Tom Phillips has just invested $8,760 for his son (age one). This money will be used for his son's education 17 years from now. He calculates that he will need $60,000 by the time the boy goes to school. What rate of return will Mr. Phillips need in order to achieve this goal?
How much would you have to invest today to receive: a. $12,000 in 6 years at 12 percent? b. $15,000 in 15 years at 8 percent? c. $5,000 each year for 10 years at 8 percent? d. $40,000 each year for 40 years at 5 percent?
A. How is the interest payment on TIPS (Treasury Inflation-Protected Securities) calculated? What is the base measure? b. How are TIPS sold? c. Is the interest earned on TIPS taxable?
If you purchase a home for $165k at 5% interest, what would the monthly payments be for a 15 year mortgage and for a 30 year mortgage? Which mortgage would you choose and why?
Integrated Potato Chips paid a $1 per share dividend yesterday. You expect the dividend to grow steadily at a rate of 4 percent per year. a. What is the expected dividend in each of the next 3 years? b. If the discount rate for the stock is 12 percent, at what price will the stock sell? c. What is the expected stock price 3
Please help with the following problems. Risk and Return. True or false? Explain or qualify as necessary. a. The expected rate of return on an investment with a beta of 2 is twice as high as the expected rate of return of the market portfolio. b. The contribution of a stock to the risk of a diversified portfolio dep
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession .20 -5% +14% Normal economy .60 +15 +8 Boom .20 +25 +4 Use the data in the problem and consider a portfolio with weights of .60 in st
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession .20 -5% +14% Normal economy .60 +15 +8 Boom .20 +25 +4 a. Is it reasonable to assume that Treasury bonds will provide higher re
Please check my answer my bank balance is not balancing.Please let me know where i made a mistake and give me the correct figure.Please help me as I am preparing for my final exams. Dougal and Florence, who have been in a partnership for many year, decided to retire and dissolve the partnership on 30 september 2003. Profits
I am attaching excerpts of the proposed problem. If this is not something that you can help with, let me know as I am completely befuddled. If this is something that assistance can be provided for and I have not posted enough credits, let me know. This information is needed by 8/27/04.
MZC Ltd draws $2,000,000 in 180-day BABs at the current market rate of 7.0% p.a. What proceeds will the firm receive from discounting the bill if the bank charges an acceptance fee of 1.5%? What is the firm's annualized cost of funds taking the acceptance fee into account? With all calculations.
"If financial markets operated perfectly and without cost financial intermediaries would not exist. All finance would be direct finance." Explain what is meant by the term "direct finance" and state whether you agree or disagree with this statement. Explain why.
I need some help in answering the following two questions: 1. What procedures can a multinational employ to minimize exposure to political risks? 2. What are the characteristics of corporate winners and losers in mergers?
The excel file is attached. I need the follwoing to be calculated: a. Inventory conversion period; b. Payables deferral period; c. Receivables conversion period; d. Operating cycle; e. Cash conversion cycle (cash gap); f. If the company's cost of funds is 8%, what is the annual cost of financing the cash gap?
The Manning Company has the following financial statements, which are representative of the company's historical average. (file is attached) The firm is expecting a 20 percent increase in sales next year, and management is concerned about the company's need for external funds. The increase in sales is expected to be carried o
Deliverable Length: 1 page To avoid any uncertainty regarding his business' financing needs at the time when such needs may arise, Cyrus Brown wants to develop a Cash Budget for his latest venture- Cyrus Brown Manufacturing (CBM). He has estimated the following sales forecast for CBM over the next nine months: March 200
Need some help in answering these questions: 1. Identify the importance of off balance sheet financing with respect to tax and accounting issues? 2. How does EBIT/EPS analysis allow financial managers to determine the capital structure of the firm? 3. What benefits accrue to a company by going public? Wha
Consider the following statement by a financial manager: "Since we are financing our new manufacturing facility 100% with equity, we must evaluate it using a higher rate of return than we would if we financed a portion of the facility with debt." Do you agree? Why or why not? Be sure to fully explain the rationale behind your ar
ABC Manufacturing is thinking of launching a new product. The company expects to sell $900,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 55% of sales. Indirect incremental costs are estimated at $80,000 a year. The project will require a new p
To avoid any uncertainty regarding his business' financing needs at the time when such needs may arise, Cyrus Brown wants to develop a Cash Budget for his latest venture- Cyrus Brown Manufacturing (CBM). He has estimated the following sales forecast for CBM over the next nine months: March 2004 $250,000 April 275,000 Ma
Coke's and Pepsi's ratio analysis in excel format is enclosed. 1. For each company, describe what the ratio results mean to management (e.g. a current ratio of 1.30 means the company's current assets are 1.3 times their current liabilities). 2. Compare the two years and discuss how these trends may impact the financial c
Given below are the present value factors for $1.00 discounted at 8% for 1 to 5 periods. Each of the following items is based on 8% interest compounded annually from day of deposit to day of withdrawal. PERIODS PRESENT VALUE OF $1 DISCOUNTED AT 8% PER PERIOD 1 0.926 2 0.857
You work for an investment firm and recently wrote a position article on your firm's approach to risk. The article now appears on your company's website. It has, interestingly enough, generated e-mailed responses from potential clients and your firm is asking you to address some of their questions for a Frequently Asked Question
By walking you through a set of real-time financial data for IBM, you will better understand how theoretical stock prices are calculated; and how prices may react to market forces such as risk and interest rates. Use both the CAPM and the Constant Growth Model (CGM) to arrive at IBM's stock price. To get started, do the follow
Can an organization grow itself into bankruptcy? Can you please explain why?
I'm lost on the calculations?? I can talk about why or how investors think about investing in a company but I am not sure I understand the numbers with regard to ratios. Investors will judge a company on 1.Profitability 2.Liquidity 3.how much debt and 4. marketability (product will sell). In short investors want to know they
Can you please explain what primary financial statements are, and how are they connected but also different? How do the primary financial statements work together for an organization?
Two Projects are being considered by a firm are mutually exclusive and have the following projected cash flows: Year Project A Cash Flow Project B Cash Flow 0 -$100,000 -$100,000 1 $39,500 0 2 $39,500 0 3 $39,500
BC Manufacturing is thinking of launching a new product. The company expects to sell $900,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and materials will be 55% of sales. Indirect incremental costs are estimated at $80,000 a year. The project will require a new pl
CALCULATING STOCK PRICES USING REAL-TIME DATA We will use both the CAPM and the Constant Growth Model (CGM) to arrive at IBM's stock price. To get started, let us do the followings. 1. Find an estimate of the risk-free rate of interest, krf. To get this, go to www.bloomberg.com , click on skip intro and click on Market Data