000 invested in depreciable assets will earn a uniform, annual income…

A: Here, Investment = I = P 25,000 Uniform annual income = P 29,647 O & M cost = P 5,000 Taxes and…

Q: 10 An unlevered firm has a cost of capital of 12.46 percent and a tax rate of 35 percent. The firm…

A: Unlevered cost refers to the cost of a company which is completed based on equity financing and debt…

Q: If the MARR is 12% per year, look for the best alternative with the method: a. Net Present Value b.…

A: Net present value (NPV) of an alternative/project refers to the variance between the initial…

Q: Provide a list of the five risk-control strategies and a short description of each.

A: Avoidance of risk is a naturally occurring precaution taken by most businesses when they’re aware of…

Q: Still need answers and details for B and C?

A: the minimum number of cartons per year that can be supplied. the highest fixed costs that could be…

Q: How does a financial manager monitor and evaluate a firm’s financing?

A: Financial management refers to the art of managing the money of the firm in order to meet its…

Q: Today, you signed loan papers agreeing to borrow $4,954.85 at 9% compounded monthly. The loan…

A: When a loan is compounded it means that the loan reduces as per the reducing balance method. This…

Q: You would like to retire with P1 million on your 60th birthday. If you start saving equal annual…

A: Amount required at retirement is P1,000,000 Interest rate is 10% Start date is 26th birthday End…

Q: Michey Lawson is considering investing some money that he inherited. The following payoff table…

A: Here, To Find: What kind of decision-making environment is this =?

Q: A car dealer carries out the following calculations. What is the annual percentage rate?   Lis…

A: The annual percentage rate is the rate of return that is paid each year for the borrowing that is…

Q: $1500 is invested semi-annually for 3 years into a fund that pays 6.8% per year, compounded semi-…

A: Solution:- When an equal amount is deposited each period, it is called annuity.