Answer:
The Expected Earning for the college graduates is 40,000
Explanation:
The Expected Earning for a college alum with a four year college education in financial matters is determined as weighted normal all things considered, utilizing likelihood of every result as its weight.
Although the Expected Earning is;
Expected Earning = (25% × 30,000) + (50% × 40,000) + (25% × 50,000)
Expected Earning = 0.25 × 30,000 + 0.5 × 40,000 + 0.25 × 50,000
Expected Earning = 7500 + 20,000 + 12,500
Expected Earning = 40,000
Answer:
A
Explanation:
When we talk about franchising then it comes with high cost and fee. Firstly, the franchisee need to fulfill certain requirements like specified space, Dining capacity etc. Then franchisee needs pay franchise fee. So to fulfil the specific requirements to attain the franchise, the cost is high. Franchisor, to maintain the brand name apply certain specific requirements on number of diners, space, type of dishes etc. They all comes with high cost. Also the franchise fee will be high as written in question that its successful fast food chain.
After business starts, the franchisee needs to pay certain amount to franchisor every month in terms of ROYALITY.
So, WHen we talk about franchise it comes with high cost.
Flow to Equity (FTE) is the approach to capital budgeting that discounts the after-tax cash flow from a project going to the equity holders of a levered firm.
An alternative capital budgeting strategy is the flow to equity (FTE) or free cash flow approach. The FTE approach merely requires that equity capital be discounted at the cost of the cash flows from the project to the equity holders of the leveraged firm. The amount of cash that a company's equity shareholders have access to after all costs, reinvestment, and debt repayment is taken into account is known as flow to equity. Free Cash Flow to Equity (FCFE) is calculated as Net Income - (Capital Expenditures - Depreciation) - (Change in Non-cash Working Capital) - (Change in Non-cash Equity) + (New Debt Issued - Debt Repayments) This is the cash flow that can be used to repurchase stock or pay dividends.
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Answer:
Cindy has more amount than Jimmy.
Explanation:
Amount invested by Cindy P = $3000
Annual rate of interest = 8%
As the amount is compounded semiannually
So rate of interest 
%
Time = 20 year
So time period n = 20×2 = 40
So amount own by Cindy 
$
Amount deposit by jimmy P = $3000
Annual rate of interest = 7.75 %
As the amount is compounded monthly
So rate of interest 
%
Time period = 20×12 = 240
So amount own by Jimmy
$
From the calculation we can see that Cindy has more amount than Jimmy.
Answer:
a) Pre-tax cost of debt is 8.45%
b) After tax cost of debt is 5.07%
Explanation:
a) Given:
Debt issue outstanding = $15.5 million
Semi-annual coupon rate = 0.063 / 2 = 0.0315
Assumed par value (FV) = $1,000
Coupon payment (pmt) = 0.0315 × 1000 = $31.5
Current bond price (PV) = 92% of $1,000 = $920
Time period (nper) = 5 × 2 = 10 periods
Calculate semi-annual rate using spreadsheet function =Rate(nper,pmt,PV,FV)
Semi-annual rate = 4.14%
Pmt and FV are negative as they are cash outflows.
YTM = 4.14 × 2 = 8.28%
Effective annual rate = 
= 
= 0.0845 or 8.45%
b) Tax rate is 40%
After tax cost of debt = Pre tax cost of debt × (1 - 0.4)
= 0.0845 × 0.6
= 0.0507 or 5.07%
