(b) Given that nothing else is borrowed in the near future, the length of time it will takea government to completely eliminate its stock of debt will be entirely dependent onhow much more annual repayments exceed the annual interest expenses. Theinterest expense portion of the debt is a function of the present stock of debt, y, andis given byi(y) %3D у — у?The amount of money that the government repays to reduce its debt stock isassumed to be a fraction, a, of the present stock of debt. Repayment is done at theend of each financial year.(i)(ii)Solve for the present stock of debt, y, as a function of t.What will happen to government debt as t → o? Justify your response.

Yield to maturity (YTM) is the overall rate of return a bond will have earned once it has paid all…

Answered: (b) Given that nothing else is borrowed…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Choose the correct letter of answer: Company D's current assets and current liabilities are P200,000.00 and P140,000.00 respectively. How much additional funds can it borrow from banks for short term, without reducing the current ratio below 1.33? a. P13,800.00b. P86,200.00c. P52,612.00d. P35,870.00e. P41,818.00
45. A organisation intends to collect $1,000,000 to fund the construction of a new factory. Which of the comments below is the most accurate?a. Where a fixed rate loan rather than a variable rate bond is used to collect the million dollars, the risk of the loans would be smaller.b. If interest is required to collect the million dollars, the risk of the debt would be cheaper if it is issued as a mortgage rather than a term loan.c. Where the million dollars were collected by debt, however $500,000 is raised as a first mortgage bond on the new plant and $500,000 as debentures, the interest cost on the first mortgage bonds would be lower than if the whole $1 million were generated by the sale of first mortgage bonds.d. If the company's management believes that interest rates are almost likely to increase in the near future, it will be particularly eager to include a call clause included in the indenture.e. None of the above assertions are true.
In this question they say that lenders would need a promised payment of 80 million. How is this solved for in question d. How can i derive this mathmatically
9
Identify a reason why Social Security as it currently exists is unsustainable in the long run. The overall U.S. population is shrinking because of decreasing life expectancy, so soon there would not be enough taxpayers to fund A. the Social Security program. B. Income tax revenues that form the largest source of funds for Social Security programs are projected to decline in the long run. OC. Individual income that is subject to Social Security taxes is capped at about $117,000. D. Corporate income that is subject to Social Security taxes is capped at $1 million.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
135. The information below is taken from a government’s budget. Programmes = 75 Compensation = 55 Interest Payments = 25 Capital Expenditure = 35 Amortisation = 15 Income/Profits Taxes = 50 Value Added Taxes = 60 Import Duties = 45 User Fees = 15 How much is the primary balance? Select one: a. 45 b. −20 c. 25 d. −30 e. 5
Havana, Inc. has identified an investment project with the following uneven cash flows: $0 at Year 0, $950 at Year 1, $1,180 at Year 2, $1,400 at Year 3, and $2,140 at Year 4. Assume the discount rate is 8 percent, what is the future value of these cash flows in Year 4? a) $4,167.62 b) $6,123.60 c) $5,670.00 d) $6,225.08
19. All else being equal, a company would choose to invest in a capital asset if which of the following is true?⦁ If the payback period equals the amount invested⦁ If the expected accounting rate of return is less than the required rate of return⦁ If the expected accounting rate of return is greater than the required rate of return⦁ If the average amount invested is equal to the net cash inflows
Please answer the question attached in the picture below.
1) Which of the following statements about time value of money is not correct? Present value of money is today's value of money. Money grows with interest and time. Value of $1 today is greater than tomorrow. Value of $1 today is less than tomorrow. 2) The present value of a lump sum is: today's value of expected cost savings in the future. today's value of a total future cash flow. today's value of multiple equal payments in the future. today's value of a single payment in the future. 3) ACE Company acquired $500,000 to construct a new warehouse. To obtain this fund, the company issued 3,000 preferred stocks with $100 par value and 8% dividend rate for $300,000 and bonds for $100,000 with 5% interest, and borrowed the rest from its bank with 6% interest rate. The company requires a 3% buffer margin. What is the required rate of return on this project? 7% 12% 10% 13.9% 10.9%
E4

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