Q2(d). According to your research, the Market Capitalization Rate for this type of property should be 9.35%. Based on this information, what is the value of the property? Show you
Q: An investment had a nominal return of 11.8 percent last year. If the real return on the investment…
A: Nominal rate = 11.8% Real rate = 8.7%
Q: Suppose Firm 1 is 100% equity financed. Firm 1 has a project available that offers a 10% return on…
A: Required return for the firm is calculated using following equation Required rate of return = Risk…
Q: Ay 3. Commercial Banks and their financial statements with Off-balance sheet activities.
A: Off-balance sheet activities are those activities that are not reported on a company's balance…
Q: hy dating can be considered a method to solve the adverse selection problem a. You are preventing…
A: In finance the data is very important and having proper and adequate data is very important because…
Q: Calculate the Employment Insurance premium for an employee who works in Nova Scotia and has earnings…
A: Some amount is to be deducted from the annual salary of the employee for deduction against the…
Q: Which of the following are in keeping with Corporate Governance? a Shareholders own the…
A: Corporate governance is a set of systems on the back of which a company moves forward in a…
Q: Below is the top of the limit order book for Microsoft. An investor wants to buy 200 shares. What…
A: Bid price is the price at which investor wants to purchase the shares and ask price is the price at…
Q: Use simple interest to calculate the cash price of the following bond: 5,000 USD, 8% bond with…
A: Cash price of bonds = Face value of bonds * Purchase price (%)
Q: You have the opportunity to make a one-time sale if you will give a new customer 30days to pay. You…
A: The giving credit to the customers is very risky because there would cost of credit and also there…
Q: A firm wants a sustainable growth rate of 3.38 percent while maintaining a dividend payout ratio of…
A: Formulae to be used:- Capital Intensity Ratio = 1 / Total Asset Turnover Sustainable Growth Rate =…
Q: Choose minimum of 5 ETFs or index funds. Justify your selection, apply the same analysis and…
A: 1. SPDR S&P 500 ETFTrust 2. iShares Core S&P 500 ETF 3.…
Q: Which one of the following elements of credit risk does not comprise Standalone Risk Default…
A: Standalone risk is the creation of risk by the specified division, project, or asset. It can be…
Q: You bought a call option at strike $ 60 for a price of $ 6 and sold a put option at strike $ 70 for…
A: We have a long position in call option and a short position in the put option. We need to find the…
Q: you
A: Rf = risk-free rate of return= 4%, Rm- Market return= 13%, B, Beta= 1.3 Given E=18%, And R = Rf +B…
Q: Which of the following is true? O An American call on a non-dividend paying stock will be worth more…
A: The call options gives you opportunity to buy the stock on maturity but no obligations to do that by…
Q: that the capital asset pricing model (CAPM) applies. The risk premium of a stock is 3 percent and…
A: Covariance is one of the most used statistical measures used in finance and it shows the…
Q: You are analyzing a stock which is currently being traded at Rs. 150.0 in anticipation of its…
A: We know the stock price. We need to find the implied long term growth rate built in the stock price.
Q: Workman Software has 9.8 percent coupon bonds on the market with 10 years to maturity. The bonds…
A: Bond ytm refers to the discount rate or the return earned if bond is held till it matures. Current…
Q: Jack's Construction Co has 100,000 bonds outstanding that are selling at par value. The bonds yield…
A: In the given case, the treasury bill yield is given , it is a risk free rate. Beta of the stock and…
Q: 44. If an ammonia plant that produces 250 tons per year cost P120 million to construct 8 years ago,…
A: We have the cost available for earlier construction. We need to find the cost today for a higher…
Q: 1. various forms of business organization. Ways of managing a business organization. Overview of…
A: Corporate finance involves the financial decisions, strategies, and activities of an organization.…
Q: Mf2. Assume a one-period binomial model in which the initial stock price is S = 60 and in each…
A: u = 7 /3 or down by a factor of d = 2 /3 ((1+r)-d)/U- d 1+1/3-2/3/7/3-2/3 =0.4 1-0.4=0.6 Strike…
Q: explain the the benifts of IFRS9
A: The international financial reporting standard 9 is generally specifying how a particular…
Q: The Dry Dock is considering a project with an initial cost of $108,915 and cash inflows for Years 1…
A: IRR of the project is calculated in excel using IRR function
Q: An investor is considering the development of a recreational complex with the following relevant…
A: We have the quantum and timing of all the cash flows emanating from a venture. We have to find the…
Q: marvel studios tied mngmt bonuses to divisions profits n revenyes to leverage on resources based…
A: The question being addressed is whether Marvel Studios has tied management bonuses to divisions…
Q: Corporate risk views the risk of a project as if it were held in isolation, whereas, stand-alone…
A: When doing the project it involves the risk but risk is different for different projects and it…
Q: would
A: Given interest = 3.75% Per annum,so quarterly = 3.75/4= 0.9375% So the annualised return…
Q: Consider the following cash flow table/diagram. The value of Y is $115. What is the value of X if…
A: Present worth is today's worth of future cash flow if discounted at a given rate of interest.…
Q: Assume that time today is Dec. 13, 2022. Determine what is being asked in each problem. 1. How much…
A: We have various time value of money based questions here. We need to find the missing variable in a…
Q: Pertinent information for two alternatives A and B is shown below. If i=10% / year and the effective…
A: The CFAT is cash flow after tax that cash flow available after doing payment for operating expenses…
Q: 3.You have the opportunity to make a one-time sale if you will give a new customer 30days to pay.…
A: We have to find if credit can be given to a customer or not, given there is a finite probability of…
Q: Stock in Jansen Industries has a beta of 1.2. The market risk premium is 5 percent, and T-bills are…
A:
Q: Bill is in the process of selling his house to Lisa. Which role best describes each party? Bill…
A: In real estate, a grantee is the recipient of the property, and the grantor is a person that…
Q: You observe a nine-month European call option with an exercise price of $115 on a stock that is…
A: We need to find the implied volatility on the option, all the relevant details for applying the…
Q: You buy a share of stock ABC, write a one-year call option with X = $25 (the call option is written…
A: We have to find the payoff of the portfolio of various positions in options and the stock.
Q: Regine agrees to settle a P100,000 loan borrowed from provident by making monthly salary deduction…
A: Present value of annuity Annuity is a series of equal payment at equal interval over a specified…
Q: The operating expenses of a manufacturer last month were $5,000.00. This amount was 55% of gross…
A: Operating expenses are those expenses that are incurred to run normal business operation. examples…
Q: Which of the following are common POSITIVE bank covenants? Indicate ALL that apply. Achieve a…
A: Positive bank covenant are the covenants meant for maintaining the financial health and well-being…
Q: (Holding-period dollar gain and return) Suppose you purchased 19 shares of Disney stock for $20.06…
A: a). Holding period dollar gain or loss for the shares sold is calculated as Holding period gain =…
Q: If $3000.00 is invested for seven years and seven months at 6% p.a. compounded quarterly, calculate…
A: The time value of money means today's money value is more than the value of money tomorrow. In the…
Q: unded to the
A: Annual Depreciation Expenses = (Cost of fixture- Salvage value )/ 4
Q: Consider a stock priced at $30 with a standard deviation of 0.3. The risk-free rate is 0.05. There…
A: Options A financial instrument whose value is based on the value of the underlying asset. Under an…
Q: Assume that time today is Dec. 13, 2022. Determine what is being asked in each problem. 1. Rhea has…
A: Present value refers to the money present today that is more worthful than the amount will receive…
Q: O negative O positive O vertical O zero Cannot be determined.
A: CAL stands for Capital Allocation Line. It is a combination of risk free security with multiple…
Q: puts, calls, and the underlying stock (or combination). For each investor, document the (1) name of…
A: You meet with two investors who have different expectations for stock CBD that can be addressed with…
Q: Mark and his partners have contracted to purchase the franchise rights, worth $123,000, to open and…
A: Future value is the value of the initial amount along with accumulated interest on the amount.
Q: According to Pease et al. which of the following are good reasons for using presentations? They can…
A: Data visualization or presentations provides us with a quick, clear understanding of the…
Q: TRUE OR FALSE 1. The effective rate of interest is the amount of money that one unit invested at…
A: The answers to the statement are below :
Q: * AFV IS 50,000* *annual rate is 9%* Build a calculator to solve for "t" In the column you should…
A: We need to derive an expression for the variable "t" in the time value of money equation showing the…
Step by step
Solved in 2 steps
- You have entered into an agreement for the purchase of land. The agreement specifies that you will take ownership of the land immediately. You have agreed to pay $50,000 today and another $50,000 in three years. Calculate the total cost of the land today, assuming a discount rate of (a) 5%, (b) 7 %, or (c) 9%. Note: Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places. (FV of $1, PV of $1, FVA of $1, and PVA of $1) a. b. C. Payment Amount $ 50,000 50,000 50,000 Interest Rate 7 5% 7% 9% Answer is complete but not entirely correct. Compounding Annually Annually Annually Period Due 3 years 3 years 3 years $ Total Cost of Land Today 93,121.25 X 90,816.30✔ 88,617.30You have entered into an agreement for the purchase of land. The agreement specifies that you will take ownership of the land immediately. You have agreed to pay $35,000 today and another $35,000 in three years. Calculate the total cost of the land today, assuming a discount rate of (a) 3%, (b) 5%, or (c) 7%. (FV of $1. PV of $1. FVA of $1, and PVA of $1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.) a. b. C Payment Amount $ 35,000 35,000 35,000 Interest Rate 3% 5% 7% Compounding Annually Annually Annually Period Due 3 years 3 years 3 years Total Cost of Land TodayYou have entered into an agreement for the purchase of land. The agreement specifies that you will take ownership of the land immediately. You have agreed to pay $51, 000 today and another $51,000 in three years. Calculate the total cost of the land today, assuming a discount rate of (a) 2%, (b) 4%, or (c) 6%.
- You are given the task to evaluate the value of a rental property. You identified similar properties and calculated average cap rate is 15%. You estimated the property's Net operating Income to be $570,000. What is the maximum price you would pay for the property? Group of answer choices $3.5 million $655,000 $3.8 million $5.7 millionYou have entered into an agreement for the purchase of land. The agreement specifies that you will take ownership of the land immediately. You have agreed to pay $55,000 today and another $55,000 in three years. Calculate the total cost of the land today, assuming a discount rate of (a) 3 %, (b) 5%, or (c) 7%. Note: Use tables, Excel, or a financial calculator. Do not round your intermediate values. Round your answers to 2 decimal places. (FV of $1. PV of $1. FVA of $1, and PVA of $1) Answer is complete but not entirely correct. Compounding Period Due Payment Interest Amount Total Cost of Rate Land Today a. $ 55,000 3% Annually 3 years S 155,573.62 b. 55,000 5% Annually 3 years 238,121.22 C. 55,000 7% Annually 3 3y years 296.410.920Assume you paid cash for a beach house in Florida a while back and that you are now wanting to sell it. You have two offers for the house as follows: 1. $500,000 paid immediately (spot market sale) 2. $520,000 paid 1 year from now (Forward sale) Here is a list of the annual cost/income considerations: ● Property tax: $5,000 Insurance: $3,000 HOA dues: $4,000 Maintenance: $3,000 Rental Income: $35,000 What is the fair value forward price from your perspective? Opportunity cost of not receiving the 500K today is the money-market rate of 5% = $25,000 for 1 year ● $535,000 $540,000 $505,000 $495,000 $520,000
- An owner can lease her building for $150,000 per year for three years. The explicit cost of maintaining the building is $50,000, and the implicit cost is $65,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 6 percent, determine the present value of the stream of: Instructions: Do not round intermediate calculations. Round your final calculation to two decimal places. a. Accounting profits. $ b. Economic profits. $An owner can lease her building for $160,000 per year for three years. The explicit cost of maintaining the building is $55,000, and the implicit cost is $70,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 5 percent, determine the present value of the stream of: Instructions: Do not round intermediate calculations. Round your final calculation to two decimal places. a. Accounting profits. $ b. Economic profits. $ Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.AD Construction, a property developer, is building a property complex consisting of 50 apartments. Apartments are similar in size and proportion - however, can be adapted to suit client needs. AD Construction enters into a contract with customer B. The client wants to buy an apartment and agrees to a total price of CU100,000 per apartment. The payment schedule is as follows: After signing the contract, clients pay a deposit of CU 10,000 each. Milestone: 1 year before the planned completion, AD Construction will send a progress report to the client and the client will have to pay CU 50,000 each. Completion: After construction is completed, the legal ownership of the apartment is transferred to the client and they pay the remaining amount of CU40,000 each. The assumed construction period is 2 years from the contract date. AD Construction has the right to withhold payment from any client in the event that that client fails to pay for the contract prior to its completion. The contract…
- AD Construction, a property developer, is building a property complex consisting of 50 apartments. Apartments are similar in size and proportion - however, can be adapted to suit client needs. AD Construction enters into a contract with customer A. The client wants to buy an apartment and agrees to a total price of CU100,000 per apartment. The payment schedule is as follows:- After signing the contract, clients pay a deposit of CU 10,000 each.- Milestone: 1 year before the planned completion, AD Construction will send a progress report to the client and the client will have to pay CU 50,000 each.- Completion: After construction is completed, the legal ownership of the apartment is transferred to the client and they pay the remaining amount of CU40,000 each. The assumed construction period is 2 years from the contract date. AD Construction has the right to withhold payment from any client in the event that that client fails to pay for the contract prior to its completion. There is no…What would be the total fire insurance premium for Best Hardware if their $625,000 building belongs in structural classification B? The contents are worth $250,000 and they received an area rating of 1. Use Table 19-4. Round your answer to the nearest cent. A. What is the annual premium for the building? B. What is the annual premium for the contents?A newly-built business property, containing space for a store and twooffices, can be purchased for P1, 200, 000. A prospective buyer estimatesthat during the next 10 years he can obtain annual rentals of at least P458,460 from the property and that the annual out-of-pocket disbursementswill not exceed P60, 000. He believes that he should be able to dispose ofthe property at the end of 10 years at not less than P700, 000. Annualtaxes and insurance will total 2.5% of the first cost.(a)Assume he has sufficient equity capital to purchase the property, andthat the average return he is obtaining from his capital is 20%. Wouldyou recommend the investment? Use ROR method.(b)What recommendation would you make if he had to borrow 25% ofthe required capital, on the basis of a 10-year amortization with interestof 18%? Use Annual Worth Method(c)If the entire capital can be obtained by floating bonds at 15% that willmature in 10 years, what would you recommend? Sinking fund interestis 15%. Use ROR…