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- Suppose you purchase a new house for $200 000, making a down payment of 5% and takingout a mortgage on the balance. What is the return on your investment in your house if one yearlater the price of your house increased by 10%? (show your work).A) 100%B) 150%C) 200%D) 220%Mf1. 6) Lindsey Lohan is a foreign exchange trader for a bank in New York. She has $1 million (or its Swiss franc equivalent) for a short-term money market investment and she decides to seek the full 4.800% return available in US dollars by not covering her forward dollar receipts -- an uncovered interest arbitrage (UIA) transaction. Assess this decision. She faces the following quotes: Assumptions Value Arbitrage funds available $1,000,000 Spot exchange rate (SFr./$) 1.2810 3-month forward rate (SFr./$) 1.2740 Expected spot rate in 90 days (SFr./$) 1.2700 U.S. dollar 3-month interest rate 4.800% Swiss franc3-month interest rate 3.200%Use the following information to answer the question which immediately follows 200-80r, L= 0.5Y Y 2,000 GT= 200, Cd 400+0.9(Y What is the value of investment 2. T)-600r. Id Select one: a 150 4 b. 160 360.5 d. 200 500, M-5000, P=7.35,=0.02 27
- An economy is currently at it's steady state. Their depreciation rate is 10.5% and their capital stock is 1,237. What will be their level of investment? Do not round until your final answer, when you may round to two decimal places.Calculate change in stock if gross domestic capital formation is $500 million, gross fixed capital formation is $420 millionAn investor has an account with stock from two different companies. Last year, his stock in Company A was worth $2500 and his stock in Company B was worth $6360. The stock in Company A has decreased 23% since last year and the stock in Company B has decreased 5%. What was the total percentage decrease in the investor's stock account? Round your answer to the nearest tenth (if necessary).
- Matollows and 250 shillings in the following year. After that, dividends are expected to grow at constant 5% per year. If the required rate of return is 10%, what price should investors pay for such shares today? 4. Suppose a firm is considering a project that would require an initial cash outlay of 15 million shillings and expected to generate shs 4.5 million each year for the next 4 years. The firm assumes that the prices and costs increases at the same rate and that the required rate of return expressed in nominal terms is 14%. The firm also practices a policy whereby cash flows are stated at the prices of period zero. The inflation rate is expected to be 5%. (a)Outline two ways in which the effects that inflation has on the acceptability of investment projects could be considered. (b)Using the NPV technique, is the project worth taking? What have you learned from your analysis as far as treating inflation in investment analysis is concerned? 30/2021 4:39:41 PM Page 1 of 2Eduardo has $7,000 in savings. His bank pays 6% interest per year on savings. He withdraws all of his savings to purchase a machine for his business. At the end of the year, he can resell the machine for $1,000. Based on this information, what are Eduardo's economic costs for the year, in dollars? Enter a number only, no $ sign.Millon National Bank has 8 million British pounds (£) in one-year assets and £6 million in one- е. year liabilities. In addition, it has one-year liabilities of 3.5 million euros (€). Assets are earning 8 percent and both liabilities are being paid at a rate of 7 percent. All interest and principal will be paid at the end of the year. What is the net interest income in dollars if the spot prices at the end of the year for US $ to British £ are $1.30/£ and for Euro to US $ are €1.25/$
- Calculate the net present value (NPV) before tax of investment A: a factory. Base your calculation on the following information: The investment cost is paid in full in quarter 0, and the cost of the factory is 100000. The factory has a lifetime of 20 quarters (5 years) and the value of the factory at the end of quarter 20 is 0 Only Basic jetpacks should be manufactured at the factory throughout its lifetime. There is no investment in research to streamline production or material consumption. Suppose the quarterly demand in the market is constant and given at P = 228 - 0.007 * Q, where P is price and Q is the number of jetpacks in demand. There are 5 competitors in the market (including you), and all sell the same number of jetpacks each quarter at the price of 193 each. You produce as much as you sell. The costs associated with the quarterly production at the factory are given at K = 158 * Q + 20000, where 158 * Q is direct labor cost and materials, and 20000 is quarterly maintenance…Calculate the value of gross fixed capital formation if gross domestic capital formation is $800 million and the Change in stock is $50Calculate the value of gross domestic capital formation if:- Gross fixed capital formation = $650 million Change in stock = $60 million