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Get college assignment help at uniessay writers 2.300 Investment in capital equipment (in € thousand) initi 5 Useful life of the equipment (in years) Residual value of the equipment at the end of year 5 (in thousand) Investment in raw, auxiliary and operating materials (in € thousand) Estimated sales volume in year 1 (in thousand) Estimated sales volume in years 2 to 5 (in € thousand) Sales price per unit (E/unit) Variable costs per unit (E/unit) Fixed costs excluding depreciation (in € thousand) Depreciation, linear over useful life (in € thousand) Required rate of return (% p.a. ) Tax rate (%) 300 300 500 -600 8,00 5,00 800 400 12% 40%
Question 2 Broad Company purchased 70 percent of Minor Company’s stock approximately 20 years ago. On 1 January, 2019, Broad purchased a building from Minor for $600,000. Minor had purchased the building line depreciation life is unchanged as a result of the intercompany sale. Ignore taxes. Financial year ends on 31 December. on 1 January, 2011, at a cost of $800,000 and used straight- on an expected life of 20 years. The asset’s total estimated economic Required (a) What amount of depreciation expense on the building will Broad report for 2019? (b) What amount of depreciation expense would Minor have reported for 2019 if it had continued to own the building? (c) Give the consolidation entry or entries needed to eliminate the effects of the intercompany building transfer in preparing a full set of consolidated financial statements at December 31, 2019. (d) What amount of income will be assigned to the non-controlling interest in the consolidated income statement for 2019 if Minor reports net income of $280,000 for 2019?
Assume that Company A agreed to pay 6 month LIBOR and to receive fixed interest rate 8% per annum (with interest payable every six months) from nominal value of 100 mln USD. The Swap contract is for 1,5 year. Fixed interest rates are 6, 12 and 18 months are: 10%, 12 % and 14%. The 6 month LIBOR is currently 11 %. Calculate the value of this swap for Company A.
Exerc In July 2008, fearing further appreciation of the zloty, you bought a 3-month put option for 100,000 USD at 2 PLN/USD, paying premium 10 groszys for 1 USD. To cover the significant costs of this option, you wrote 3 month USD call options at 2 PLN/USD receiving premium 2 groszys for 1 USD. Draw your profit/loss profile What will be your profit/loss if the exchange rate in 3 months is 4 PLN/USD
You are evaluating a project that costs $74,000 today. The project has an inflow of $158,000 in one year and an outflow of $64,000 in two years. What are the IRRS for the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) IRR Smallest Largest What discount rate results in the maximum NPV for this project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR %
EXERCISE 1 Two companies can borrow in the FX markets on the following terms: Company A Company B Fixed USD Treasuries 60 Treasuries 180 Floating GBP LIBOR 15 LIBOR 160 The spot rate is GBP/USD 1,50. The two companies engage in a two year swap on a notional principal of 100 mln GBP using the services of a swap bank. Company A takes 60% of the arbitrage gain, Company B 24% and the swap bank – 16%. Show how the swap works and calculate the payments made by the two companies if the yields on Treasuries is 7% and LIBOR is 5% in year 1 and 5,5% in year 2
Exodus Limousine Company has $1,000 par value bonds outstanding at 17 percent interest. The bonds will mature in 40 years. Use Appendix B and Appendix Difor an approximate answer but calculate your final answer using the formula and financial calculator methods. m Compute the current price of the bonds if the percent yield to maturity is: (Do not round intermediate calculations. Round your final answers to 2 decimal places. Assume interest payments are annual.) Bond Price Book 6 percent a. b. 10 percent Hint Print References Appendlx B Present value of $1, PV PV- FV 1 Percent Perlod 1% 2% 3% 4% 5% 6% 7% 8 % 9 % 10% 11% 12% 0.990 0.980 0.971 0.962 0952 0.943 0.935 0.926 0.917 0.909 0.901 0893 0.980 0.961 0.943 0.925 0907 0.890 0.873 0 857 0.842 0826 0.812 0797 0971 0.942 0.915 0.889 0864 0.840 0.816 0.794 0772 0751 0731 0.712 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 w…. 0.735 0.708 0.683 0.659 0.636 5 0.951 0.906 0.863 0.822 0784 0747 0.713 0.681 0.650 0.621 0593 0.567 0.942 0,888 0.837 0.790 0746 0.705 0,666 0630 0596 0.564 0535 0.507 7.. 0.933 0.871 0.813 0.760 0711 0.665 0.623 0.583 0.547 0.513 0.482 0.452 0.923 0853 0.789 0.731 0.677 0.627 0.582 0.502 0.540 0467 0.434 0.404 0.914 0.837 0.766 0.703 0.500 0361 0.645 0.592 0.544 0460 0.424 0.391 10 0.905 0820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 0.352 0.322 0.896 15 0.804 0.722 0.650 0585 0.527 0.475 0.429 0.388 0.350 0317 0287 12 0.887 0.788 0.701 0.625 0557 0.497 0.444 0.397 0.356 0.319 0.286 0.257 13 0.879 0.773 0.681 0.601 0530 0.469 0.415 0.368 0.326 0.290 0.258 0229 14 0.870 0.758 0.661 0.388 0.577 0505 0.442 0.340 0.299 0.263 0.232 0.205 15 0.861 0.743 0.642 0.555 0481 0.417 0.362 0.315 0.275 0.239 0.209 0.183 16 0.853 0.728 0.623 0.534 0.458 0.394 0.339 0.292 0.252 0218 0.188 0.163 17 0844 0.714 0.605 0.513 0.436 0.371 0.317 0.270 0231 0.198 0.170 0.146 18 0.700 O.587 0494 0416 0.350 0.250 O836 0.206 0212 0.180 0.153 0.130 0.686 0.570 0475 0.396 0331 0277 0.232 0.194 0.164 0.138 0.116 19 0828 0.377 0.312 0.258 0215 0.178 20 0820 0.673 0.554 0.456 0.149 0.124 0.104 0780 0478 0375 0.295 0.233 0.184 0.146 0092 0.059 25 0.610 0.116 0.074 0.231 0.174 0.131 0.099 0.075 0057 0044 0.033 0.742 0.552 0412 0.308 30 0.067 40 0.307 0.208 0.142 0.097 0.046 0.032 0022 0015 0011 0.672 0.453 0.087 0.054 0.034 0.021 0013 0009 0005 0.003 0.372 0.228 0.141 50 0.608 Appendlx D Present value of an annulty of $1, PVE PV A 1- (1 Percent Pertod 1% 2% 3% 4% 6 % 5% 7% 8% 9% 10 % 11% 12% 0.990 0.980 0.971 0962 0.952 0.943 0.935 0.926 0.917 0.909 0.901 0.893 1,970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 1.713 1.690 3 2.941 2.884 2.829 2.775 2.723 2.673 2.624 2.577 2.531 2.487 2.444 2.402 4 3.902 3.808 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.102 3.037 5 4.853 4.713 4.580 4.452 4.329 4.212 4.100 3.993 3.890 3.791 3.696 3.605 5.795 5.601 5.417 5.242 5.076 4.917 4.767 4,623 4.486 4.355 4.231 4.111 T 6.728 6.472 6.230 6.002 5.786 5.582 5.389 5.206 5.033 4.868 4712 4.564 7.652 7.325 7.020 6.733 6.463 6.210 5971 4968 5.747 5.535 5.335 5.146 C 8.566 8.162 7.786 7.435 7.108 6.802 6.515 6.247 5.995 5.759 5537 5.328 10 9.471 8.983 8.530 8.111 7.722 7.360 7.024 6.710 6.418 6.145 5.889 5.650 11 10.368 9.787 9.253 8.760 8.306 7.887 7.499 7.139 6.805 6.495 6.207 5938 12 11.255 10.575 9.954 9.385 8.863 8.384 7.943 7.536 7.161 6.814 6.492 6.194 12 12.134 11.348 10.635 9.986 9.394 8.853 8.358 7.904 7.487 7.103 6.750 6.424 14 13.004 12.106 11.296 10.563 9.809 9.295 8.745 8.244 7.786 7.367 6.982 6628 15 13.865 12.849 11.938 11.118 10.380 9712 9.108 8.559 8.061 7.606 7.191 6.811 14.718 16 13.578 12.561 11.652 10.838 10.106 9.447 8.851 8.313 7.824 7.379 6.974 17 15.562 14.292 13.166 12.166 11.274 10.477 ww 18 9.763 9.122 8.544 8.022 7.549 7.120 16.398 14.092 13.754 12.650 11.600 10.828 10.059 9.372 8.756 8.201 7.702 7.250 19 17.226 15.678 14.324 13.134 12.085 11.158 10.336 9.604 8.950 8.365 7.839 7.366 20 18.046 16.351 14.877 13.590 12.462 11.470 10.504 9.818 9.129 8.514 7.963 7.469 25 22.023 19.523 17.413 15.622 14.094 12.783 11.654 10.675 9.823 9.077 8422 7.843 30 25.808 22.396 19.600 17.292 15.372 13.765 12.409 11.258 10.274 9.427 8.604 8.055 40 23.115 32.835 19.793 17.159 27.355 15.046 13.332 11.925 10.757 9.779 8951 8.244 39.196 31.424 25.730 21.482 18.256 15.762 13.801 12.233 10.962 9.915 9.042 8.304
3. An Australian investment advisor has conducted a meeting with high net worth individuals and noted that they have a high risk appetite and are seeking highest return for every dollar invested. The high net worth individuals are successful business magnates and celebrity singers and actors. The following Table A shows the asset allocation and the expected returns for each asset class: Table A Equities Property 0.3 Bond Fund X 0.6 0.1 Fund Y 0.6 0.2 0.2 Fund Z 0.3 0.3 0.4 Asset Returns 0.0314 0.0762 0.01235 The variance-covariance of the three assets is given as the Table B below: Table B Bond Equities Property -0.001 Bond 0.0024 0.0005 0.00561 Equities Property0.0005 -0.001 0.0297 0.00561 0.0279 3.1) Use a matrix to present asset allocations of fund X, Y and Z, asset returns, and a matrix to present variance-covariance. Call them A, R, and B, if you wish 3.2) Select the appropriate Fund for the high net worth clients. 3.3) Derive the standard deviation of Fund X, Y and Z respectively. Please provide a short interpretation of not more than 100 words on the relative riskiness for suggesting the chosen fund to the client, based on the above matrices 3.4) Suppose that only fund X, Y and Z are available for investors in the market. An investor desires a portfolio as follows: a vector to present Bond EquityProperty Proportions 0.3 0.4 0.3 Denote the desired portfolio as d. Present d as a column vector, and construct the desired portfolio from funds available in the market.
Refer to Table 10-1, assume interest rates in the market (yield to maturity) are 9 percent for 20 years on a bond paying 10 percent a. What is the price of the bond? Bond price b. Assume 15 years have passed and interest rates in the market have gone up to 12 percent. Now, using Table 10-2 for 5 years, what is the price of the bond? Bond price nces c. What would your percentage return be if you bought the bonds when interest rates in the market were 9 percent for 20 years and sold them 15 years later when interest rates were 12 percent? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Retun on investment Table 10-1 Bond price table (10% Interest Payment, 20 Years to Maturity) PV of PV of Yield to Bond Price Principal Coupons Maturity $2,308.11 $672.97 $1,635.14 2% 1,815.42 456.39 1,359.03 4% 1,458.80 1,146.99 311.80 6% 1,317.82 258.42 1,059.40 7% 1,196.36 214.55 8% 981.81 1,091.29 178.43 9% 912.85 1,000.00 148.64 10% 851.36 920.37 124.03 11% 796.33 850.61 746.94 103.67 12% 789.26 702.48 86.78 13% 735.07 72.76 14% 662.31 644.27 51.39 592.88 16% 26.08 513.04 20% 486.96 11.53 406.92 25% 395.39 Impact of time to maturity on bond prices Table 10-2 (10% Interest Payment, Various Times to Maturity) Time Period in Bond Price with 8% Bond Price with 12% Yield to Maturity Years to Maturity Yield to Maturity $1,000.00 $1,000.00 1 1,018.52 982.14 1,079.85 927.90 10 887.00 1,134.20 863.78 1,171.19 20 850.61 1,196.36 843.14 25 1,213.50 30 838.90 1,225.16 OF584
Seved Heather Smith is considering a bond investment in Locklear Airlines. The $1,000 par value bonds have a quoted annual interest rate of 7 percent and the interest is paid semiannually. The yield to maturity on the bonds is 10 percent annual interest. There are 10 years to maturity. Compute the price of the bonds based on semiannual analysis. Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answer to 2 decimal places.) Bond price nces
Get college assignment help at uniessay writers The Ellis Corporation has heavy lease commitments. Prior to SFAS No. 13, it merely footnoted lease obligations in the balance sheet, which appeared as follows: Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods In $ millions In $ millions $ 85 $ 10 70 $ 80 Current assets Fixed assets Current liabilities Long-term liabilities Total liabilities 85 Stockholders’ equity 90 $ 170 $ 170 Total liabilities and stockholders’ equity Total assets The footnotes stated that the company had $17 million in annual capital lease obligations for the next 20 years. a. Discount these annual lease obligations back to the present at a 6 percent discount rate. (Do not round intermediate calculations. Round your answer to the nearest million. Input your answer in millions of dollars (e.g., $6,100,000 should be input as “6”).) PV of lease obligations million b. Construct a revised balance sheet that includes lease obligations. (Do not round intermediate calculations. Round your answers to the nearest million. Input your answer in millions of dollars (e.g., $6,100,000 should be input as “6”).) Balance Sheet (in $ millions) Current liabilities Long-term liabilities Current assets Fixed assets Leased property under capital lease Obligations under capital lease Total liabilities 0 Stockholders’ equity 0 Total liabilities and Stockholders’ equity 0 Total assets c. Compute the total debt to total asset ratio for the original and revised balance sheets. (Input your answers as a percent rounded to 2 decimal places.) % Original Revised
5. A US MNC has two cash flows. The first is a net cash inflow in the yen and the other is a net cash outflow in the peso. Assume the two currencies are positively correlated with the US dollar. Which of the following statements is correct? a) This firm has a relatively high level of transaction exposure b) This firm will not be impacted by exchange rate changes because both currencies will move in the same direction c) This firm will not be impacted by exchange rate changes because both currencies will move in the opposite direction d) This firm will benefit from an offsetting effect if the yen and the peso strengthen against the US dollar e) None of the above is correct
22) Which of the following statements is false? A) If the CAPM correctly computes the risk premium, investors would stop investing only when they expected the alpha of an investment strategy to be negative. B) If the CAPM correctly computes the risk premium, an investment opportunity with a positive alpha is a positive NPV investment opportunity. C) If the CAPM correctly computes the risk premium, investors should flock to invest in positive alpha stocks. D) Anyone can implement a momentum trading strategy and therefore generate a positive investment opportunity
9. Which of the following statements is FALSE? A) In general, the gain to investors from the tax deductibility of interest payments is referred to as the interest tax shield. B) The interest tax shield is the additional amount that a firm would have paid in taxes if it did not have leverage C) Because Corporations pay taxes on their profits after interest payments are deducted, interest expenses reduce the amount of corporate tax firms must pay. D) As Modigliani and Miller made clear in their original work, capital structure matters in perfect capital markets. Thus, if capital structure does not matter, then it must stem from a market imperfection.
Office Automation, Inc., must choose between two copiers, the XX40 or the RH45. The XX40 costs $2,.400 and will last for 5 years. The copier will require a real aftertax cost of $270 per year after all relevant expenses. The RH45 costs $2,900 and will last 7 years. The real aftertax cost for the RH45 will be $245 per year. All cash flows occur at the end of the year. The inflation rate is expected to be 6 percent per year, and the nominal discount rate is 12 percent. Calculate the EAC for each copier. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) EAC XX40 RH45 Which copier should the company choose? XX40 RH45
TuNi Asent KA L2O1529143S 第二学期 试卷(共3页) Name Student ID Course Public Finance class 題序 it Part I Definition (20 points) 1. Loading Fee 2. Adverse selection 3. Moral Hazard 4. Second Fundamental Theorem of Welfare Economics S. Negative Externality Part II True or False (10 points) 11. Larger communities tend to consume greater quantities of a nonrival good than smaller communities marginal rate of substitution, then the allocation of resources is 2. If everyone has the same Pareto efficient. 3. A policy change increases social welfare if, and only if, it represents a Pareto improvement 4. A reallocation from a point within the utility possibilities curve to a point on the utility possibilities curve results in a Pareto improvement. 5. A farmer who grows organic con is at risk of having his crop contaminated by genetically modified corm grown by hiss neighbors. According to Coase Theorem, the farmer can negotiate with his neighbor to prevent this situation happening. 6. In partial equilibrium competitive models, tax incidence depends on the elasticities of supply and demand 7. An externality occurs when the activity of one person affects another person outside the market mechanism. 8. Public goods be provided privately, and private goods can be provided publicly. can 9.A cap-and-trade system grants permits to pollute, but allows the permits to be traded 10. Broadly speaking, Social Security redistributes incomes from high- to low-income individuals, from men to women, and from young to old. One-earner marri
Technology changes quickly and yet has a large impact on our lives. Recently, Rachel was busy chatting with her friends yia text message when her mom was trying to also have a comversation with her. Afterward, they had a discussion about what is an appropriate number of texts to send each day. Since they could not Pgree, they decided to collect data on the number of texts people send on any given day. They each asked 24 of their friends the following question: “What is the average number of texts you SEND each day The data and histogram representing all 48 responses are shown below: (0 2, 3, 3, 5, 5, 5, 5, 5, 5.5, 6, 6, 6, 10, 12, 13, 15, 15, 16, 20, 25, 35, 36, 70, 80, 85,, 110, 130, 137, 138, 138, 140, 142, 143, 145, 150, 150, 150, 150, 150, 150, 150, 155, 162, 164, 165, 175, 275) Part A 1 What conclusions might be made based on the histogram above? on ts Bepresent the same data by creating a box plot above the histogram, 3 What story does the box plot tell? Describe the pros and cons of each representation (histogram and box plot). In other words, what information does each representation highlight? What information does each representation hide or obscure? Page | 13 Pert Prior to talking aboyt the data with her mom, Rachel had created a box plot using her owm data she collected and it lpoked quite different than when they combined their data. Average number of texts sent each day 4 Describe the data Rachel collected from her friends. What does this information tell you? 5. Compare the two box plots (Rachel’s data vs all data). 6 Rachel wants to continue sending her normal number of texts (average of 100 per day) and her mom would like her to decrease this by half. Present an argument for each side, using mathematics to justify each person’s request Page | 14
Ql (25pts) Mr Bean owns a portfolio with the following characteristics: Ar
4. A mining company is considering buying or renting a drill rig The cost data for owning the asset are as follows. Purchase price, $24,000; service life, 4 years, salvage value, $1,800; fixed operating costs, $9 200 per year variable costs. $120 for each day the rig is used. The total cost of hiring the rig is $225 per day With the money worth 14.7 %, determine the minimum number of days per year the rig must be needed to justify its purchase (10 A mining company is evaluating the economics of installing a new.compressor that costs US$250,000 to satisfy gas compression requirements for the mine and save 160.000 litres of diesel per year compared to the present operating costs. The saved fuel is currently being purchased at $1.00 per liter and compressor life is estimated to be 10 years with zero salvage value. Assume compressor maintenance costs will be exactly offset by increased sales revenues due to increased gas production to other compressors on the mine The effective income tax rate is 50% and minimum hurdle rate = 12% after tax Use the Discounted Cash flow rate of return (DCFROR) and NPV analysis to determine if it is economical to buy the new compressor (15)
Of the following production functions, which exhibit increasing, constant, or decreasing returns to scale? The production function F(K, L) KL exhibits increasing returns to scale. The production function F(K, L)= 20K 5L exhibits constant returns to scale The production function F(K, L) = (KL)0.5 exhibits returns to scale
Sample Final eampdt0 View Course Portfolio No Side 1Ttle fFacebook E-Leaming Moodle | Ge x e-learning.gju.edujo/pluginfile.php/142960/mod resource/content/1/Sample % 20Final-exam.pdf Dropbox-Sketchy. HLS OneDrive Minutes prr unit Process 2 Unit Price (S) Process 3 Product Process 1 4.5 10 6 S.0 10 12 6 4.0 3 The LP model of the problem and its optimal tableau are given below : number of units produced of product i, where i 1, 2, 3 Max Z 4.5x, Sx 4x, S.t. 5x, 6x, 5 600 6x 8x 9×600 8x 10x 12x, 600 X 20 10x.4 Solution Basic x 325 0.458 0083 50 -0.083 0.167 140 0.833 0.067 0.6 C 20 0.167 -0.133 1.2 0 1. Determine the optimal solution values, and its objective value 2. Determine the shadow prices for the three constraints, and their allowable increase and decrease ranges 3. Determine the reduced cost values, and the objective function coefficients ranges. Activate Wing Go to Settings to di DELL
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