A local government awards a landscaping company a contract worth $1.50 million per year for five years for maintaining public parks. The landscaping company will need to buy some new machinery before they can take on the contract. If the cost of capital is 7%, what is the most that this equipment could cost if the contract is to be worthwhile for the landscaping company? OA. $6.15 million OB. $5.54 million OC. $6.46 million ***
Q: Can you please elaborate on part c). Which portfolio is the recommended one?
A: You had asked a question on portfolio theory. The solution was provided to you. You have asked a…
Q: Shrewsbury Herbal Products, located in central England close to the Welsh border, is an oldline…
A: A) To calculate the exchange rate that would eliminate all the profit, we need to find the euro/£…
Q: You took out a 30 year mortgage of $300,000 for your new apartment. The APR for your loan is 3.5%.…
A: Mortgage period = 30 years Mortgage amount = $300,000 Interest rate = 3.5%
Q: Provide the formulas to calculate the following items from a company's financial statement: 1. Cash…
A: Ratio analysis is a method of analyzing a company's financial performance by comparing different…
Q: An individual wishes to deposit a certain quantity of money now no that at the end of five years he…
A: We can solve this problem by using the formula for compound interest: A = P(1 + r/n) (nt) where: A =…
Q: What is the present value of the following set of cash flows, discounted at 15.7% per year? Year CF…
A: Present value is the estimation of the current value of future cash value which is likely to be…
Q: Apollo Enterprises has been awarded an insurance settlement of $3,000 at the end of each 6 month…
A: The PV of an investment refers to the value of the investment’s cash flows at present assuming they…
Q: Apex Corporation’s economic unit estimates that the probability of a good business environment next…
A: The profit or loss that an investor anticipates on an investment with known historical rates of…
Q: If an investor that owns a portfolio with 3 stocks increases their portfolio to 30 stocks, which of…
A: When a portfolio is created, then it includes different types of stocks and other securities. It…
Q: You own a portfolio consisting of 100 shares of Stock A (Beta A = 1), 150 shares of Stock B (Beta B…
A: A customized portfolio comprising of stock A, stock B and risk free assets has been created. The…
Q: A British business has completed transactions in Switzerland and the US. They have 4 thousand Swiss…
A: Exchange rate is the rate at which one currency will be exchanged for another currency.
Q: Required information [The following information applies to the questions displayed below.] Project Y…
A: Accounting rate of return = Annual Income ÷ average investment. Average investment ( if salvage…
Q: Sales Variable expenses Contribution margin Fixed expenses Net income Tingler Shocker $298,000…
A: The net income of a company refers to its profits after all the expenses have been taken into…
Q: It is the beginning of 1979. Atari has decided to introduce a new video game system called the Atari…
A: 1. Net present value(NPV) is calculated by deducting initial investment from present value of cash…
Q: Based on the parameters calculated, should this project goes ahead? Give your reasons for your…
A: Based on the economic parameters provided, it seems that the solar panel project is not very…
Q: The table below shows rates on zero-coupon Treasury securities: Maturity (years) 1 2 3 Yield 3.2%…
A: The expectations theory refers to the relation between the forward rates and the long-term and…
Q: Give typing answer with explanation and conclusion Stock A has an expected return of 15% and a beta…
A: To calculate the percentage of money that should be invested in the stock to get a portfolio beta of…
Q: Working Capital Current Ratio Quick Ratio / Acid Test Ratio Cash Ratio 2019 48, 250,000 1.69 1.35…
A: Introduction: Working Capital-It is the difference between a company's current assets and its…
Q: Provide your detailed explanations to the following questions: 1) You purchase 550 shares of…
A: Margin trading involves borrowing money from a broker to buy stocks, and the amount borrowed is…
Q: Assuming PepsiCola, Atlanta is considering of giving its main rival a strong competition, in the…
A: NPV NPV is a realistic approach to evaluate a capital project, the decision to invest or not should…
Q: Jones can deposit $5,700 at the end of each six-month period for the next 12 years and earn interest…
A: The idea of the time value of money holds that a quantity of money is worth currently more than it…
Q: D e s c r i b e , c o m p a r e , a n d c o n t r a s t t h e f o l l o w i n g c o m m…
A: The valuation of common stocks is a complex process that requires consideration of multiple factors,…
Q: 3. How much should I expect a lump sum from a deal at the end of 3 years if I start investing today…
A: Compound = quarterly = 4 Time = t = 3 * 4 = 12 Payment = p = P5800 Interest rate = r = 15 / 4 =…
Q: Sato Company is considering an investment in equipment that is capable of producing more efficiently…
A: According to bartleby guidelines , if question involves multiple subparts, then 1st sub 3 parts…
Q: 5. Life Required rate of return Annual profit years 14 5-7 Repairs in year 6 Year 9 8-10 Sell for…
A: 1. Net present value is calculated by deducting initial investment from present value of cash…
Q: You recently did your finances, and realize you can afford a monthly paymentof $3,220 for a house.…
A: Data given: Monthly payment (PMT)= $3,220 Rate=6.1% N=30 years Working Note#1 Calculation of…
Q: You can buy or sell the £ spot at $1.98 to the pound. You can buy or sell the pound one-year forward…
A: Here, Spot price = $1.98 Forward price = $2.01 U.S. Interest rate = 5% To Find: One-year British…
Q: Finance In Class Assignment 2 April 13, 2023 Case Study Cable & Moore With the company expanding…
A: 1.Schedule for hiring new employees: Total cost of this schedule is $58,000. Limitations of this…
Q: Ve are attempting to compare the performance of two portfolio managers. Based on data gathered for…
A: Expected rate of return is the investor which an investor is expecting from investment in particular…
Q: 1.20 1.34 1.51 1.26 1.38 1.50 1.09 0.00 0.00 0.00 0.42 0.46 0.50 1.09 1. 0.12 0.12 0.12 0.12 0.12…
A: To calculate the value of the concatenator business, we need to calculate the present value of the…
Q: You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets.…
A: Interest earned ratio represents a measure of the firm to payoff its debt obligations from its…
Q: "Rough & Ready" is a tool manufacturing business based in Melbourne. The entity's tax rate is 30%.…
A: (a) The cash flows associated with the equipment replacement project are as follows: Year 0: Initial…
Q: Interpret the following stock price quote. In addition, what is Sizzler's approximate earnings per…
A: Price of the stock is the last trading price given. Here, price of the stock Sizzler is 6
Q: ______ is the process of determining the price that market participants would likely pay for…
A: Valuation is a process used to estimate the intrinsic value of an asset like stock, bond, business…
Q: Shady Rack Inc. has a bond outstanding with 9.75 percent coupon, paid semiannually, and 17 years to…
A: Yield to Maturity(YTM) of a bond is the interest rate that makes the present value of the cash flows…
Q: Give your answers to the following questions as percentages to 3 de imal places, showing working for…
A: Nominal rate is without considering impact of compounding and while annual percentage yield is with…
Q: What is the holding period yield for an investor who pays $1,050 for a three-year bond with a $1,000…
A: A bond is a kind of debt security issued by the government and private companies for raising funds…
Q: Use the add-on method of calculating interest to find the total interest and the monthly payment.…
A: The add-on interest method is a way to figure out how much interest has been paid overall during the…
Q: A man needed money to buy lawn equipment. He borrowed $700.00 for eight months and paid $53.98 in…
A: Borrowed Amount=$700 Interest =$53.98 Time period=8 months Required: Rate of return=?
Q: Calculate the cash discount and the net amount due the transaction (in $). (Round your answers to…
A: 4/10, n/30 means that there will be 4 % discount on amount of invoice ,if payment is made within 10…
Q: As one of the loan officers for Grove Gate Bank, calculate the monthly principal and interest, PI…
A: Monthly payment refers to an amount that is paid every month for the repayment of the loan amount…
Q: You want to start a scholarship fund at your alma mater with giving one $10,000 scholarship…
A: It needs to be checked, if with a given sum of money to start with, a scholarship in perpetuity can…
Q: Bob has been investing $5,000 in stock at the end of every year for the past 10 years. If the…
A: Payment = pmt = $5000 Time = nper = 10 years Future value = fv = $85,000
Q: A K100, 000 Treasury bill currently sells at 95% of its face value and is 65 days from maturity.…
A: To calculate the discount yield, we use the following formula: Discount Yield = (Discount / Face…
Q: You may attempt this question 3 more times for cre Financial analysts have estimated the returns on…
A: The returns from a stock or returns from the market is not always same. It varies as per the…
Q: A company is considering a capital investment of $16,000 in new equipment which will improve…
A: Introduction: Payback period:-It represents the time period required for recovery of the initial…
Q: Hamza Limited produces and sells two products. Product A sells for £14 per unit and has a total…
A: A) The Break-Even Point (BEP) is the level of sales at which the total revenue equals the total…
Q: Go Fly A Kite is considering making and selling custom kites in two sizes. The small kites would be…
A: Annual operating cash flow is the amount of cash flow available from the core business of the…
Q: Mike purchases a bicycle costing $176.70. State taxes are 5% and local sales taxes are 2%. The store…
A: Total Cost of Purchase is that value which includes the Basic price of goods and all the taxes which…
Don't hand writing
Step by step
Solved in 3 steps
- A local government awards a landscaping company a contract worth $1.30 million per year for five years for maintaining public parks. The landscaping company will need to buy some new machinery before they can take on the contract. If the cost of capital is 5%, what is the most that this equipment could cost if the contract is to be worthwhile for the landscaping company? A. $5.35 million B. $5.63 million C. $5.91 million D. $5.07 million4. A city is planning to invest $710,000 for a water treatment plant and need to select projects from the following list. Select any or all of the following independent projects using a MARR of 10% per year (HINT: Calculate PW for all feasible bundles, show PW values for all feasible bundles in the solution and select the bundle). What is the largest PW value? Project Initial Annual cost Salvage Value Life, Investment years 4 A -140,000 -300,000 50,000 45,000 В 90,000 150,000 -10,000 4 -590,000 100,000A local government has funded a public project with the following data. Initial investments $5,000,000 Annual benefits $1,500,000 Annual operating and maintenance (O&M) costs $300,000 Salvage value $500,000 Project life 8 years Interest rate (i) 6% A) Determine whether the project is a good investment by using conventional B-C (Benefit-Cost) ratio based on AW (Annual Worth) method. B)Determine whether the project is a good investment by using modified B-C (Benefit Cost) ratio based on PW (Present Worth) method.
- Perit Industries has $135,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are: Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years. Life of the project Project A 1. Net present value project A 2. Net present value project B 3. Which investment alternative (if either) would you recommend that the company accept? $ 135,000 $0 $ 25,000 $ 9,800 6 years Project B $0 $ 135,000 $ 63,000 $0 6 years The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 17%. Click here to view Exhibit 148-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project A. (Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount.) 2. Compute the net present value of Project B. (Enter…A small bridge can be constructed for $ 20,000 with a life of 30 years, after which it can be rebuilt at the same cost. Maintenance cost for the 30 - year life are estimated to be $ 1,000 each year for the first 5 years, and increase to $ 1,500 in the succeeding years thereafter. Compute the capitalized cost of the bridge at 12%. Select one: a. $ 33,459 b. $ 34,128 c. $ 31,388 d. $ 32,526n: A water system is to be build to serve a newly developed subdivision. This subdivision will use 300,00,000 liters of water per year. the facilities to be installed cost P1,500,000 and it is estimated that the operations and maintenance of the system will cost P70,000 annually. Operating taxes will be P24,000 per year and income taxes will be 25% of the first P100,000.00 net revenue 35% of the net revenue over P100,000.00. The life of the water system properties is 80 years ang 5% sinking fund is to be established for deprecation. at what rate per cu. meter must be the water be sold to return an annual net profit of 6% after income taxes on the original investment?
- A county in Tennessee is considering the following public interest project. Initial Cost $22.5M Annual Maintenance Cost $525K EUAB $3.3M Given a useful life of 12 years and an interest rate of 4%, the benefit /cost ratio is........... A. 1.01 B. 1.67 C. 1.48 D. 1.51.The construction cost of a permanent water park is $550,000. Annual maintenance and operation costs are $100,000 per year. A) At an interest rate of 7% per year, find the capitalized cost of the park in present worth. (Hint: a capitalized cost is when every cost is brought to present worth, in this case the upfront construction costs are current). B) What would be the annualized cost if the whole project was to be financed over 25 years at 6% interest?Perit Industries has $155,000 to invest in one of the following two projects: Cost of equipment required Working capital investment required Annual cash inflows Salvage value of equipment in six years Life of the project Project A $ 155,000 $ 25,000 $ 8,600 6 1. Net present value project A 2. Net present value project B 3. Which investment alternative (if either) would you recommend that the company accept? X Answer is complete but not entirely correct. Project B $0 $ 155,000 $ 40,000 years The working capital needed for project B will be released at the end of six years for investment elsewhere. Perit Industries' discount rate is 14%. Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value of Project A. Note: Enter negative values with a minus sign. Round your final answer to the nearest whole dollar amount. 2. Compute the net present value of Project B. $(53,971) 70,527 X Project B $0…
- The following data pertain to an investment currently being considered by Kalamazoo Corporation: Investment in the project: $14,000 Net annual cash inflows: 2,800 Working capital: 5,000 Salvage value: 1,000 Life of the project: 10 years The working capital would be released for use elsewhere when the project is completed. What is the net present value of the project, using a discount rate of 8% $2,566 ($251) $251 $5,251(b) The Pahang State Government is plan to provide a project to establish a large flood drainage culvert from the Chalet and RKT Homestay to Tasik Cini. The initial cost spent is RM 2,000,000 for the job and the cost and benefit items are shown in Table Q2(b). The MARR is 6% per year, and the project's life is 30 years. Evaluate this project based on; Table Q2(b): Cost and Benefit Cost and Benefit Items RM Right of way maintenance Major upkeep every six years, starting at the present time Annual benefit to the taxpayers 30,000 per year 50,000 135,000 (i) Conventional PW B/C ratio (ii) Conventional AW B/C ratio1. The company is setting aside funds to acquire a property for its new warehouse. The company needs P74,735 to make the down payment. The company deposits P5,000/month in the fund account which pays 1% per month. As the financial manager you have been tasked to determine how long it will take to accumulate enough funds to acquire the property?