Answer:
b. 3.4 years
Explanation:
The formula to compute the payback period is shown below:
= Initial investment ÷ Net cash flow
where,
Initial investment is $379,000
And, the net cash flow = annual net operating income + depreciation expenses
= $57,000 + $53,000
= $110,000
Now put these values to the above formula
So, the value would equal to
= ($379,000) ÷ ($110,000)
= 3.4 years
Loan commitment or credit line.
Answer: Options II or III.
<u>Explanation:</u>
A loan advancement is a bank's guarantee to offer an advance or credit of a predefined sum to a borrower. Likewise called a dedication letter, it incorporates the entirety of the terms and states of the credit.
A credit line is the measure of cash that can be charged to a Mastercard account. The size of a credit line, and its amount has been obtained, impact purchaser FICO assessments. Low credit usage — that is, a credit line on which little has been obtained — prompts a higher FICO rating.
Answer:
Determinants of Interest Rates The real risk-free rate is 4%. Inflation is expected to be 4% this year, 5% next year, and then 4.5% thereafter. The maturity risk premium is estimated to be 0.0006 × (t - 1), where t = number of years to maturity. What is the nominal interest rate on a 7-year Treasury security?
The nominal interest rate = 8.86%.
Explanation:
Average inflation premium = (4%+5%+4.5%+4.5%+4.5%+4.5%+4.5%)/7 = 31.5%/7 = 4.50%
Maturity risk premium for 7 year bond = 0.0006 * (7-1) = 0.36%
Nominal interest rate = real risk free rate + inflation premium + maturity risk premium = 4% + 4.50% + 0.36% = 8.86%.
Therefore, the nominal interest rate for the question given = 8.86%.
Answer:
share price at 5 year is $45.19
Explanation:
given data
annual dividend D1 = $2.86
paid a dividend Do = $2.75
discount rate K = 11.7 percent
to find out
share price of common stock be worth five years
solution
first we get here growth rate that is express as
growth rate = 
..................1
put here value we get
growth rate = 
growth rate = 4%
so here dividend at 6 year will be
Dn = Do × 
.............2
D6 = 2.75 × 
D6 = $3.48
so share price at five year will be
P5 = 
.................3
P5 = 
P5 = $45.19
so share price at 5 year is $45.19
