Q. 1 Jim makes a deposit of $12‚000 in a bank account. The deposit is to earn interest annually at the rate of 9 percent for seven years. How much will Jim have on deposit at the end of seven years? Q. 2 Find the present value of $10‚000 to be received at the end of 10 periods at 8% per period. Q.3 What is the value of the following set of cash flows today? The interest rate is 8% for all cash flows. Year Amount 1 Rs. 3000 2 Rs.5000 3
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1.5 and that the expected risk premium on the market is 6 percent. The Treasury bill rate is 4 percent. Assume for simplicity that Okefenokee debt is risk-free and the company does not pay tax. a. What is the required return on Okefenokee stock? requity = rf + (rm – rf) = 0.04 + (1.5 0.06) = 0.13 = 13% b. Estimate the company cost of capital. rassets = 0.094 = 9.4% c. What is the discount rate for an expansion of the company’s present business? The cost of capital depends on
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grandmother who is looking for a long-range investment for her grandchild Elliott’s education. I searched the internet to find a Certificate of Deposit‚ which is a CD plan that earns compounded interest to invest her $25‚000. I used the advertised rates‚ the number of compounding periods per year and the time the funds will be invested‚ from the web site I researched to calculate the future value of her investment. Here is a step by step walk through of how I calculated Grace’s future investment
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Capital Investment Decision Strayer University Graduate Accounting Capstone ACC-599 September 28‚ 2013 Professor: Dr. Mary Johnson Abstract The Dodd-Frank Wall Street Reform and Consumer Protection Act‚ signed into legislation in July of 2010‚ by President Barack Obama‚ as a result of the financial crisis that began in 2008‚ which resulted in massive failure of large financial institutions‚ threatening the financial stability of the U.S.‚ as well as the global economy (Dodd‚ C.
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CHAPTER 13 Investment Centers and Transfer Pricing ANSWERS TO REVIEW QUESTIONS 13-1 Goal congruence means a meshing of objectives‚ in which the managers throughout an organization strive to achieve goals that are consistent with the goals set by top management. Goal congruence is important for organizational success because managers often are unaware of the effects of their decisions on the organization’s other subunits. Also‚ it is natural for people to be more concerned with the performance
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index of 6%. The expected return and expected risk of the investments are as follows: Investment Expected return Expected risk index X 14% 7% Y 12 8 Z 10 9 a. If Sharon were risk-indifferent‚ which investments would she selectExplain why. Sharon would select X because the risk-indifferent manager’s attitude is no change in return would be required for the
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GB550: Financial Management Unit 4 Assignment Chapter 24 Question 24-2 Page 964 Security A has an expected rate of return 6%‚ a standard deviation of returns of 30%‚ a correlation coefficient with the market of -.25‚ and a beta coefficient of -0.5. Security B has an expected return of 11% a standard deviation of returns of 10%‚ a correlation with the market of .75 and a beta coefficient 0.5. Which security is more risky? Why? From the problem‚ the standard deviation of Security A is 30%
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Financial Statement Analysis Project--Hershey Corp. & Tootsie Roll Industries Liquidity Based on the ratio analysis performed‚ it appears that the Hershey Company’s liquidity is sufficient to meet cash needs and current obligations. The current ratio and current debt coverage ratios were decreasing from 2002 through 2004‚ which corresponds to an increase in short-term debt and a decrease in cash on the Company’s balance sheet over the same periods. Hershey attributes the increase in debt to
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management involves studying the intricacies of the brand‚ identifying the target audience‚ devising the event concept‚ planning the logistics and coordinating the technical aspects before actually launching the event. Post-event analysis and ensuring a return on investment have become significant drivers for the event industry.[1] The recent growth of festivals and events as an industry around the world means that the management can no longer be ad hoc. Events and festivals‚ such as the Asian Games‚ have
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that come with any type of investment. Also‚ the project could cost a lot of money and it will have to deal with certain restrictions that are set with regulations. In most cases‚ the decision makers will be held accountable for whatever risks or returns that company might come across. As a result‚ those who are making the decisions would have to answer to their owners or shareholders if things do not go according to plans. It is important that the business can pay for any new
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