Felix will receive 20,000 British pounds one month from now as payment for apple juice produced and   export by his company. Felix is concerned about his exposure because he   believes that there are two possible scenarios: (1) the pound will depreciate by 3%   over the next month or (2) the pound will appreciate by 2% over the next month.   There is a 70% chance that Scenario 1 will occur. There is a 30% chance   that Scenario 2 will occur.   Felix notices the spot rate of the pound is GHS 8.1 and the one month   forward rate is GHS 8.6. Felix can purchase a put option over the counter   from a securities firm that has an strike price of GHS 8.6, a premium of   GHS0.025, and an expiration date of one month from now. Determine the amount of   cedis received by the apple Company under each of the two exchange rate   scenarios if:   a) The receivables to be received in one month are not hedged.   b) A put option is used to hedge the receivables in one month.   c) A forward hedge is used to hedge the receivables in one month.

You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 15 years. You expect that the drug's profits will be $3 million in its first year and that this amount will grow at a rate of 2% per year for the next 15 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the present value of the new drug if the interest rate is 7% per year? The present value of the new drug is $ million. (Round to three decimal places.)

You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 19 years. You expect that the drug's profits will be $4 million in its first year and that this amount will grow at a rate of 3 * 0/o per year for the next 19 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the present value of the new drug if the interest rate is 12% per year?   The present value of the new drug is $ (enter your response here) million.

Today, Jeff has $350,000 in his savings and Patrick has $875,000. Patrick will not make any more deposits over the next 10 years, but he will earn 7% per year on his current savings. Jeff plans to deposit $8,000 per year into his savings for the next 10 years. He also wants to seek out a higher return for his savings so that he will have the same amount of money as Patrick will 10 years from now. What rate of return will Jeff have to earn over the next 10 years in order to catch up with Patrick? 16.05% 22.09% 19.22% O 17.44%

Silvia is 20 years old and has just started working. She will work until age 67 and live to age 87. Her current annual salary is £50,000. This salary will stay constant until her retirement (age 67). During retirement she will receive a constant pension income of £30,000. She has £350,000 in financial wealth. She can borrow and lend at an annual risk free rate of 2%. a. If she wishes to hold consumption constant over her lifetime, how much can she afford every year?

Samuel Johnson invested in gold U.S. coins ten years ago, paying $216.53 for one-ounce gold "double eagle" coins. He could sell these coins for $734 today. What was his annual rate of return for this investment?

Lola is currently opening a series of restaurants around Coventry. She needs to raise £2million pounds from new investors. She decides to raise it in the following way. She issues a contract for the new investors promising a fixed amount of £2.5 million pounds next year if they invest now. If Lola does not pay the promised amount, investors would take over the restaurants. If she pays then Lola will keep full ownership. This contract is an example of:  (a) A bank loan. (b) A corporate bond. (c) Private equity. (d) An Initial public offering. (e) A rights issue.

Seth Fitch owns a small retail ice cream parlor. He is considering expanding the business and has identified two attractive alternatives. One involves purchasing a machine that would enable Mr. Fitch to offer frozen yogurt to customers. The machine would cost $7,530 and has an expected useful life of three years with no salvage value. Additional annual cash revenues and cash operating expenses associated with selling yogurt are expected to be $6,070 and $850, respectively.Alternatively, Mr. Fitch could purchase for $9,960 the equipment necessary to serve cappuccino. That equipment has an expected useful life of four years and no salvage value. Additional annual cash revenues and cash operating expenses associated with selling cappuccino are expected to be $8,440 and $2,350, respectively.Income before taxes earned by the ice cream parlor is taxed at an effective rate of 20 percent.Required Determine the payback period and unadjusted rate of return (use average investment) for each…

After a bad accident Anton receives a large sum in compensation. He is thinking about using it to invest in a stretch limousine to hire out for special occasions. The cost of the limousine is £100,000. Anton is due to retire in six years, at which stage he thinks he will be able to sell the limousine for £40,000. The net cash inflows for the venture, after allowing for the driver's wages and other direct expenses are: End of year Net cash flow (£) 1 10,000 2 15,000 3 20,000 4 20,000 5 20,000 6 15,000 (a) Find the payback period for this venture. (b) Calculate the net present value using a discount rate of 8%.

En Sahak wants to buy a new boat in 7 years. He expects the new boat will cost RM28,000. En Sahak has RM18,000 in an investment account today. What rate of return must En Sahak earn on his investments to be able to buy the boat on time?