1) Orange Valley Industrial just bought supplies from Red Royal Aviation. Orange Valley Industrial has been offered the 3 possible payment options described in the table. If the discount rate is 11.95 percent, which of the assertions is true? Option Terms of payment (amount and timing) from Orange Valley Industrial to Red Royal Aviation A 20,739 dollars in 1 year(s) B 32,735 dollars in 5 years C 50,958 dollars in 9 years Orange Valley Industrial should prefer option B more than option A, and Orange Valley Industrial should prefer option A more than option C Orange Valley Industrial should prefer option B more than option A, and Orange Valley Industrial should prefer option C more than option A Orange Valley Industrial should prefer option A more than option B, and Orange Valley Industrial should prefer option C more than option A Orange Valley Industrial should prefer option A more than option B, and Orange Valley Industrial should prefer option A more than option C 2) 2 year(s) ago, Jabari invested 22,226 dollars. He has earned and will earn 5.71 percent per year in compound interest. If Mary invests 20,092 dollars in 1 year(s) from today and earns simple interest, then how much simple interest per year must Mary earn to have the same amount of money in 8 years from today as Jabari will have in 8 years from today? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098. 3) For each of the 4 investments described in the table, the investor would pay 1,200 dollars today to purchase the investment. Each investment would have the annual return noted in the table and each investment would make a single, lump sum payment to the investor in the number of years from today noted in the table. If RC > RD and TL > TP, then which assertion is true? All annual returns and numbers of years from today when the single, lump sum payment will be made are greater than zero. Investment Annual return Number of years from today when the single, lump sum payment will be made C RC T D RD T L R TL P R TP Investment C will make a larger single, lump sum payment in T years than investment D will make in T years, and investment P will make a larger single, lump sum payment in TP years than investment L will make in TL years Investment C will make a larger single, lump sum payment in T years than investment D will make in T years, and investment L will make a larger single, lump sum payment in TL years than investment P will make in TP years Investment D will make a larger single, lump sum payment in T years than investment C will make in T years, and investment P will make a larger single, lump sum payment in TP years than investment L will make in TL years Investment D will make a larger single, lump sum payment in T years than investment C will make in T years, and investment L will make a larger single, lump sum payment in TL years than investment P will make in TP years

Anthony Is A New Investor And Has Been Closely Watching A Company By The

Anthony is a new investor and has been closely watching a company by the name of CLS Ltd., a pharmaceutical company aiming to develop a coronavirus vaccine. Anthony believes the following returns are possible in 2020 and has attached a probability to each potential outcome: Probability Possible Return .20 230.00% .30 100.00% .30 5.00% .20 -100.00% a) Calculate the Expected Return for CLS Ltd. in 2020. (2 marks) Show formula, calculation and a concluding statement in your response. b) Calculate the Risk (Standard Deviation) for CLS Ltd. in 2020. (3 marks) Show formula, calculation and a concluding statement in your response. c) Anthony is considering investing all his savings in buying shares in CLS Ltd. Explain to Anthony why he should not do this by referring to the risk/return trade-off. What action can Anthony take to reduce some of the risk? (3 marks) d) Explain what the standard deviation actually measures in Finance. Include in your answer an explanation of what a high and low value for the standard deviation means. (2 marks)

In 2016 Cristiana Purchased A 10-year, 3.20% P.a. Semi-annual Paying Coupon Bond With A

In 2016 Cristiana purchased a 10-year, 3.20% p.a. semi-annual paying coupon bond with a Face Value (FV) of $2 000 000, as she was attracted by the fixed income stream in order to fund her retirement expenses. a) What is the price of this bond in 2020 (6 years remaining) at a current market interest rate of 0.30% p.a.? (3 marks) Show formula, variables, calculation and a concluding statement in your response. b) Is Cristiana’s coupon bond currently selling at a premium, par or discount? Describe the relationship between bond prices and interest rates. (2 marks) c) Cristiana decided to sell the bond from part a) and is considering her investment options. A friend suggested that she invests the proceeds by buying a short-term debt instrument. Explain two advantages of short-term debt instruments. (2 marks) d) Warren, a Wall street portfolio manager, informed Cristiana that she should consider investing in his portfolio instead. He said his portfolio is perfect for someone who is looking to retire within the next 6 MONTHS . His portfolio has the following allocation of assets: Asset Class Allocation Shares in Small Companies (High Risk) 0% Shares in Blue Chip Companies (Low Risk) 20% Bonds 50% Cash 30% Does Warren have a point? Why or why not? (3 marks)

Please Use The Problem Statement Data Here For Questions 1 Through 4. It’s The

Transcribed Image Text from this QuestionPlease use the problem statement data here for Questions 1 through 4. It’s the start of 2020. For the year just ended, a firm had revenue of $2 billion, EBIT of $300 million, depreciation of $80 million and capital expenditures of $90 million. Net working capital is 10% of revenue. The tax rate is 20%. The firm has 100 million shares of equity priced at $50 per share. The firm also has $1.5 billion in debt on the balance sheet, trading at 110% of book value, yielding 5%. Treasurys yield 2%, the market risk premium is 8% and the firm’s beta is 0.90. Starting in 2020, the firm will grow at 4% per year for the foreseeable future. 1. The free cash flow to the firm in 2020 is ? (a) $247.2 million $231.2 million $31.2 million $426.2 million

Alice Walter Has Never Invested In Shares Before. She Has Come To You, As

Finance Assignment Writing ServiceAlice Walter has never invested in shares before. She has come to you, as a prospective finance graduate, for some advice. In your conversations with Alice, you have determined her Required Rate of Return (RRR) to be 8.25%. a) Determine the value of a share in BBB Ltd. if they paid a dividend of $0.5 this year and the dividend is expected to grow by 4.5% indefinitely. (2 marks) Show formula, variables, calculation and a concluding statement in your response. b) Determine the value of a share in CCC Ltd. if in the current year they paid a dividend of $0.75 and this is not expected to change into the foreseeable future. (2 marks) Show formula, variables, calculation and a concluding statement in your response. c) If the market price for each share in parts a) and b) is $10 per share, should Alice buy either or both shares? Justify your answer. (2 marks) d) Alice decided to buy 100 000 shares in GGG Ltd., giving her 1.5% ownership in the company (GGG Ltd. currently has 15 000 000 issued shares). One year later, GGG Ltd. announces a private placement of a further 10,000,000 shares, in order to raise funds for their new venture: Project COVID. (i) Describe two features of a private placement of shares. (1 mark) (ii) What is the major disadvantage to Alice of the above private placement? Include in your answer the effect on her ownership. (1 mark) (iii) Identify one other source of equity funding Alice, as a shareholder, would prefer. Justify your choice. (2 marks)

IB Attempt 1/10 For 10 Pts. Part 1 What Is The Approximate Real Rate

Transcribed Image Text from this QuestionIB Attempt 1/10 for 10 pts. Part 1 What is the approximate real rate of interest rate? 0.0245 Correct rR i r: nominal interest rate R: real interest rate i: expected inflation rate R-r-i = 0.047 -0.022 = 0.025 I – Attempt 1/10 for 10 pts. Part 2 What is the exact real rate of interest rate? A decimals Submit

1. 9.86/14.24；higher/lower; Less/more 2. Higher/lower; Higher/lower 3. 2.86x/8.01x/1.09x/31.61x; 31.61/1.09/2.86/8.01; Higher/lower; Higher/lower

Transcribed Image Text from this QuestionAsset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio Consider the following case: Polk Software Inc. has a quick ratio of 2.00x, $26,100 in cash, $14,500 in accounts receivable, some inventory, total current assets of $58,000, and total current liabilities of $20,300. The company reported annual sales of $500,000 in the most recent annual report. Over the past year, how often did Polk Software Inc. sell and replace its inventory? 2.86x 8.01x 28.74x 31.61x The inventory turnover ratio across companies in the software industry is 24.429x. Based on this information, which of the following statements is true for Polk Software Inc.? Polk Software Inc. is holding less inventory per dollar of sales compared with the industry average. O Polk Software Inc. is holding more inventory per dollar of sales compared with the industry average. You are analyzing two companies that manufacture electronic toys-Like Games Inc. and Our Play Inc. Like Games was launched eight years ago, whereas Our Play is a relatively new company that has been in operation for only the past two years. However, both companies have an equal market share with sales of $500,000 each. You’ve collected company data to compare Like Games and Our Play. Last year, the average sales for all industry competitors was $1,275,000. As an analyst, you want to make comments on the expected performance of these two companies in the coming year. You’ve collected data from the companies’ financial statements. This information is listed as follows: (Note: Assume there are 365 days in a year.) Data Collected (in dollars) Like Games Our Play Industry Average 19,250 Accounts receivable 13,500 19,500 Net fixed assets 275,000 1,083,750 400,000 625,000 Total assets 475,000 1,173,000 Using this information, complete the following statements to include in your analysis. 1. Our Play has days of sales tied up in receivables, which is much than the industry average. It takes Our Play time to collect cash from its customers than it takes Like Games. 2. Like Games’s fixed assets turnover ratio is than that of Our Play. This is because Like Games was formed eight years ago, so the acquisition cost of its fixed assets is recorded at historic values when the company bought its assets and has been depreciated since then. Assuming that fixed assets prices (not book values) rose over the past six years due to inflation, Our Play paid a amount for its fixed assets. 3. The average total assets turnover in the electronic toys industry is which means that of sales is being generated with every dollar of investment in assets. A total assets turnover ratio indicates greater efficiency. Both companies’ total assets turnover ratios are than the industry average.

Excel Online Structured Activity: Project Risk Analysis The Butler-Perkins Company (BPC) Must Decide Between

Transcribed Image Text from this QuestionExcel Online Structured Activity: Project risk analysis The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $6,750 and has an expected life of 3 years. Annual project cash flows begin 1 year after the initial investment and are subject to the following probability distributions: Project A Project B Probability Cash Flows Probability Cash Flows 0.2 $6,000 0.2 $0 0.6 $6,750 0.6 $6,750 0.2 $7,500 0.2 $17,000 BPC has decided to evaluate the riskier project at 11% and the less-risky project at 10%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. х Open spreadsheet a. What is each project’s expected annual cash flow? Round your answers to two decimal places. Project A: $ Project B: $ Project B’s standard deviation (OB) is $5,443.80 and its coefficient of variation (CVB) is 0.73. What are the values of (CA) and (CVA)? Round your answers to two decimal places. OA = $ CVA =

It’s The Start Of 2020. For The Year Just Ended, A Firm Had Revenue

Transcribed Image Text from this QuestionIt’s the start of 2020. For the year just ended, a firm had revenue of $2 billion, EBIT of $300 million, depreciation of $80 million and capital expenditures of $90 million. Net working capital is 10% of revenue. The tax rate is 20%. The firm has 100 million shares of equity priced at $50 per share. The firm also has $1.5 billion in debt on the balance sheet, trading at 110% of book value, yielding 5%. Treasurys yield 2%, the market risk premium is 8% and the firm’s beta is 0.90. Starting in 2020, the firm will grow at 4% per year for the foreseeable future. 3. What is the overall firm value? (a) (b) $5,780.00 million $6,149.94 million $5,913.04 million $4,446.15 million (d)

A Loan Of 1000 Is Being Repaid With Annual Payments Over 10 Years. The

Transcribed Image Text from this QuestionA loan of 1000 is being repaid with annual payments over 10 years. The payments in the last five years are 5 times the payments in the first 5 years. If i = 0.08, calculate the principal amortized (i.e. principal amount) in the fifth payment.

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