An Austra ian companv has decided to issue a 90-dav bank-accepted bill domestically to raise additionafunding of S18000 to buy equipment. If the bank has agreed to discount the bill at a yield of 8.5% per annum,which of the following values will the face value of the bill be closest to
Q: money at 10.7% interest per year. How much money must she accumulate by the time she retires in…
A: Present value illustrates the current value of a sum of money that will be received or paid in the…
Q: You are a consultant to a large manufacturing corporation that is considering a project with the…
A: The Capital Asset Pricing Model (CAPM) is a widely used financial theory that relates the expected…
Q: The Montana Hills Co. has expected earnings before interest and taxes of $17,100 forever, an…
A: 1.Value of firm is calculated as follows:-Value of firm = Value of Unlevered firm + value of tax…
Q: Crandal Dockworks is undergoing a major expansion. The expansion will be financed by issuing new…
A: Pre pre-tax cost of debt is also equivalent to the yield to maturity on a bond.The yield to maturity…
Q: Growth Enterprises believes its latest project, which will cost $82,000 to install, will generate a…
A: With next year cash flow (C), constant growth rate (g) and discount rate (r), the present value of…
Q: Ratio MV of Eq/Sales MV of Eq/Book MV of Eq/NI Firm Z Data Sales BV of Equity Net Income S $120.0…
A: To solve this question, we first need to take the average ratios of comparable firms A, B and C.…
Q: Nu-Tech stock's last annual dividend was $1.10 a share. Dividends are expected to increase by 25…
A: Current price of share is present value of stock which is calculate with the help of future benefits…
Q: You are choosing between two projects. The cash flows for the projects are given in the following…
A: NPV is also known as Net Present Value. it is a capital budegting technique which helps in decision…
Q: Find the accumulated value 32 years after the first payment is made of an annuity on which there are…
A: Future value (FV) is the value of an investment or asset at a specified point in the future based on…
Q: A ______ is a business owned by a single individual. Multiple Choice general partnership corporation…
A: Business structure refers to the legal form or organization under which a business operates.…
Q: b-2. What is the dollar-weighted rate of return? (Hint If your calculator cannot calculate internal…
A: The geometric average return, often referred to as the geometric mean return, is a statistical…
Q: our client is 21 years old. She wants to begin saving for retirement, with the first payment to come…
A: There is a need to plan for retirement and if done on time with proper planning based on time value…
Q: Three-year Treasury bills currently yield 6 percent. Four-year Treasury Assume that the expectations…
A: Three-year Treasury bill current yield is 6%.Four-year Treasury bill current is 6.5%.
Q: Holt Enterprises recently paid a dividend, D0, of $2.00. It expects to have nonconstant growth of…
A: The dividend discount model states that value of a stock today is the present value of all its…
Q: mon stock value-Zero growth Personal Finance Problem Kelsey Drums, Inc., is a well-established…
A: Value of stock can be found as the present value of dividend based on the required rate of return of…
Q: Required: a. MF Corporation has an ROE of 15% and a plowback ratio of 40%. If the coming year's…
A: ROE=15%Plowback=40%EPS=$3Market capitalization=12%
Q: Calculate the fair present values of the following bonds, all of which pay interest semiannually,…
A: Present fair value of Bond is the current price of bond which is calculated with the helps of future…
Q: What is the growth rate of the following stream of cash flows? YEAR CASH FLOW 2018 R6 010 2017 R5…
A: Solution:Growth rate means the rate at which the stream of cash flows is rising.So, growth rate =…
Q: initial amount 850000 interest rate 3% pm calculate interest amounts showing results of every month…
A: We can determine the interest schedule using the formula below:Interest earned = previous period…
Q: A local finance company quotes a 17 percent interest rate on one-year loans. So, if you borrow…
A: Effective Annual Rate, is a financial metric that represents the annual interest rate on an…
Q: Assume a machine costs $250,000 and lasts five years before it is replaced. The operating cost is…
A: Present value annuity factor is calculated as follows:-PVAF = wherePVAF = present value annuity…
Q: You have been asked by the president of your company to evaluate the proposed acquisition of a new…
A: FCF is also known as Free cash Flow. It is that amount which is earned from the project from…
Q: Consider the following cash flows: Year Cash Flow 0 −$ 33,500 1 13,500 2 18,200 3 10,900 What is…
A: In finance and investment, IRR is a metric used to evaluate the profitability of an investment. It…
Q: A cement manufacturer has supplied the following data: Tons of cement produced and sold Sales…
A: Solution:Contribution margin refers to the revenue of the firm after deducting variable cost from…
Q: The following table shows your stock positions at the beginning of the year, the dividends that each…
A: The portfolio return is the dividend earned and the difference between the closing and opening price…
Q: In planning for your retirement, you would like to withdraw $40,000 per year for 18 years. The first…
A: Retirement planning should be done based on future requirement and should be done based on time…
Q: The Beta Corporation has an optimal debt ratio of 40 percent. Its cost of equity capital is 12…
A: Weighted average cost of capital (WACC) is the overall cost of capital. It is calculated by…
Q: What is the variance of returns
A: Return means additional benefit received over the invested amount for the period. Every investment…
Q: what is the company's value?
A: We can determine the value of the company using the formula below:
Q: What was the term of a $4850 loan at 4.5% if the interest due at the end was $145.50? Answer (need…
A: Solution:When some amount is invested somewhere, it earns interest on it.So, in case of simple…
Q: Investment A is currently worth $77,700 and is growing at the rate of 11% per year compounded…
A: The FV of an investment refers to the combined value of the cash flows at a future date assuming…
Q: How many years would it take for a debt of $13,655 to grow into $35,514 if the annual compound…
A: Present value (PV) is used to determine the current worth of future cash flows or payments,…
Q: Fegley, Incorporated, has an issue of preferred stock outstanding that pays a $3.95 dividend every…
A: Required return on preferred stock paying perpetual dividend is calculated as follows:-Required…
Q: Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a…
A: Horizon value refers to the value of the cash flow at the start of the sustainable growth period, It…
Q: t to buy a Honda Civic. The MSRP is $26,185. Honda offers a purchase financing plan with no money…
A: Loan amount is the present value of the payment done for the loan based on time value of money and…
Q: The major area of vulnerability for many entrepreneurs is accounts receivable. true or false
A: Entrepreneur is an individual who identifies and creates opportunities to start, develop and manage…
Q: Use the value-at-risk method to determine the maximum percentage loss of the Brazilian real over the…
A: Value at Risk (VaR) is a widely used risk management technique that quantifies the potential loss an…
Q: A BBB-rated corporate bond has a yield to maturity of 10.5%. AUS Treasury security has a yield to…
A: Bonds are debt securities or fixed-income investments that represent a loan made by an investor to a…
Q: Which factor is NOT considered when determining the suitability of investments for a client
A: To determine the investment suitability of a client, we need to determine the client's ability and…
Q: park is expected to be $250 million and the project is expected to return free cash flows of $50…
A: NPV is also known as Net Present Value. It is capital budgeting technique which helps in decision…
Q: Assume you are currently 25 years old and just received an inheritance of $1,000,000 from a wealthy…
A: Money have time value that means more money would be required in the future for same amount and this…
Q: The slope of the security market line is the: Group of answer choices reward-to-risk ratio…
A: The security market line is the important concept when dealing with the relationship between the…
Q: Annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity).…
A: The annuity payments made at the beginning of each period are termed as annuity due. The future…
Q: A $34, 223 simple interest note was dated August 14, and earned 14.79% exact interest for 78 days.…
A: Maturity value is that amount which includes the interest earned on the investment. It is that…
Q: Someone offers an investment opportunity that will pay you $725 at the end o next 17 years. How much…
A: Maximum value is the present value of cash flow from the annuity based on the time value of money…
Q: You own the portfolio below, what is your expected return? % of Portfolio Expected Return 50% 15%…
A: A portfolio refers to a mix of assets that are held by an investor to diversify the risk associated…
Q: What is the future value of a 6%, 10-year ordinary annuity that pays $200 each year? If this were…
A: The future value of annuity is calculated using the formula below:
Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…
A: Here, Expected Return E(R )Standard Deviation Stock Fund (S)24%33%Bond Fund (B)14%22%Risk Free…
Q: Caleb buys a(n) 10.07% corporate bond with a current yield of 6.89%. When he sells the bond one year…
A: Coupon Rate = 10.07%Current Year Current Yield = 6.89%Next Year Current Yield = 7.13%Assuming Face…
Q: Branzini, Inc. has two divisions, Nord and Sud, the revenues of which constitute $60,000,000 and…
A: Business divisions refer to the organizational structure of the different segments in which the…
An Austra ian companv has decided to issue a 90-dav bank-accepted bill domestically to raise additionafunding of S18000 to buy equipment. If the bank has agreed to discount the bill at a yield of 8.5% per annum,which of the following values will the face value of the bill be closest to? a.S17913.31 b.S17641.62 O c.S18744.81 d.$18377.26 e.s17630.48 f.s18000.00 g.S18382.50.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- An American rm owes SFr 6, 000, 000.00 payable in one year. The current spot it$1.3750/SFr. A Swiss bank is paying 1.50% on deposits or will lend at 6.50% AU.S. bank is paying 4.50% or will lend at 8.00%. The rm would like to hedge this exposurewith money market hedging. How much do they need to borrow todayYou are the financial manager for Belltower Associates, which is headquartered in Australia. You have received the below spot and interest rates quotes from your bank: Bid Ask NZD 0.8298/AUD NZD 0.8340/AUD 4.50% 5.00% 0.90% 1.30% Spot exchange rate Interest rate for AUD Interest rate for NZD Suppose that Belltower Associates has a receivable in NZD in one year's time and they wish to engage in a hedge to lock in their domestic (i.e. Australian dollar) currency equivalent of its value. Belltower Associates intends to achieve this by using their bank's spot rates and money market interest rates in order to create a synthetic forward contract. What is the effective forward exchange rate that Belltower Associates is able to achieve for hedging the AUD value of their NZD receivable? O a. NZD 0.8012/AUD O b. NZD 0.8635/AUD O c. O d. O e. NZD 0.8298/AUD NZD 0.8594/AUD NZD 0.7974/AUD NZD 0.8085/AUDGiven we have 100,000 EUR in an EU bank account we consider the below options: "A" - to deposit the money today in a special savings account in the local bank at the current interest rate at r= 1% for one year. • "B" - to convert the amount into the USD if today's exchange rate is E, is €1/$1, transfer and deposit the money in a USA bank at the going interest rate there at r* = 5% for one year. Make an agreement today to convert and return a specified amount of US $ to € one year from today based on the forward exchange rate (F ) of €1.25/$1. The forward exchange contract can be signed today to eliminate any uncertainty. Which of the two is better?
- Case: ER001 on Forex in Trade Finance Bill Amount: USD 100,000.00 You (AD1 Bank in India) are negotiating an Export Bill (under LC) under the Post shipment finance limit (in INR) for your exporter client. You have agreed with client on the post- shipment finance Interest Rate as 10% p.a., payable upfront. How much INR would you credit to the exporter's account on negotiation. Payment Terms: At 60 days after sight Exchange Rate Margin: 0.15% Spot USD/INR=75.5000/5500 Forward Premium 1M: 0.0800/0.1000 Forward Premium 2M: 0.1400/0.1550 • Forward Premium 3M: 0.2300/0.2400 More information provided here ->An Australian company has decided to issue a 90-day bank-accepted bill domestically to farac adamionar funding of $480000 to buy equipment. If the bank has agreed to discount the bill at a yield of 7.06% per annum, which of the following values will the face value of the bill be closest to? O a. $488472.00 O b. $488355.95 O c. $471787.03 O d. $502664.77 e. $484177.97 O f. $480000.00 g. $478686.48EUROCREDIT LOAN:A Swiss sporting goods company borrows in yen in the Eurocredit market at a rate of 4.94 percent from Bank of America using a three-month rollover loan. Bank of America assigns a default risk premium of 1.93 percent on the loan, and the country risk is an additional 0.76 percent. The bank can borrow funds in the Euromarket at the three-month LIBOR rate of 0.30 percent. What is Bank of America’s gross profit margin on this loan?
- The spot rate is $0.51/CAD1. Platinum Bank undertakes arbitrage transactions in CAD using a sum of $100 million. Annual interest rates are 9.8 per cent in Australia and 5.8 per cent in Canada. The bank can borrow or lend at these rates. What is the expected spread, if the forward rate is $0.55/CAD1? a. 2.5788% O b. 4.2980% c. None of the options is correct d. 3.6533% e. 5.5875%One year borrowing and deposit interest rates are 12.5% and 10.5% respectively in the US and 10.5% and 8.5% respectively in Germany. The spot exchange rate for the US dollar is $1.50 to the EURO. The 12-month forward rate is $1.55.i) Assuming you do not have any initial investment funds, suggest a way you might profit from the pricing inconsistency presented above. Start with a borrowing amount and then explain and calculate the gain/loss with the rates that you will borrow and deposit.ii) Will the situation persist forever? Explain your answer.XYZ Corporation, located in the United States, has an accounts payable obligation of ¥1500 million payable in six months to a bank in Tokyo. The current spot rate is ¥116/$1.00 and the six month forward rate is ¥109/$1.00. The annual interest rate is 3 percent in Japan and 6 percent in the United States. a) What is the future dollar cost of meeting this obligation using the money market hedge a. $92,307. b. $ 19582168.89 c. $13054779.26 d. $ 6589854.111
- Please use this information to answer the question below. A US firm's expected Accounts Receivables from Canada due in 90 days Current Spot Rate (SR) for CAD The 90-day Forward Rate for CAD If the US firms uses a forward hedge, estimate the cost of hedging the receivable if the spot rate for CAD 90 days later turns out to be $0.65 O $100,000 O Ⓒ$60,000 CAD 2,000,000 $0.70 $0.68 O 4Suppose a German importer owes an Australian exporting company 150,000 AUD, due in three months. S_0 (EUR/AUD) 0.60 Se (EUR/AUD) 0.50 (0.3) and 0.65 (0.7) Premium on AUD call option R = EUR0.02 Exercise exchange rate E = 0.62 Time to expiry 3 months What is the expected value of payables in AUD under hedge Will the option to hedge be undertaken on the basis of expected spot rate? Explain.Suppose a German importer owes an Australian exporting company 150,000 AUD, due in three months. What is the expected value of payables in AUD under hedge?