If we compare two mutually exclusive projects using __________ problems can arise if the projects' cash flows exhibit differences in ___________.

Q: How much money be invested today in order to withdraw P1500 per year at the end of each year for 8…

A: Annual withdrawal (P)  = P1500 Interest rate (r) = 8% Number of annual withdrawal (n) = 8

Q: Based on these information, how much is the firm value after accounting for excess earnings?

A: Time value of money (TVM) refers to the method used to measure the amount of money at different…

Q: he CAPM implies that heterogeneous agents hold the same risky portfolio a) even if they differ in…

A: CAPM: The Capital Asset Pricing Model (CAPM) is a mathematical model that describes the link between…

Q: The activity date, company, and amount for a credit card bill are shown below. The due date of the…

A: Here, Interest rate = 1.7% per month To Find: Finance charge =?

Q: Consider a zero-coupon bond with a $100 face value and 10 years left until maturity. If the YTM of…

A: Face value of the bond = $100 Maturity period = 10 years Yield to maturity (YTM) = 0.111 (i.e.…

Q: A student needs P4000 per year for 4 years to attend college. Her father invested P5000 in a 7%…

A: Amount invested in year 0 (X) = P 5000 Amount withdrawn in year 17, 18, 19 and 20 (A) = P 4000 r =…

Q: Solar and conventional alternatives are available for providing energy at a remote U.S. Am training…

A: Benefit cost ratio is an important tool to assess the financial feasibility of projects. Using this…

Q: per year for four years to go to college. Your father invested P16300 per year in a 10.163% account…

A: You must do proper planning for the future that must be done on time and within interest rate so…

Q: 30. AllCity, Inc., is financed 40% with​ debt, 10% with preferred​ stock, and 50% with common stock.…

A: Concept. WACC is weighted average cost of capital. It is commonly referred to as firm's cost of…

Q: Luther Corporation Consolidated Balance Sheet December 31, 2006 and 2005 (in S millions) Liabilities…

A: Total debt  =  Notes payable + Current maturities of long term debt + Long term debt   Book value of…

Q: Describe the three steps in an expansion capital budgeting project.

A: Capital budgeting entails financial feasibility analysis of different projects to determine their…

Q: Management is considering buying a pump that costs $20,000 and could save them $7,500 per year over…

A: NPV is the difference between the Present Value of Cash Inflows and Initial Investment. A project…

Q: A municipal bond with a face value of $10,000 and bond interest rate of 8% per year payable…

A: Face Value  $       10,000.00 Coupon rate 8% Time Period 30 Yield 12% Time Passed 10

Q: price of a long-term (longer-maturity) bond more or less sensitive to changes in interest rates than…

A: Long term bonds are more sensitive to change in interest rates than short term bond. If Interest…

Q: How much money be invested today in order to withdraw P1500 per year at the end of each year for 8…

A: Annual withdrawal (P) = P1500 Interest rate (r) = 8% Number of withdrawals (n) = 8

Q: Green Brands, Inc. (GBI) presents its statement of cash flows using the indirect method. The…

A: Answer -  Part 1 - Cash flow using the Direct Method -  GREEN BRAND INC Statement of Cash Flows…

Q: If WideWorld is choosing one of the above mutually exclusive projects (Project A on Project B),…

A: The decison regarding the project can be taken based on NPV or Net present value. This is one of the…

Q: Consider a 5-year bond paying 6% coupon annually. The yield is 9%. Use the duration approximation to…

A: The following information has been provided in the question: Life of Bond = 5 Years Coupon rate= 6%…

Q: A cutting edge metallic 3D printer is purchased by Helix Corp for $160000. It is expected to last 9…

A: The following information has been provided in the question: Cost of metallic  printer =$160000 Life…

Q: 1- Find the internal rate using the method of Internal Rate of Return (IRR) if i = 15%, for the…

A: Internal Rate of Return (IRR) refers to the rate which equates the present value of future cash…

Q: Treasury bills are currently paying 6 percent and the inflation rate is 3.10 percent. What is the…

A: Nominal interest rate = 6% Inflation rate = 3.10%

Q: A firm issues five-year bonds with a coupon rate of 6.1%, paid semiannually. The credit spread for…

A: Par value (FV) = $100 Coupon rate = 6.1% Semi annual coupon amount (C) = 100*0.061/2 = $3.05 Years…

Q: 9. A corporation has decided to use borrowed capital to finance a portion of an equipment purchase.…

A: Borrowed amount is $40,000 Time Period is 2 year Interest rate is 7% Compounded annually To Find:…

Q: nover ratio

A: Higher turnover rates imply higher fund expenditures, which might lower the fund's actual quality.…

Q: a. Compute the net present value of each project. b. If the company accepts all positive net present…

A: Net present value = - Initial outlay + Present value of future cash flows.  Net present value is…

Q: Jimmy and Mickey are interested to purchase their first boat. They have decided to borrow the boat's…

A: Purchase price Boat = $100,000 Income tax = 28% Cost of borrowing from boat dealer = 8% Cost of…

Q: Given the information below for HooYah! Corporation, compute the expected share price at the end of…

A: Expected share price using price ratio analysis.

Q: A $67,000 loan is taken out on a boat with the terms 9% APR for 36 months. How much are the monthly…

A: Payment per period can be calculated using PMT function in excel.   PMT(rate, nper, pv, [fv],…

Q: Discuss two ways in which foreign aid could actually be harmful to a country's development.

A: International aid, international transfer of capital, goods or services by a national or…

Q: 1. Let's assume that a loan of $100,000 with an annual interest rate of 6% over 30 years pays…

A: Accumulation rate is the increase in size of asset, position or overall buying activity of…

Q: After a retiring from a successful business career, you would like to make a donation to your…

A: Given, The Donation made is $2,000,000 Returns is 5.5%

Q: Your factory has been offered a contract to produce a part for a new printer. The contract would…

A: Data given: Cash flow  per year = $5 million Set up cost = $8 million Discount rate =8% Life of…

Q: The Loughran Corporation has issued zero-coupon corporate bonds with a five-year maturity. Investors…

A: Expected maturity value  = [100*(1-default rate)] + [100 * default rate*Percentage receivable on…

Q: What is the simple interest on ₱ 30,000 for six months at a simple interest rate of 12% (b) What is…

A: Answer -  Part a - Calculation of Simple Interest - Simple Interest = PRT /100 Given, P = 30,000 R =…

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 investor buys a property for $657,000 with a 25-year mortgage and monthly payments at 7.5% APR.…

A: Solution:- Cash remaining in hand after sales will be the cash in hand after paying the remaining…

Q: 3) What is the capitalized worth, when i 12% per year, of $2.000 per year, starting in year one and…

A: Annual cost (A) = $2000 Repeating cost (R) = $11000 in year 5, every 4 years i = 12%

Q: Briefly explain three risk exposures that an analyst should report as part of an enterprise risk…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: A small coffee shop currently offers a cup of cafe latte for P106. The variable costs are P58 per…

A: The Break-even selling price is the price where the organization neither earns any profit nor bears…

Q: NICO Corporation had net current assets of R2,000,000 at the end of 2010 and R1,800,000 at the end…

A: Net current assets is referred as an aggregate amount for all the current assets by subtracting an…

Q: Average age of inventory of GLOBE STATEMENT OF FINANCIAL POSITION AND INCOME STATEMENT OF 3…

A: Average age of inventory is the time in days to sell off inventory. It can be calculated Average age…

Q: The ABD Hotel's guest-days of occupancy and custodial supplies expense over the last seven months…

A: From a given limited amount of data, fixed and variable cost can be separated using high low method.…

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: FedEx Corporation (FDX) has a current share price of $157.83 and is expected to have earnings per…

A: Price of FDX stock = $157.83 EPS of FDX stock = $12.58   PE ratio of FDX stock = Price of FDX stock…

Q: loan, what amount of money will be required to pay the down payment, the origination fee and the…

A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount…

Q: Project A has the following information: Year 0 1 2 3 4 5 Initial investment outlay 125,000…

A: NPV is calculated by deducting present value of cash outflows from present value of cash inflows.

Q: 2- A man wants to reach S 10000 money seven years from now in his bank account. He plans to make…

A: The concept of the time value of money states that the same amount of money is worth more today than…

Q: A loan of 6 semi-annual payments of 4,500 Php are to be made to pay for a loan at 5 1/2 % compounded…

A: Given That: semi-annual payments=4,500 Php n = 6 semi annual payments r =5.5%/2 = 2.75% semiannual.…

Q: Subah's current stock price is $36 and its D0= $2.4. The company’s required rate of return is 12%…

A: Stock price = D0*(1+growth rate)/(required return - growth rate) where D0 = Current dividend 36 =…

Q: the dividend discount model what is the value of the Jasmine limited share if the firm's cost of…

A: The present value of a stock can be found using the two stage dividend discount model. Increase the…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.