Baguio Rabbitry must replace the piping system in its barn. Based on cost of capital of 12% which of the two following alternatives should be chosen using the following methods? a) RORAI b) AW c) PW
Q: Find the value of an ordinary annuity if payments are made in the amount of R and interest is compou...
A: The value of annuity can be calculated with the help of future value function
Q: Q7-3. If interest is compounded more than once a year, will the effective interest rate be higher th...
A: Nominal interest rate is the stated interest rate, where as effective interest rate is the rate whic...
Q: Question 18 What is the expected retum of the following portfolio? E(R) 0.11 0.09 0.05 Stock A Beta ...
A: A portfolio is made up of more than one financial asset. Here the portfolio has three stocks. Portfo...
Q: Suppose that a random sample of twenty recently sold houses in a certain city has a mean sales price...
A: The basic assumption that sales are normally distributed are bell shaped symmetrical on both sides a...
Q: Find the mean of Terry's stock, giving the following information? Year Return 2011 22% 2012 -8% 2013...
A: Here, To Find: Mean =?
Q: 1. You are 25, recently graduated, and have a job paying 98u a) You want to take a trip to Rome next...
A: "Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first thre...
Q: Find the present value of $1,000 to be received at the end of 4 years at 12% compounded semi-annuall...
A: Formula Present value = FV/(1+i)n Where FV - Future value i.e. $1,000 i - Semi annual interest rate ...
Q: What is the Macaulay duration of a bond with a coupon of 5.8 percent, eleven years to maturity, and ...
A: The Macaulay duration of a bond is the weighted average duration of the bond where we take the weigh...
Q: Problem 9-16 Problems with Profitability Index [LO1, 7] The Michner Corporation is trying to choose ...
A: a1) Let the initial investment = C Annual cashflow = A r = 11% n = 3 years
Q: A real estate developer bought land for $170000.00 down and monthly payments of $10550.00 for 10 yea...
A: The loans are paid by monthly equal instalments these carry the payment for the interest and payment...
Q: . What is the net present value $ of project A? 2. what is the profitability index for project A? ...
A: Net Present Value: It represents a measure of the profitability of a project or investment in dolla...
Q: You borrow $30,000 for 10 years to pay tuition and fees. The annual interest rate is 12 percent. Wha...
A: Loan Amortization: It refers to the process of paying off the loan in equal periodic payments. Thes...
Q: what is a contract
A: A Contract A contract is an agreement between at least two parties or more that generates enforceab...
Q: the interest rate is 10%. What is the amount of the accumulated money at the end of the fifth year f...
A: Future Value of Annuity: It represents the future worth of the present annuity stream of cashflows....
Q: 6) Consider two thirty year bonds with the same purchase price. Each has a coupon rate of 5% paid se...
A: Here, Time to maturity = 30 years Semi-annual Coupon rate = 5% Par value = 1,000 First bond nominal...
Q: Calculate the Black-Scholes price of a Call option where: S = $50 K = $45 %3D T-t=.25 O = .20 r = .0...
A: Stock Price S $ 50.00 Strike Price K $ 4...
Q: online payment method
A: Payment refers to the money transferred in exchange for goods or services decided or agreed upon b...
Q: Stock Y has a beta of 1.2 and an expected return of 11.5 percent. Stock Z has a beta of .80 and an e...
A: The risk-free rate of return is the theoretical return on a risk-free investment. Over a given perio...
Q: Siri plans to retire when her simple annuity savings account has enough money to receive 10000.00 pe...
A: We need to use excel FV function to calculate future value of payment and NPER function for calculat...
Q: 1. What are the annual net cash inflows that will be provided by the new dipping machine? 2. Compute...
A: Companies invest only in those machines and projects are profitable. To evaluate the profitability o...
Q: places.) (a) Wesbanco offers an account 7.28 % interest compounded daily. APY = Number %3D (b) PNC o...
A: Effective annual rate (EAR) refers to a real interest rate which an investor is expect from his inve...
Q: Karen obtained a $25.000 loan at 4.5% compounded semiannually. a-1. What monthly payment will repay ...
A: The monthly amount will be found using excel’s PMT function. It is the minimum amount that must be p...
Q: Derrick recently graduated. He owes $17,525 in student loans with APR of 4.6% compounded monthly. He...
A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts a...
Q: The parents of a newborn have decided to make deposits into an investment account on each of their s...
A: Formula Present value = P*[1-(1+g)n*(1+r)-n]/(r-g) Where P - First payment i.e. $2500 g - Annual gro...
Q: 4. You owe P120,000.00 from a friend that promise to pay 6% simple interest. How much will you pay a...
A: The easiest and simple method of calculating interest is simple interest. An interest rate is consid...
Q: 4) An n-year loan involves payments of $800 at the end of each month. The interest rate is 12% conve...
A: Here, Monthly Payment is $800 Interest Rate is 12% Compounding Period is Monthly i.e. 12 Interest on...
Q: You are considering a safe investment opportunity that requires a $710 investment today, and will pa...
A: Minimum acceptable rate of return It is the lowest rate of return which a project must be earne...
Q: P=P1,000 r= 5% t= 10 years m=4 What would be the future value of the ordinary annuity of the giv...
A: Given: Particulars Amount Payment(PMT) P1000 Years 10 Rate 5% Compounding 4
Q: If the corporate tax rate was 25 percent, what were the firm's income taxes for each year? Round you...
A: Tax refers to the amount charged by the government on individuals, partnership firms, HUF’s or any c...
Q: ousiness takes out a loan of $500 000 from a bank and agrees to repay th ing a fixed amount of $60 0...
A: Loans are paid by the annual equal payments that carry the payment of interest and payment for the p...
Q: Given the cash flow diagram below, expressed in months, determine: A. The Present value at a nominal...
A: NPV and IRR both are methods of capital budgeting that are used to make decesion of selecting and re...
Q: Chupapi Inc. has a gross profit ratio of 16.67 % for the year 2020. If Chupapi Inc. has gross profit...
A: Gross Profit Margin = Gross Margin for the year/Net Sales for the Year
Q: Jason has credit card with the monthly interest rate of 1.3%. His statement from October 10 to Novem...
A: Monthly interest rate (i) = 1.3% Days in the month = 32 Days interest charged for first purchase = D...
Q: Question 20 An analyst estimates that project C's expected rate of returm is 10%, your required rate...
A: To analyse a project, the expected rate of return and required rate of return are compared. if the e...
Q: Compare three alternatives on the basis of their capitalized costs at i 14% per year and select the ...
A: Capitalized cost is the present worth of the annual cost over the tenure of the project or alternati...
Q: The current zero-coupon yield curve for risk-free bonds is as follows: . What is the price per $100 ...
A: Face value of bond = $100 Years to maturity = 4 years
Q: solve this cash flow
A: Cash flow refers to the balance of the cash inflows and outflows of a business over a period of time...
Q: The following data relate to a listed company. • Current share price = $160 • Exercise price = $19...
A: Given: Given: Particulars Amount Spot price $160.00 Standard deviation 40% Risk free rate 5...
Q: The maintenance cost of a new equipment is projected to start at the end of the 2nd year at an amoun...
A: Cost in year n = Cn C2 = P 8000 C6 = P 10000 Uniform increase in cost = (10000 - 8000) / (6 - 2) = P...
Q: pplegate Industries is planning to expand its production facility in a few years. New plant onstruct...
A: Number of Years = 3.5 Periods per year = 4 (interest rate compounded quarterly) Nominal rate= 8% Int...
Q: You put $6,500 into a Roth IRA and invest everything in a corporate bond fund. The fund has an annu...
A: An investment is an asset or item purchased with the intention of generating income or appreciation....
Q: Deposits of 10 are placed into a fund at the end of each year for 18 years with the first deposit oc...
A: The concept of the time value of money states that the same amount of money is worth more today than...
Q: You want to create an endowment income of $35,000 per year for Oxfordshire Charity, bit the first pa...
A: The amount that should be invested today is the present value of all future endowment payments. Sinc...
Q: do you think that the collaboration between Central Banks and Government creates challenges for supp...
A: If a country's economy were a human body, the central bank would be its heart. And, just as the hear...
Q: Q7-8. Is it possible to convert a present value of an ordinary annuity table to the present value of...
A: Let r = Interest rate Periodic payment = P Duration = n
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: Initial Investment is $100million Net Working Capital is $20 million out of $100million Cost of mach...
Q: If an investor buys shares in a no-load mutual fund for $33 and after eight years the shares appreci...
A: Mutual funds refer to one type of financial vehicle that pools money from many investors and invests...
Q: According to the promissory note below, answer the following questions (Refer to the pic attached) ...
A: Maker is the person who is supposed to pay the amount and Payee is the person to whom amount is to b...
Q: Consider a fixed-payment security that pays P100 at the end of every year for the three years. If th...
A: Per year payment = P = P100 Number of payments = N = 3 Discount rate = I = 10%
Q: Optival’s stock is currently trading at $60 per share with a historical volatility of 20%. The risk-...
A: Given: Particulars Spot price $60.00 Standard deviation 20% Risk free rate 4% Exercise ...
Cost of Debt, Cost of Preferred Stock
This article deals with the estimation of the value of capital and its components. we'll find out how to estimate the value of debt, the value of preferred shares , and therefore the cost of common shares . we will also determine the way to compute the load of every cost of the capital component then they're going to estimate the general cost of capital. The cost of capital refers to the return rate that an organization gives to its investors. If an organization doesn’t provide enough return, economic process will decrease the costs of their stock and bonds to revive the balance. A firm’s long-run and short-run financial decisions are linked to every other by the assistance of the firm’s cost of capital.
Cost of Common Stock
Common stock is a type of security/instrument issued to Equity shareholders of the Company. These are commonly known as equity shares in India. It is also called ‘Common equity
Baguio Rabbitry must replace the piping system in its barn. Based on cost of capital of 12%
which of the two following alternatives should be chosen using the following methods?
a) RORAI
b) AW
c) PW
Step by step
Solved in 2 steps with 2 images
- Q29 Consider the following costs associated with all work packages (WP A and WP B) of a project: WP A B Labor hours Type 1 30 5 Labor hours Type 2 30 20 Labor hours Type 3 10 60 The rate of Labour hours Type 1 is $15. The rate of Labour hours Type 2 is $25. The rate of Labour hours Type 3 is $35. Calculate the total cost of the project. Material Equipment $500 $200 $100 $1,000 Subcontracts $8000 $2000 Other $300 $400Cost Allocation To: uality ontrol 78,400✔ 21,600 100,000) 0 Fabricating 140,600 28,800 20,000 S 189,400 S $ $ $ SA Finishing 9,820 X 21,600 50,000 81,420Problem 2 (Life-Cycle Costing) The following revenue and the cost data are for Round Manufacturing's to radial saws. The RM 200 is for the commercial market and the RM 800 is for industrial customers. Both products are expected to have three-year life cycles. RM200 Year 1 Year 2 Year 3 Revenue Costs P 500,000 1,000,000 300,000 60,000 80,000 20,000 P2,500,000 -0- P2,000,000 Research and development Prototypes Marketing -0- 50,000 320,000 475,000 120,000 808,000 60,000 P 650,000 P 810,000 -0- Distribution 130,000 1,000,000 85,000 Manufacturing Customer service -0- Income P(960,000)
- nuN-ntips%253A%252F%252Flms.mheducation.com%2521 Saved the Internal Rate Net Present Project Investment Required $160,000 $44 ,323 $135,000 $42,000 $100,000 Ş35,035 $175,000 $ 38,136 (years) of Return 18% Project Value A 7 16% 20% 12 7 D 3 228 The net present values above have been computed using a 10% discount rate. The company wants your assistance in determining which project to accept first, second, and so forth. Required: 1. Compute the project profitability index for each project. 2. In order of preference, rank the four projects in terms of net present value, project profitability index and internal rate of return. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the project profitability index for each project. (Round your answers to 2 decimal places.) Project Project Profitability Index tv MacBook Air 80 88 F2 F3 F4 F5 F6 F7 F9 F10 @ #3 $ % & 2 4 7 8. W E T Y D J K * CO 品:PROJECT A PROJECT BInitial Outlay -60,000 -80,000Inflow year 1 17,000 18,000Inflow year 2 17,000 18,000Inflow year 3 17,000 18,000Inflow year 4 17,000 18,000Inflow year 5 17,000 18,000Inflow year 6 17,000 18,000MANAGEMENT OF TECHNOLOGY Project Selection Based on Economic Analysis 0.1 = MARR' Technology "A" Year Cost Income Net NPV IRR 0 -$650,000 $0 -$650,000 $148,621 17% 1 $0 $125,000 $125,000 2 $0 $175,000 $175,000 3 -$275,000 $300,000 $25,000 4 $0 $400,000 $400,000 5 $200,000 $200,000 $400,000 Technology "B" Year Cost Income Net NPV IRR 0 -$750,000 $0 1 $0 $175,000 2 $0 $200,000 3 -$370,000 $225,000 4 $0 $375,000 5 $300,000 $350,000 Technology "C" Year Cost Income Net NPV IRR 0 -$808,300 $0 1 $0 $200,000 2 $0 $225,000 3 -$265,000 $250,000 4 $0 $400,000 5 $202,000 $325,000 Increment B-A Year Cost Income Net NPV IRR 0 -$100,000 $0 -$100,000 -$23,453 5% 1 $0 $50,000 $50,000 2 $0 $25,000 $25,000 3 -$95,000 -$75,000 -$170,000 4 $0 -$25,000 -$25,000 5 $100,000 $150,000 $250,000 Increment C-A Year Cost Income Net NPV IRR 0 -$158,300 $0 1…
- Calibri 11 A A % в I U Alignment Number Conditional Format as Cll Cells Editing Paste Formatting Table Styles Clipboard Font Styles B24 fe A B C D 1 Laurman, Inc. is considering the following project: 2 Required investment in equipment 2$ 2,205,000 3 Project life 7 4 Salvage value 225,000 5 6 The project would provide net operating income each year as follows: 7 Sales 2,750,000 8 Variable expenses 9 Contribution margin 10 Fixed expenses: 1,600,000 2$ 1,150,000 11 Salaries, rent and other fixed out-of pocket costs 520,000 12 Depreciation 13 Total fixed expenses 350,000 870,000 14 Net operating income 280.000 15 16 Company discount rate 18% 17 18 1. Compute the annual net cash inflow from the project. 19 20 2. Complete the table to compute the net present value of the investment. 21 22 Year(s) 23 Now 1-7 Sheet1 ... > %24Table 1: The Planned Value of Work Done Schedule March 120,000 120,000 70,000 100,000 Jan Feb Project A Project B Project C Project D 60,000 100,000 80,000 120,000 100,000 80,000 80,000 120,000 Аpril 120,000 140,000 90,000 120,000 May 200,000 140,000 100,000 150,000 Based on the data obtained from each project, you have found out the value of work done on the 31st of March, which is shown in Table 2 below. Table 2: The Actual Value of Work Done and Direct Cost Incurred as of the 31st of March Project Actual Value of Work Done 300,000 250,000 250,000 280,000 Direct Cost Incurred 220,000 180,000 200,000 240,000 A Each project is supposed to contribute 10% profit and 8% orerhead to the compoany. You are requested to present to the company the turnorer as of the 31st of march. Prepare your answer by answering the following questions. a) Calculate the planned ralue of work done, the total planned orerhead and the total profit contribution from all the projects as of the 31st of march. b)…Dixon Construction Materials has collected this information: Based on this Information, what is the EVA for the project? A. $100,000 B. $10,000 C. $450,000 D. ($110,000)
- Cash 72000 Ending WIP 54000 Beginning WIP 85000 DM used 40000 DL used 61000 Factory overhead 50000 What will be the total manufacturing cost?Required to answer. Single choice.Table 1: The Planned Value of Work Done Schedule Jan Feb March Project A Project B Project C Project D 60,000 100,000 80,000 120,000 100,000 80,000 80,000 120,000 120,000 120,000 70,000 100,000 April 120,000 140,000 90,000 120,000 Мay 200,000 140,000 100,000 150,000 Based on the data obtained from each project, you have found out the value of work done on the 31st of March, which is shown in Table 2 below. Table 2: The Actual Value of Work Done and Direct Cost Incurred as of the 31st of March Project Actual Value of Work Done 300,000 250,000 250,000 280,000 Direct Cost Incurred A 220,000 180,000 200,000 240,000 Each project is supposed to contribute 10% profit and 8% orerhead to the compoany. You are requested to present to the company the turnorer as of the 31st of march. Prepare your answenr by answering the following que'stions. a) Calculate the planned ralue of work done, the total planned orerhead and the total profit contribution from all the. projects as of the 31st of March. b)…10 11 For questions 10-12, refer to the following problem: A manufacturing company is planning to make a newly developed product. Annual fixed cost for manufacturing of the product is $60,000. The selling price is S unit, and the variable cost is $6/unit. 10. To break even; the annual production level for the company needs to be at, a. 10,000 units b. 20,000 units c. 15,000 units d. 6,000 units 11. To make profit of $16,000; the annual production level for the company needs to be at, a. 19,000 units b. 19,500 units c. 20,000 units d. 31,000 units 12. If the company sets annual production at 12,000 units, what must the selling price be to beak even. Assume annual fixed cost is still $60,000 and unit varable cost is $- unit. a. $15/unit b. $10/unit c. $12/unit d. Sunit For questions 13 - 16, refer to the following problem: A company is considering two options for production of a part needed in manufacturing process. Cost information for these two options is as follows:…