Venture capital. It’s where capitalism comes in homie
Answer:
Total FV= $5,080.86
Explanation:
Giving the following information:
Cash Flow:
Cf1= $865
Cf2= $1,040
Cf3= $1,290
Cf4= $1,385
Discount rate (i)= 8%
<u>To calculate the total future value, we need to apply the following formula to each cash flow:</u>
FV= Cf*(1+i)^n
Cf1= 865*1.08^3= 1,089.65
Cf2= 1,040*1.08^2= 1,213.01
Cf3= 1,290*1.08= 1,393.2
Cf4= 1,385
Total FV= $5,080.86
Answer:
Put Price = $4
Explanation:
We are applying Put Call Parity Theorem. Future Price + Put Price = Call Price + Strike Price
$30 + Put Price = $4 + $30
Put Price = $4 + $30 - $30
Put Price = $4
Thus, the price of six month put option = $4
Answer:
For recording the reduction in value the Journal entry is shown below:-
Explanation:
The Journal entry is shown below:-
Impairment Loss Dr, $11,70
To Debt Investment $11,70
(Being the reduction in value is recorded)
Therefore, Impairment loss is an loss and we already know that all the expenses and losses are debited and investment is an asset that shows the decrements hence it is credited.
Working note :-
Impairment loss = Carrying value - Decrease in value
= $76,700 - $65,000
= $11,700
Answer:
the firm expected rate of return is 20.4%
Explanation:
The computation of the expected rate of return is shown below:
= Respective Probabilities × respective returns
= 0.50 × 0.46 + 0.30 × 0.10 + 0.20 × -0.28
= 0.23 + 0.03 - 0.056
= 0.204
= 20.4%
hence, the firm expected rate of return is 20.4%
We simply applied the above formula so that the correct value could come
And, the same is to be considered
