Use a spreadsheet software (for example, MS Excel), construct an amortization table for the following mortgage. In the amortization table, provide all the information listed below. (Assuming interest is compounded monthly and payments are due at the end of the month). For a 15-year variable-rate-level-payment mortgage (VRM) o
TIME VALUE OF MONEY Please show all work, or inputs on the financial or graphing calculator, to receive credit for your answers. No credit will be given for answers without calculations or inputs. You must include a timeline with each problem 1. You would like to buy a house, and have researched the mortgage market. Your
17. You are in the business of selling widgets. You retail these fine looking widgets for $25.00 a piece and you have 1,000 of them in inventory. If your total fixed costs are $150,000 and your total variable costs are $10,000 what is: Your breakeven in units________________________
An investment is expected to generate $2,000,000 each year for four years. If the firm's cost of funds is 5%, what is the maximum amount the firm should pay for the investment? Please respond in Excel.
1) Calculate the average returns, variances, & the standard deviations for X and Y. For average return and s.d. (Input answers rounded to 2 decimal places. For variance round answers to 4 decimal places). Returns Year X Y 1 20 % 21 %
A company issued 10%, 10-year, $10,000,000 par value bonds that pay interest semiannually on April 1 and October 1. The bonds are dated April 1, 2004 and are issued on that date. The market rate of interest for such bonds on April 1, 2004 is 8%. The company uses the effective interest rate method of amortization. 1. Prepar
Search for three public companies that you may want to invest in. You may want to consider three companies in the same industry. Make sure they provide their financial information online. You could go to each company's website and look in the investor relations area. A better way is to research Yahoo Finance [http://finance.yaho
51. Pick the statement that is most correct. 1. The SML relates required returns to firm's systematic or market risk. The slope and intercept of this line cannot be controlled by the financial manager. 2. The slope of the SML is determined by the value of the beta. 3. If you plotted the returns of a given stock agai
Most correct Statement. 1. If you add enough randomly selected stocks to a portfolio, you can completely eliminate all the market risk from the portfolio 2. If you formed a portfolio which included a large number of low beta stocks (less than 1.0 but greater than -1.0), the portfolio would itself have a beta coefficient
Using the income statement for Paste Management Company compute the following ratios: a. The interest coverage. b. The fixed charge coverage. The total assets for this company equal $80,000. Set up the equation for the Du Pont system of ratio analysis, and compute c, d, and e. c. Profit margin. d. Total asset turnover.
Jan-05 Jan-04 Jan-03 Jan-02 Jan-01 Current Ratio Current Assets 1.69 1.55 1.59 1.37 1.16 Current Liabilities Quick (Acid-Test) Ratio Current Assets-Inventory 1.04 0.91 0.95 0.74 0.49 Current Liabilities Inventory Turnover Cost of Goods Sold
To accumulate $8,000 by the end of 5 years by making equal annual end-of-year deposits for the next 5 years. If earning 7% on the investments, how much must be deposited at the end of each year to meet the goal?
You have contracted to purchase a $10,000,000 multi-family property with $2,000,000 cash down payment as equity and an $8,000,000 mortgage loan. Assume mortgage rates for this type of investment property are 8.50% fixed rate, fully amortized over 30 years, with monthly payments of interest and principal. (1) Construct an
Suppose a firm used a debt to leverage up its ROE, and in the process its EPS also was boosted. Would this lead to an increase in the price of the firm's stock?
Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit. a. Compute the break-even point. b. Ms. Watts comes up with a new plan to cut fixed costs to $75,000. However, more labor will now be required, which will increase variable costs per unit to $17. The sales
60. (Ignore income taxes in this problem.) In order to receive $12,000 at the end of three years and $10,000 at the end of five years, how much must be invested now if you can earn 14% rate of return? A) $12,978. C) $13,290. B) $8,100. D) $32,054. 61.Lusk Company produces and sells 15,000 units of Product A each mont
But what is our liability? Ditka engineering company has signed a third party loan guarantee for liberty company . The loan is fro the national bank of illinois for $500,000. Liberty has recnetly filed for bankruptcy , and it is estimated by the companys auditors that creditors can expect to receive no more than 40% of their c
Assume you are looking at many companies with equal risk; which ones will have the highest stock prices?
I need help with the attached questions. Work does not need to be shown. --- 10. You will receive a $100,000 inheritance in 20 years. You can invest that money today at 6% compounded annually. What is the present value of your inheritance? a. $27,491.25 b. $29,767.15 c. $31,180.47 d. $35,492.34 e. $100,000 11.
I need help with question 3 and question 15. (See attached file for full problem description)
Chapter 6 5. Procter Micro-Computers, Inc., requires $1,200,000 in financing over the next two years. The firm can borrow the funds for two years at 9.5 percent interest per year. Mr. Procter decides to do economic forecasting and determines that if he utilizes short-term financing instead, he will pay 6.55 percent interest i
1. Gomez Electrics needs to arrange financing for its expansion program. Bank A offers to lend Gomez the required funds on a loan in which interest must be paid monthly, and the quoted rate is 8%. Bank B will charge 9%, with interest due at the end of the year. What is the difference in the effective annual rates charged by
NPV. A proposed nuclear power plant will cost $2.2 billion to build and then will produce cash flows of $300 million a year for 15 years. After that period (in Year 15), it must be decommissioned at a cost of $900 million. What is project NPV if the discount rate is 5%. What if it is 18%?
Corporate Finance : Present and Future Values, Annuity Future Values, EAR vs APR, Amortization with Equal Payments, Break-Even EBIT and Leverage
The Problem is for a Corporate Finance Course. The author is Ross-Westerfield-Jordan: Essentials of Corporate Finance. Fourth Edition. I have circled the questions that I need help answering. If you would, please show all work and or fomulas. (this is what always throws me off) I need the following questions answered:
What factors would cause a difference in the use of financial leverage for a utlility companyand an automobile company? Explain how the break-even point and operating leverage are affected by the choice of manufacturing facilitites (labor intensive versus capital intensive)? What does risk taking have to do with the use of
One statement is correct or all are false When financial leverage is used, the graphical probability distribution of net income would tend to be more peaked than a destribution where no leverage is present, other things held constant From an operational standpoint the goal of maintaining financial flexibility translates i
Describe the schematic structure/relationships of a firm from its sources of capital to sales and fiscal and monetary policies. Do the firms actions feedback or interact with government economic policy?
A small business expects an income stream of $5000 per year for a four-year period. a) Find the present value of the business if the annual interest rate compounded continuously is: (1) 3% (2) 10% b) in each case, find the value of the business at the end of the four-year period.
A company is evaluating two systems. The company's revenue stream will not be affected by the choice of the systems, the projects are being evaluated by finding the PV of each set of costs. The company's required rate of return is 13% and it adds or subtracts 3 percentage points to adjust for project risk differences. System
What is the expected return on a portfolio if an equal amount is invested in each stock? What would be expected return if 50 percent of your funds is invested in stock A and the remaining funds are split evenly between stocks B and C? Stock A 7% Stock B 12 Stock C 20 You are considering two stocks and have determined