Answer:
SF7.37
Explanation:
PV of cash flow is calculated using the formula
1-(1+r)^-n/r=1-(1-0.15)^5/0.15=1-(0.75)^5/0.15=1-0.237/0.15=5.085
So pv=5.085×4.4=SF
20.3385million
Using interest parity
1+ic/1+ib =Fo/So
Counter country is US while home country is in
swiss
1+0.05/1.04=fo/1.09
Fo=1.09×1.05/1.04=1.1
So expected PV=20.3385×1.1=SF22.37235million
Profit=23.37235-15=SF7.37
Answer:
e). all of the above
<u>Multiple-choices</u>
a). working capital
b). current ratio
c). quick ratio
e). all of the above
Explanation:
Working Capital is the difference between the total current asset and current liabilities. I.e., working capital = total current assents - total current liabilities. It is calculated to assess a company's ability to pay its current liabilities.
The Current Ratio is calculated using the formula below.
current ratio= total current assets / total current liabilities. It measures the company's ability to meet its current liabilities with its current assets.
Acid-test Ratio (Quick Ratio) evaluates a company's ability to meet its current liabilities using cash or cash equivalents only. It measures the ability to repay current debts without having to sell inventory.
Quick ratio or acid test is calculated as follows= (cash + short-term investments + receivables) / total current assets
D is the best choice for your answer
Answer:
YTM on bond B: 11.80%
Explanation:
Investmetn A is a perpetuity with a grow rate of 2.21% and required return of 11.49%
the present value is:
A=5549.568966
if Kyan holding value is 6,600 then the bond present value is:
6,600 - 5,549.57 = 1,050.43
Now we need to calcualte the YTM for bond B:
Coupon payment =1,000 x 12.66%/2 payment per year = $ 63.3
Face Value = 1000
Present value= 1050.43
n= 9 years x 2 payment per year = 18
YTMs = 5.9010386%
This is a semiannual rate, as we were working with semiannual payment
to get the YTM we multiply by 2 and get:
YTM: 0.118020773 = 11.80%
Assume a project has normal cash flows. According to the accept/reject rules, the project should be accepted if the: IRR exceeds the required return.
Internal rate of return (IRR) is a metric used in financial analysis to estimate the potential profitability of an investment. The IRR is the discount rate that drives the net present value (NPV) of all cash flows to zero in discounted cash flow analysts. This suggests that an expected angel investment IRR of at least 22% is considered a good IRR. The higher
the project's projected IRR and the higher the amount above its cost of capital, the more net cash the project brings to the firm. So in this case the project appears to be profitable and management should go ahead with it.
Learn more about IRR here
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