Answer:
Annual savings = 61,746.
Explanation:
The Net Present Value (NPV) is the difference between the present value (PV) of cash outflows and PV of cash inflow
At the internal rate of return the PC of annual cash savings will be equal to the investment cost
Initial cost = 211980
PV = annual cash savings = A× (1- (1+r)^(-n)/ r
A=? r-internal rate of return, 14%, n-number of years- 5
211980 = A (1- (1.14)^(-5)/ 0.14
211,980 = A× 3.433080969
A= 211,980/3.43308
A= 61746.28619
Annual savings = 61,746.
Answer:
P=24.92 per quarter
Explanation:
this problem can be solved applying the concept of annuity, keep in mind that an annuity is a formula which allows you to calculate the future value of future payments affected by an interest rate.by definition the future value of an annuity is given by:
where 
is the future value of the annuity, 
is the interest rate for every period payment, n is the number of payments, and P is the regular amount paid. so applying to this particular problem, we have:
we will asume that deposits are made as interest is compounded it is quarterly thats why we multiply 60 and 4 and also we divide 12% into 4, so:
solving P
P=24.92
It is a false statement that the existence of financial middlemen and financial intermediaries increases the efficiency of the financial market
<h3>Who are financial intermediaries?</h3>
This refers to those entities that acts as the middleman between two parties in a financial transaction such as a commercial bank, investment bank, mutual fund, or pension fund. They offer a number of benefits to the average consumer such as safety, liquidity, and economies of scale involved in banking and asset management.
However, It is a false statement that the existence of financial middlemen and financial intermediaries increases the efficiency of the financial market because only the buyers and seller influence an efficiency of the financial market.
Read more about financial intermediaries
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Answer:
Explanation:
The first statement is Incorrect that Companies using LIFO will report the smallest cost of goods sold. Rest all the three statements that have been provided are correct.
Statement A - Incorrect
Statement B – Correct
Statement C – Correct
Statement D – correct the goods sold. companies using FIFO will report the smallest cost of goods sold.
Answer:
The after-tax cost of debt : 3.90%.
Explanation:
The semi-annual coupon = 1,000 x 5% /2 = $25.
The before-tax cost of debt, denoted as i, is the yield to maturity of the company's debt, which is calculated as below:
(25/i) x [1 - (1+i)^-40] + 1,000/(1+i)^40 = 854 <=> i = 3.147%.
=> Because the debt is semi-annual compounded, we have the: Effective annual rate = Before-tax cost of debt = ( 1+ 3.147%)^2 -1 = 6.39%.
=> After tax cost of debt = Before tax cost of debt x ( 1 - tax rate) = 6.39% x ( 1 - 0.39) = 3.90%.
So, the answer is 3.90%.
