On March 1, Year 1, Gilmore Incorporated declared a cash dividend on its 1,500 outstanding shares of $50 par value, 6% preferred
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You are evaluating a proposed expansion of an existing subsidiary located in Switzerland. The cost of the expansion would be SF21 million. The cash flows from the project would be SF5.5 million per year for the next five years. The dollar required return is 12 percent per year, and the current exchange rate is SF1.07. The going rate on Eurodollars is 6 percent per year. It is 3 percent per year on Swiss francs. a. Convert the projected franc flows into dollar flows and calculate the NPV. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer in dollars, not in millions, e.g., 1,234,567.) NPV $ b-1. What is the required return on franc flows? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Return on franc flows b-2. What is the NPV of the project in Swiss francs ? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer in francs, not in millions, e.g., 1,234,567.) NPV SF b-3. What is the NPV in dollars if you convert the franc NPV to dollars? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Enter your answer in dollars, not in millions, e.g., 1,234,567.) NPV
Explanation:
The solution to the given problem can be found in the attached file below
Answer:
the bank is the best option as it can purchase the car with monthly payment of 223.71 while the other option are payment for 291
Explanation:
option 1 291 per month
option 2
we can chose for a 4.5 loan or a 5.5 loan so we will pick the bank as it is lower and compare with the 291 of dealer 1
the loan of 12,000 at 4.5% APR
we need to calculate the PTM of an ordinary annuity of 5 years discounted at 4.5%
PV $12,000.00
time 60 (5 years x 12 months per year)
rate 0.00375 (we divide the annual rate by 12 to convert it to monthly)
C $ 223.716