Q: Show that the Ricardian Equivalence does not necessarily hold if the assumption of perfect credit…
A: Ricardo's equivalence is an economic theory that states that funding government spending from…
Q: Alfredo wants to know how much he must put in a bank account today to have within 14 years an amount…
A: As per the information provided: Future value of the invested amount = $20,000 Time = 14 years…
Q: norigage has 21 years left, and has an APR of 8.707% Withn montniy payments of $1,449. at is the…
A: The mortgage loans are to be paid by the monthly payments and these monthly payments carry the…
Q: A man loan an amount of P 100,000_at a commercial bank at 10% compounded_annually. How much is his…
A: loans are to be paid by equal monthly payments and these payments carry the payment of interest and…
Q: The company just paid a $1.48 annual dividend and announced the plans to pay $1.54 next year. The…
A: Constant and non-constant growth dividend model : The main distinction between a constant and…
Q: Find the ending balance if the original balance was $425.32 and the following transactions occurred…
A: Each bank gives monthly statements to account holders giving them details of deposit made and…
Q: 2. Spring LLC is planning for investment in Debt market. The company is targeting the following…
A: Bond can be defined as a government security which acts like debt security which includes repayment…
Q: In a Modigliani and Miller world with no taxes, a 100% equity financed company has generated £1m…
A: Modigliani Miller theory states that in a perfect market the value of a company is the present value…
Q: Maxwell Feed & Seed is considering a project that has the following cash flow data. What is the…
A: IRR is the rate at which Present value of cash Inflows is equal to Present Value of cash Outflows.…
Q: Arjay purchases a bond, newly issued by Amalgamated Corporation, for $1,000. The bond pays $60 to…
A: A) Principal amount = $1000 Term = 3 years Coupon rate = 60/1000 = 6% Coupon payment = 60
Q: Archer Arrow Company examined its cash management policy and found that it takes an average of 5…
A: Answer - Part 1 - Calculation of Disbursement float - = Amount of Checks written per day *…
Q: How long does it take for $8,000 to become $12,500 when the interest rate is 8% per year. (ABET,…
A: Here we will use the concept of time value of money. As per the concept of time value of money the…
Q: I, III, and IV
A: The gross estate refers to the term which is to define the dollar value of an individual's assets at…
Q: Question 1 Living Colour Co. has a project available with the following cash flows: Year Cash Flow…
A: Year Cash flow 0 -$34,430 1 $8,090 2 $9,730 3 $13,840 4 $15,770 5 $10,580 Required…
Q: Ms. Jones want to make 12% nominal interest compunded quarterly on a bond investment. She has an…
A: Concept. Bond price is present discounted value of future cash stream generated by bond. It refers…
Q: High Roller Properties is considering building a new casino at an after-tax cost of $10.0 million at…
A: Here, To Find: Value of the abandonment option =?
Q: 1. 3. Envestment required Present value of cash inflows at a $(560,000) $(510,000) $(410,000) $(350…
A: Profitability index is the ratio of present value of cash flow to the initial investment and it must…
Q: What is the prediction of the change following the next change? (Give your answer in decimals)
A: As already calculated the next change prediction was 0.0742 On the basis of this figure we wll…
Q: Bostian, Inc. has total assets of $520,000. Its total debt outstanding is $185,000. The Board of…
A: Debt-to- asset ratio is the percentage of the debt with respect of total asset Debt-to-assets…
Q: Suppose that a two-factor model, where the factors are the market return and the growth rate of…
A: With risk premium of factor 1 (RP1), risk premium of factor 2 (RP2), sensitivity of portfolio to…
Q: Suppose the current 1-year discount rate on US government bonds is 3% and the 2- year rate is at 6%.…
A: 1 year rate (r1) = 3% 2 year rate (r2) = 6% Let 1 year rate next year = i
Q: The expected constant-growth rate of dividends is ______% for a stock currently priced at $76, that…
A: We need to use constant growth model to calculate growth rate P0 =D0(1+g)r-g where P0=current market…
Q: EXPLAIN THE ADVANTAGE OF offshore trust?
A: Offshore trust is the planning tool to protect your assets, This trust is created in abroad, It is…
Q: Private banking is the provision of wealth management services to high net worth individuals who…
A: A bank may be a sort of financial organization that's permitted to simply accept deposits and supply…
Q: a) On the 10th of December 2020, an investor buys a call option (European) with a strike price of…
A: The contract sold by the option writer to the option holder is represented by an option. The holder…
Q: Last year Vaughn Corp. had sales of $315,000 and a net income of $17,832, and its year-end assets…
A: Du-Pont: A Du-pont analysis is the equation which calculates the return on equity by multiplying net…
Q: What will $82,000 grow to be in 11 years if it is invested today at 8% and the interest rate is…
A: The formula for the future value of the principal = P(1 + (r/m) )mtwhere, P = Principal r= interest…
Q: following table shows the nominal returns on Brazilian stocks and the rate of inflation. Year…
A: Nominal Interest rate = Real Interest rate + Inflation Real Interest rate = Nominal Interest rate -…
Q: how can I calculate like this formula if this is the problem. Problem: Find the accumulated value…
A: Future Value: It the value of a current asset at a future date depend on an assumed rate of growth.
Q: If you want $3,000,000 saved by the time you retire in 40 years and you earn 8% interest on your…
A: Amount required $3,000,000 Time is 40 years Interest rate is 8%
Q: If we have an inflation ratio (f) of 5.0% and a market interest (i) of 1.0%, how much is the…
A: A market interest rate is also called market nominal rate. This rate does not take account of…
Q: how to find net profit margin for pepsi company the year 2019, 2020, and 2021
A: The question is asked to find the net profit margin for pepsi company.Since there is no numerical…
Q: Company A will pay a dividend at the end of each year at 150Php for the next 3 years for Stock A…
A: Share price: Share price is the current market price of the share. It is the price of the share at…
Q: What is the present value of a 12 year lease arrangement with an interest rate of 7.5% that requires…
A: As per the information provided: C= Cash flow = $4,250i = Interest rate = 0.075n = Number of…
Q: the main role of Activity Ratio for pep
A: Activity ratio are very important metrics to judge the efficiency of the company and how company is…
Q: 1. A Machine costs P80,000 and an estimated life of 10 years with a salvage value of P5,000. What is…
A: Depreciation can be defined as the reduction in the value due to wear and tear in asset over a…
Q: Broxton Group, a consumer electronics conglomerate, is reviewing its annual budget in wireless…
A: Profitability Index = Present Value of future expected cash flows / Initial Investment amount NPV…
Q: Joe Levi bought a home in Arlington, Texas, for $141,000. He put down 25% and obtained a mortgage…
A: Loan: It is the amount of credit taken by the borrower from the lender. The borrower makes periodic…
Q: Find the compound amount (with interest) on Php50,000 invested for 10 years at 5.25% interest…
A: An amount invested will earn a certain interest each year. There are both simple interest and…
Q: Carefully compare and discuss the concept of margins in forwards/futures markets and options…
A: Margin is the amount that is deposited as a security in the derivative contracts.
Q: Sue is a customer account representative for ABC Company. She recently acquired several new accounts…
A: A scenario is defined as a set of events that are expected to occur. This is an example of a…
Q: Where did global financial crisis begin?
A: After the great depression of 1930 the global financial crisis was seen in 2007-2008 based on…
Q: In a loan, the principal borrowed plus interest must be repaid. So, part of each loan payment is…
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…
Q: 3. Carl has an account with $73,000 that earns 1.25% interest compounded monthly. Find the amount of…
A: This question can be solved in light of annuity and future value. A fixed sum of money is to be…
Q: In 2021, a company issued 6% bonds with a maturity value of P40,000, together with 1,000 shares of…
A: Increase in share premium as a result of this transaction will be Amount allocated to ordinary…
Q: The dollar-euro exchange rate is USD 1.25 = EUR 1, and the dollar-yen exchange rate is JPY 100 = USD…
A: Cross rate for Euro Yen = USD/EUR * JPY/USD
Q: Suppose that 10 years ago you bought a home for $160,000, paying 10% as a down payment, and…
A: A mortgage is a loan on a property where the collateral to the loan is the property itself.
Q: 10. Scott bought a $5,975 boat on the installment plan. The agreement included a 20% down payment…
A: In the installment purchase system, part of the price is paid upfront called 'Down payment'. Rest is…
Q: A man borrowed from a bank with a promissory note that he signed in the amount of P25000 for a…
A: The following information has been provided in the question: Amount of promissory note = P25000…
Q: Find the accumulated value of ₱ 5,000.00 in 3 ¼ years if it is invested at 15% compounded…
A: Given, Invested amount = 5,000 I/Y = 15/2 = 7.5% per semi annual N =3.25 *2 = 6.5 semi annuals
Step by step
Solved in 2 steps with 2 images
- The following formula is used in determining its optimal level of cash. Assume that the fixed cost of selling marketable securities is P10 per transaction and the interest rate on marketable securities is 6% per year. The company estimates that it will make cash payments of P12,000 over a 1-month period. What is the average cash balance (rounded to the nearest peso)? (check the attached photo) choose the letter of the correct answer a. P1,732.00b. P3,464.00c. P6,928.00d. P8,660.00e. P15,588.00Hollywood Shoes would like to maintain their cash account at a minimum level of $67,000, but expect the standard deviation in net daily cash flows to be $5,700; the effective annual rate on marketable securities to be 6.50 percent per year; and the trading cost per sale or purchase of marketable securities to be $270 per transaction. What will be their optimal cash return point? (Round your answer to 2 decimal places.)National Co. would like to maintain its cash account at a minimum level of P25,000, but expect the standard deviation in net daily cash flows to be P2,000; the effective annual rate on marketable securities to be 7.5% per year, and the trading cost per sale or purchase of marketable securities to be P200 per transaction. What will be their optimal cash return point?
- Your consulting firm will produce cash flows of $190,000 this year, and you expect cash flows thereafter to keep pace with any increase in the general level of prices. The interest rate currently is 5.2%, and you anticipate inflation of about 1.2%. a. What is the present value of your firm's cash flows for years 1 through 5? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Present value b. How would your answer to (a) change if you anticipated no growth in cash flow? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Present valueThe Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. 1. If Sandbox gets a cash infusion of P1 million each time it needs cash, how much would be the average cash balance associated with its cash investment? 2. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the total costs per month associated its cash infusions?Your consulting firm will produce cash flows of $145,000 this year, and you expect cash flows thereafter to keep pace with any increase in the general level of prices. The interest rate currently is 6.9%, and you anticipate inflation of about 2.9%. a. What is the present value of your firm's cash flows for years 1 through 5? Note: Do not round intermediate calculations. Round your answer to 2 decimal places. Present value $ Present value 279,013.75 b. How would your answer to (a) change if you anticipated no growth in cash flow? Note: Do not round intermediate calculations. Round your answer to 2 decimal places.
- [Do not use peso sign and comma. Ex: If your answer is P1,000. just write 1000.] Smart Company is expecting temporary idle cash. Hence, it is considering investing in marketable securities. Assume that the fixed cost of selling marketable securities is P10 per transaction and the interest rate on marketable securities is 6% per year. The company estimates that it will make cash payments of P12,000,000 over a 1-month period. What is the average cash balance (rounded to the nearest peso)? Your answerMexican Motors’ market cap is 250 billion pesos. Next year’s free cash flow is 9.5 billion pesos. Security analysts are forecasting that free cash flow will grow by 8.50% per year for the next five years.a. Assume that the 8.50% growth rate is expected to continue forever. What rate of return are investors expecting? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) b-1. Mexican Motors has generally earned about 13% on book equity (ROE = 13%) and reinvested 50% of earnings. The remaining 50% of earnings has gone to free cash flow. Suppose the company maintains the same ROE and investment rate for the long run. What will be the growth rate of earnings? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal places.) b-2. What would be the rate of return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)mekmek Corporation uses the Baumol Cash Model to determine its optimal cash balance. For the coming year, the expected cash disbursement total to P432,000. The interest rate on marketable securities is P8 per transaction. Using 5% carrying cost rate, what is the optimal cash balance of the company? A. 1,175.76 B. 5,878.78 C. 11,757.55 D. 142,000
- A firm needs a total P30 million in new cash for transaction purposes. The annual interest rate on marketable securities is 12% and the brokerage fee cost per transaction of selling securities to replenish cash is P1,000. Which of the following is closest to the firm’s optimal average cash balance?The Sandbox's Company has cash needs of P5 million per month. If Sandbox needs more cash, it can sell marketable securities, incurring a fee of P300 for each transaction. If Sandbox leaves its funds in marketable securities, it expects to earn approximately 0.50% per month on their investment. If Sandbox gets a cash infusion of P1 million each time it needs cash, what are the holding costs associated with its cash investment?Hollywood Shoes would like to maintain their cash account at a minimum level of $51,000, but expect the standard deviation in net daily cash flows to be $4,100; the effective annual rate on marketable securities to be 6.25 percent per year; and the trading cost per sale or purchase of marketable securities to be $110 per transaction. What will be their optimal upper cash limit? (Round your answer to the nearest dollar amount.) $55,100 $72,328.32 $111,859.83 $74,575.50