Answer:
The Net Present Value (NPV) of this project is <u>$93,405.59</u>.
Explanation:
Note: Find attached the excel file for the calculation of the NPV of this project.
Net present value (NPV) refers to the present value of cash inflows minus the present value of cash outflows over a specified period of time.
On its own, present value (PV) refers the value that a future sum of money or stream of cash flows has now or currently given a specified rate of return. The formula for calculating the PV is given as follows:
PV = FV / (1 + r)^n
Where,
FV = Future value
r = discount rate. This is given as 10% in this question
n = Relevant period, e.g. year
The above explanation and formula together with other stated formulae in the attached excel file is used in calculating the NPV of this project.
Answer:
7.82%
Explanation:
Given the following :
Par value = 102%
Coupon rate = 8.1%
Period (n) = 10 years
Yield to maturity (YTM) =?
with a face value (F) of $1000
The current price (P) of bond will be:
102% * $1000 = (1.02 * $1000) = $1020
Annual coupon payment = $1000 * 8.1% = $1000 * 0.081 = $81
The YTM formula is given by:
YTM = [ C +( F - P) / n] / [(F + P) / 2)]
YTM= [(81 + (1000 - 1020) / 10] / [(1000 + 1020)/2)]
YTM = [(81 +(-20/10)] / (2020/2)
YTM = [(81 - 2) / 1010]
YTM = 79 / 1010
YTM = 0.078217
YTM =0.078217 * 100
YTM = 7.82%
Answer:
16.71%
Explanation:
The computation of the bank reserve ratio is shown below:
= Cash reserves ÷ total deposits × 100
where,
Cash reserve is $10,000
And, the total deposits would be
= Checking deposits + saving deposits
= $20,000 + $40,000
= $60,000
Now put these values to the above formula
So, the ratio would equal to
= $10,000 ÷ $60,000 × 100
Answer:
Free cash flow (FCF) for next year = $ 6,450 million
Explanation:
<em>Free cash flow represents the amount that is left to all the providers of capital after the payment of all all operating expenses, working capital and investment in fixed asset expenditures.</em>
<em>It is computed as cash flow made from operation less capital expenditures</em>
For Blur Communications
The Free cash flow
= EBIT (1-T) - increase in capital expenditure - increase in working capital
= 7600 - $1,140 - 10
= $ 6,450 million
Free cash flow (FCF) for next year = $ 6,450 million
Answer:
Yield to Call = 8.66%
Explanation:
The computation of the yield to call is shown below:
First determine Current Price of Bond,
PV = [FV = 1,000, PMT = 30, N = 40, I = 0.075 ÷2]
PV = $845.87
Callable Price = $1,050
Now
Calculating Yield to Call,
I = [PV = -845.87, FV = 1,050, N = 20, PMT = 30]
I = 8.66%
Yield to Call = 8.66%
