Answer : The risk reward ratio for Cornhusker Enterprises is 0.75, while that for Mustang Associates is 0.90.
Since the risk-reward ratio for Mustang Associates is higher, it's risk-reward ratio is worse.
In this question, we first need to calculate the risk-return ratio for both the stocks.
The risk-reward ratio express risk (standard deviation) per unit of expected return (mean).
We can calculate the risk-reward ratio (coefficient of variation) by using the following formula:
where
σ = Standard deviation
μ = Expected Return on a security.
<u>Cornhusker Enterprises:</u>
<u>Mustang Associates:</u>
Answer:
$779,424.31
Explanation:
To determine the maximum initial investment would make the project acceptable, we have to find the present value of the cash flows.
Present value is the sum of discounted cash flows.
Cash flow each year from year 1 to 12 = $104,500
I = 8.2%
Present value = $779,424.31
To find the PV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Answer:
Following are the responses to the given choices:
Explanation:
Please find the complete question:
1-year distance recovery = sensitive resources rate - liabilities sensitive rate
Rate sensitive assets = investments(<1 year) + short-term loans(<1 year)
Dependent Rate=sensitive rate of deposits+ fed fund borrowing
The difference in replicating gaps:
If interest rates decline by 1%, net income becomes down
Answer:
Extend the useful life of an asset beyond its original estimate
Explanation:
An extraordinary repair is a major repair that is done to an asset that extends the asset's useful life beyond what was forecasted initially. In other words, an extraordinary repair is an overhaul or upgrade or hat makes an asset to last longer.
Extraordinary repairs are capitalized. This means that the cost of repair increases the asset's book value thereby increasing the depreciation expenses over the asset's revised remaining life.
Answer: a. benefit from; be adversely affected by
Explanation:
Because foreign transactions have to be executed in foreign currency, having a stronger dollar would benefit a US based company such as Springfield Co. as they will be able to get MORE foreign currency per dollar to be able to engage in transactions.
Conversely, having a weaker dollar could affect a US based company adversely as they will only get LESS of the currency in question and thus have to pay more per dollar in the transaction.