Explain sensitivity risk and it's advantages.

Q: Consider an asset that costs $601,119 and is depreciated straight-line to zero over its 10-year tax…

A: After tax cash flow from asset is the cash received on the sale of an asset after adjustment for the…

Q: Suppose that a firm always announces a yearly dividend at the end of the first quarter of the year,…

A: Here, Particulars Values Annual dividend  $ 2.40 No. of quarters 4.00 Quarterly dividend  $…

Q: 1. A company issued 20-year bonds with par value $1,000 two years ago at a coupon rate of 5 percent.…

A: The price of bond is the present value of annual cash flow from the bonds and present value of face…

Q: A car loan of $23,800 is to be repaid with bi-weekly payments of $164. How many payments are…

A: Loans are paid by the equal periodic installments and these installments carry the payment for…

Q: Bliss Bar is a company that sells deluxe chocolate and candy bars based in Illinois. The company is…

A: The cash flows that an entity generates from business operations indicate the cash flows from…

Q: AR company has the following financial statement information: Item Inventory Accounts receivable…

A: Here, Particulars Values Opening inventory  $       7,800.00 Ending inventory  $…

Q: compounded 12 times a year. If the card holder wants to pay off will the card holder need to pay?…

A: Credit card balances are paid by the monthly payments and these monthly payments carry the payment…

Q: Wills loaned Audrey Chin $16,000 to open Snip Its Hair Salon. After 6 years, Audrey will repay Lee…

A: Future value of investment includes the amount being deposited and amount of interest accumulated…

Q: An Australian company, GHI Ltd, is examining a potential investment in England. The project is…

A: NPV The capital budgeting technique that helps investors make decisions related to investing in…

Q: Use Exhibit 18-1 to determine Sales Tax in (K and Calculate the Total purchase price (in) for to…

A: Sales tax is the amount paid on the selling price and is included in the receipt. Selling price =…

Q: What will be the Book Value of the factory equipment at the end of year 2?

A: Bliss bar is launching a new product line and this is essentially an exercise in capital budgeting.…

Q: Consider the following statement: "The estimation of the Free Cash Flow to the Firm (FCF) considers…

A: The investment decisions are the planned activities related to allocating the financial resources in…

Q: Given this information: a) Compute the NPV of the investment in the firm's cost of capital is 10%…

A: Net present value (NPV) is the value of all the cash flow of the investment (positive and negative)…

Q: Assume that Lina bought a permanent life insurance of $500,000 at the age of 25. At 32 she is…

A: Life insurance is a contract between an insured person and an insurance agency that states that, in…

Q: You purchased a commercial office building for $2,200,000 one year ago. The appraisal noted the…

A: As per the given information: Office building purchased - $2,200,000Value of the land -…

Q: Dividends for ABC Corporation are expected to be $6 per share one year from today, 59 per share two…

A: Here, Particulars Year Values Growth rate - 4.00% Required rate of return - 14.00% Dividend…

Q: Security A, standard deviation = 25% beta = 1.5 Security B, standard deviation = 40% beta = 1/3…

A: Security A Standard Deviation 25% Beta =1.5 Security B Standard Deviation =40% Beta = 1/3 =0.33…

Q: tock Price after Recapitalization e Manufacturing's value of operations is equal to $900 million…

A: With debt, the value of the firm is given as shown below. Value of firm=Market value of debt+Market…

Q: Caleb Fajardo and Yen–Dollar Parity. Caleb Fajardo is attempting to determine whether U.S./Japanese…

A: Interest rate parity relation With spot rate (S=units of foreign currency per unit of home…

Q: Project J has a cost of $22,000 and is expected to produce benefits (cash flows) of $7,000 per year…

A:

Q: 1. An electronic device is available that will reduce this year's labor cost by $19443. The…

A: GIven Labor cost is $19443 Life of equipment is 8 years

Q: 2) Determine 3) Determine

A: Company has to do feasibility analysis of the project before doing investment in the projects…

Q: The following transactions and adjusting entries were completed by Legacy Furniture Co. during a…

A: Double-declining (DDB) method is the formula to reduce the value of the fixed asset at the double of…

Q: If your portfolio includes 35 percent of X, 40 percent of Y and 25 percent of Z, answer the…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: nd was issued on July 15, 2020 with a par value of Rp. 1,000,000,000 and will mature on July 15,…

A: Price of bond is the present value of coupon payment and also the present value of par value of bond…

Q: estion 2 MusicTogether.com will pay out its first dividend, $2.00, one year from today. Analysts…

A: Value of stock can be found out the present value of dividends and also the present value of the…

Q: Calculate the interest on AED 5,520 at 2.8% compounded annually for 4 years.

A: GIven Investment is AED 5,520 Rate is 2.8%

Q: Riverview Company is evaluating the proposed acquisition of a new production machine. The machine's…

A: The IRR is the investment discount rate that corresponds to the difference between the original…

Q: An 8 year par value bond with semiannual coupons at 6% convertible semiannual has a price of 1050.…

A: Callable bonds are one in which the issuer of the bond has the right to call back the bond. In this…

Q: Daily Enterprises is purchasing a $9.9 million machine. It will cost $46,000 to transport and…

A: Through the funding from creditors and investors, the company is regulating. Creditors assist the…

Q: The manufacturer of a product that has a variable cost of $2.40 per unit and total fixed cost of…

A: The concept of break-even analysis will be used here. Break-even point is that point at which total…

Q: Mary Helu and Jason Haynes recently graduated from the same university. After graduation they…

A: Given that after two months their average revenue = $25,000 out of-pocket cost = $22,000 expected…

Q: Companies with strong earnings but limited growth opportunities     A) do not generally pay any…

A: Companies with strong earnings but limited growth are called blue chip companies. Blue chip…

Q: You buy a new car for $22,222.  You must also pay tax and license fees of $1,570.  You borrow…

A: A sum borrowed to meet a specific expense or any goal is regarded as a loan. The lender generally…

Q: n briefly any five factors that the company should consider when deciding of the mix debt and equity…

A: There are basically two types of the sources of finances for the companies one is debt and other is…

Q: ect S ject L 0 2 3 -$1,000 $891.91 $240 $15 $5 -$1,000 $5 $260 $400 $778.56 company's WACC is 8.5%.…

A: IRR is the break even rate at which present value of cash flow is equal to the initial investment of…

Q: Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce…

A: The term "initial investment" describes the sum of money that must be put forth in order to launch…

Q: he Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company’s…

A: Direct labor refers to the total amount of regular working hours and overtime working hours related…

Q: How do rising interest rates affect a firms decisions to invest in long term assets?

A: The interest rate refers to the current landing and borrowing rate. The interest rate affects the…

Q: You are evaluating a project that costs $64,000 today. The project has an inflow of $138,000 in one…

A: The process via which an investor analyzes and evaluates any project or investment and decides…

Q: What is the accumulated sum of $200 a year for the next 15 years compounded annually at 7.5%?

A: Annuity referes to a series of regular payment for a definite period. If payments are made at the…

Q: Kindly answer the problem with complete solution so that I can understand. Write in handwritten…

A: The initial payment made to acquire anything on credit is its down payment. The annual payments that…

Q: L. Sanders Manufacturing paid a dividend last year of $5 per share. The dividend is expected to grow…

A: The dividend discount model (DDM), a mathematical technique for predicting the price of a company's…

Q: An Australian company has total assets of $150 million and debt of $30 million. The firm's…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Chambers Company is contemplating a 2-year capital project that will generate net annual cash flows…

A: Here, Net annual cash flows = $48,000 Internal rate of return factor = 1.690 Profitability index =…

Q: Gabby’s Garage issued a bond with a 10-year maturity, a $1,000 par value, a 10 percent coupon rate,…

A: A bond refers to an instrument related to fixed-income that are issued for raisine money from…

Q: 6 - TPP Inc., which owns and operates a chain of tattoo and piercing parlors, was founded 10 years…

A: Quantum and timing of dividends emanating from the stock are known. We have an intrinsic value. We…

Q: A company's stock has a beta of 1.20, the risk-free rate is 1.6%, and the market risk premium is…

A: We will have to apply the CAPM model here. CAPM is the capital asset pricing model.

Q: You are considering investment in a project with the following outcomes: Investment Return -10% 5%…

A: In finance standard deviation is a measure of volatility. It is the measure of how much an asset’s…

Q: 30. Based on the Regression result for KLIC, if Variance of the Residuals is equal 0.0126 and…

A: Variance of the Residual Risk=0.0126 And variance of SPY=0.0037

Risk Analysis

Risk management is the entire walkthrough process of helping the organization manage risks or avoid them altogether. It is an in-depth study to determine the risks and uncertainties faced by the business and how these impact the objectives and outcomes of the business. Risk analysis is a procedure of risk assessment followed by the management of an organization to avoid risks that may harm the functioning and efficiency of the company.