Explain whether it is better for an investor to buy a discount bond and pay a price below its face value or a premium bond and pay a price above the face value. Include in your discussion an explanation of when a bond is at discount or premium and why?

Q: . Inflation is expected to average 2.4% per year for the next 44 yea /hat percentage of the…

A: There is decrease in purchasing power due to increase in inflation and over the years this effect is…

Q: What is the cash conversion cycle of JFC? Note: don’t use excel and show your solution.

A: Here, Accounts Receivables is 7,621 Inventories is 5,972 Accounts Payable is 2,455 Cost of Goods…

Q: ou have a 30-year mortgage loan for $250,000 with an interest rate of 6% which requires you to make…

A: This pertains to time value of money.  The concept of time value of money tells us that worth of…

Q: Economics Sherry has a goal of retiring with $371,060 by making weekly deposits into an investment…

A: First, we need to calculate the weekly deposit made.  Weekly Deposits made: N = 52* 27 years = 1404…

Q: You have borrowed $40,000 to buy a new car and have an 8%, 48 month loan. How much interest will you…

A: A loan amortization schedule can be defined as a table showing the periodic repayment of principal,…

Q: From the following facts, for Sum-of-Years-Digits, what is:   Given: COST  -   $ 15,000 RESIDUAL…

A: Solution: Depreciation means the cost of wear and tear of the property, plant and equipment of firm.…

Q: Before the 2008 Financial Crisis, US banks and mortgage lenders offer controversial mortgage…

A: NINJA loans, as mentioned in the question, refers to those loans that were offered to people who had…

Q: You are offered a job that pays $37,000 during the first year with an annual increase of 9% per year…

A: Solution:- When an amount increases by same rate of growth, the amount at nth year can be computed…

Q: A computer platform requires $160,000 initial investment and additional $80,000 after 10 years. The…

A: A project or asset is to be capitalized at the present value. To calculate the capitalized value of…

Q: What do you think about the interest rate i for

A: A recession refers to the time period which is affected by a temporary economic decline during which…

Q: The following is an amortization schedule for a loan of $5000 to be repaid over two years at 7%…

A: Data given: Loan amount = $5000 N=2 years Rate = 7% compounded semiannually   Working Note #1 Given…

Q: If Magui will invest her money today worth 500,000 in JMC Mining company, how much is the expected…

A: Given, Working, For the Calculation of the the investment after 10 years, We have to calculate the…

Q: The following information is available on two mutually exclusive projects.  Project…

A: Project A; Cash flow; Year 0 = - $700 Year 1 = $200 Year 2 = $300 Year 3 = $400 Year 4 = $500…

Q: A year​ ago, the Very Large Growth Fund was being quoted at an NAV of ​$21.18and an offer price of…

A: Investors invest their funds to get some return. Return means earn additional amount on invested…

Q: 1. A firm has the following capital structure: thousands € Liabilities and equity thousands € Assets…

A: WACC = kd*D/A+ke*1-D/Awhere, kd = Cost of debt or debt interest rateke = Cost of equityD/A =…

Q: An investment of P270,000 can be made in a project that will produce a uniform annual revenue of…

A: NPV It is a capital budgeting tool to decide on whether the capital project should be considered or…

Q: Determine whether this investment is an attractive option for the company.

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

Q: How much of the monthly payment is applied to principle in the second month?

A: Amortization Table: It is a table containing the periodic payments, interest payments, principal…

Q: 7a. A large profitable corporation is considering a capital investment of $50,000. The equipment has…

A: Cash flow of a project means that what amount will flow in and out of the business by undertaking a…

Q: Weston Industries has a debt–equity ratio of 1.5. Its WACC is 11 percent, and its cost of debt is 7…

A: Weighted average cost of capital (WACC) When a firm has both equity and debt as its sources of…

Q: Question 15 Which of the following answers was not one of the lending rules proposed by Walter…

A: Walter Bagehot was a British journalist, businessman. He wrote extensively about economics and…

Q: Assume a 10-year Treasury bond has a coupon rate of 3.2% and par value of $1000, and yield to…

A: Yes, here the bond is selling at a premium.

Q: Would you accept a project where you had an initial investment of $10,000,000 but the NPV was only…

A: Solution:- Net Present Value (NPV) means the net value in today’s term after deducting present value…

Q: The stock price in KMW, Inc. is $50, $54, $56, and $48 on four consecutive days of trading. What is…

A: Price on day 1 is $50 Price on day 2 is $54 Price on day 3 is $56 Price on day 4 is $48 To Find:…

Q: Identify three financial signs that are considered red flags. Briefly describe in one sentence for…

A: A red flag is a warning or a threat that tells the company that there is a potential threat to the…

Q: 6b. An initial $2000 investment is made that returns profits of $1000 and 1500 in the first and…

A: Here, Initial Investment is $2,000 Profit in Year 1 is $1,000 Profit in Year 2 is $1,500 Inflation…

Q: Compute the book value of an asset with FC of ₱4 500 000 after 7th year if it has useful life of 13…

A: Here, Cost of Asset is P4,500,000 Useful Life is 13 Years Depreciation Rate is 7% Depreciation…

Q: Okay credit is between

A: A credit score is a three-digit figure that varies between 300 and 900. The credit reporting…

Q: MACHINE A MACHINE B INITIAL COST R100 000 R110 000 EXPECTED ECONOMIC LIFE 5 YEARS 5 YEARS EXPECTED…

A: MACHINE A INITIAL COST     1,00,000.00 EXPECTED DISPOSAL/RESIDUAL VALUE       10,000.00 Year…

Q: If you deposit $500 in a bank account today that earns 3% interest and you deposit $20 per month…

A: The future value of a present sum of money after n periods is given by the formula Future…

Q: This question conoerns BCA for building a permanent dam. The cost of constructing the permanent dam…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: contractual savings institution, hedge fund, I.P.O. , investment banking, mutual fund, pension fund,…

A: Contractual saving institutions are financial intermediaries like brokers. They accept funds on a…

Q: 24. Financial institutions that cut back on their lending are engaged in A) liability management B)…

A: Given, (Answer 24) Meaning of Deleveraging, Whenever a person or an organization focusses to lower…

Q: Boone's last dividend was $1.80 per share, and the dividend is expected to grow at 7 percent…

A: Risk-free rate = 8% = 0.08 Beta = 0.90 Market premium = 7% = 0.07 Required Rate of Return (RRR) =…

Q: Bea Fehr requires a personal loan to purchase appliances that cost S5000. She meets with the loan…

A: Cost of Equipment is  $5,000 Time period of loan is 3 years Interest rate of Institution- A is 934%…

Q: What would be your realized yield to maturity if you sold the bond after 10 years?

A: Realized yield to maturity (YTM) refers to the yield or total return earned or realized by the…

Q: How much will you pay for the bond?

A: The amount that will be paid for the bond is the bond's present value. The bond present value can be…

Q: You buy a 6 year bond with an annual 5% coupon at par value, $1000. If the yield to maturity at the…

A: Solution: Bond value is the present value of the cash inflows receivable from the bond for the…

Q: Shinn Co. sells custom markers for $3.00 apiece. The variable cost per marker is $0.83. Shinn has…

A: Solution: Degree of operating leverage (DOL) measures the ratio of a company's contribution margin…

Q: irms facing hostile takeovers often take actions to forestall the acquisition. For instance, in a…

A: Hostile takeovers refer to those acquisitions and takeovers in which the management of the company…

Q: Petron Globe Assets Cash Receivables Inventories 7,619 90, 602 16, 757 7, 621 5, 972 2. 810 17,927…

A: Average payment period is the time in days to pay accounts payable. It can be calculate Average…

Q: Assume an investment has cash flows of −$25,200, $7,000, $8,000, $8,500, and $9,000 for Years 0 to…

A: NPV means PV of net benefits arises from the project during the life of the project. It is computed…

Q: Nominal annual interest rates are 7.3%. If a businessperson has an opportunity to invest $40,000…

A: Option 1: If 40,000 invested at 7.3% for 5 years: Future Value = Present Value * ( 1 + Interest…

Q: The expected value, standard deviation of returns, and coefficient of variation for asset A are…

A: To Find: Expected return Standard deviation COV

Q: Suppose that a man lends $1000 for four years at 12% per year simple interest. At the end of the…

A: Future value with simple interest With principle amount (PV), period (n) and simple interest rate…

Q: urn on a two asset portfolio and what are its variance and standard deviation. What is R squared?…

A: By multiplying the weight of each asset by its projected return, the expected return is computed.…

Q: You have just purchased an Australian Treasury Bill, which is a zero-coupon bond security with a…

A: Whatever the type of bond, when a) Bond YTM falls, Price of the bond rises b) Bond YTM rises, Price…

Q: A loan of L is being amortized with payments at the end of each year for 10 years. If v = 22/30,…

A: Loan Repayment:  A lump-sum payment that is made in conjunction with a loan, mortgage, or commercial…

Q: The payback rule is generally most useful when:

A: The payback period is the time taken to recover the money spent on the project. According to the…

Q: Interest coverage ratio of JFC *

A: In the given question, we have to calculate the Interest Coverage ratio of the JFC.