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You expect to receive $11,000 at graduation in two years. You plan on investing at 12 percent until you have $97,000. How long will you wait from now? (Do not round the intermediate calculations)? 1
In addition, your grandfather just gave you a $25,000 graduation gift which you will deposit immediately (t = 0). If the account earns 9% compounded annually, how much will you have when you start y
Is there an easily identifiable debt-equity ratio that will maximize the value of affirm? Why or Why not?
Suppose that a firm wishes to maintain a capital structure that is consistent with an A senior debt rating. Under what circumstances would the firm maintain a lower degree of leverage than a cross s
The firm feels that the project is riskier than the company as a whole and that it should use an adjustment factor of + 3 percent. What is the WACC it should use for the project?
The H.R. picket corp has 500,000 of debt outstanding, and it pays an annual interest rate of 10%. Its annual sales are 2 million, its average tax rate is 30% and its profit margin is 5%. what is the
What is the present value of your windfall if the appropriate discount rate is 9 percent?
What is the difference in the effective annual rates charged by the two banks?
Assume that the only service performed is the giving of tattoos, whose unit price is $12. Find the contribution margin per tattoo.
The firm also estimates the project will require an additional 7000 a year in current assets for each one of the four years of the project. How much net working capital will the firm recapture?
To offset your overhead, you want to charge your customers an EAR (or EFF%) that is 2% more than the bank is charging you. What APR rate should you charge your customers?
Expected cash dividends are $2.50, the dividend yield is 6%, flotation costs are 4% of price, and the growth rate is 3%. Compute cost of new common stock.
you(and the market) have expectations that in 5 years the YTM on a 15 year bond with similar risks will be 8.5%. How much should you be willing to pay for bond x today?
How much money do you need to put in a money market fund today earning a nominal 6% a year to fund your literature expenses a) forever and b) for the next 6 years?
A city has two alternatives for improving its sewage system. Use a 4% cost of money, which is conservative for a municipality.
Tom is planning to invest the following amount at 4percent interest. how much money will he have saved at the end of year 3?
A credit card issuer offers an APR of 13.64% and compounds interest daily. Which is it most likely to advertise, its APR or its effective interest rate?
The minimum monthly payment for Conrad's credit card is 2% of his balance or $20, whichever is higher. If Conrad's balance at the end of his last billing cycle was $760, what is his minimum monthly
Sophia's credit card has an APR of 20.87%, and it just changed its compounding period from monthly to daily. What will happen to the effective interest rate charged to Sophia?
A credit card had an APR of 15.21% all of last year and compounded interest daily. What was the credit card's effective interest rate last year?
If interest rates suddenly rise by 2 percent, what is the percentage change in the price of Bond Sam? Of Bond Dave? Illustrate your answers by graphing bond prices versus YTM.
EMC Corporation has never paid a dividend. Its current free cash flow of $400,000 is expected to grow at a constant rate of 5%. The weighted average cost of capital is WACC = 12%. Calculate EMC's va
This means that if the invoice is paid within 10 days, a 2 percent discount can be taken; if not, the net invoice is due within 30 days. Which supply source should you select?
You were hired to advise the firm on the best procedure. If the wrong decision criterion is used, how much potential value would the firm lose?
What is the new yield to maturity for each bond in the table?