Question
Can I please get help with answering the questions below. There are 15 questions total. Need someone good with finance. Will pay good tip. Question
Can I please get help with answering the questions below. There are 15 questions total. Need someone good with finance. Will pay good tip.
Question 4
A pine plantation returns nothing to its owner in the first 3 years.In the following 2 years, the returns are $100,000 and $150,000, respectively.The returns can be invested at 8% per annum.
Please fill in the blank below the correct answer, rounded to 2 decimal places.
The present value to the owner is .
Question 5
Your Aunt Terry has promised to pay you $100 in year 1, $200 in year 2, $300 in year 3, $400 in year 4 and $500 in year 5.Assume that the interest rate is 5% per annum, calculate the present value of Aunt Terry's promised series of payments over the next 5 years.
a. The present value of Aunt Terry's promised series of payments is $1,319.47.
b. The present value of Aunt Terry's promised series of payments is $1,256.64.
c. The present value of Aunt Terry's promised series of payments is $1,500.
d. None of the other answers are true.
Question 6
___________investment decisions is a potential problem in using the IRR method if ___________one discount rate makes the NPV of an investment zero.
Which of the combinationsbelow best fit the blanks in this statement?
a. Multiple rates of return; more than
b. Multiple rates of return; less than
c. Mutually exclusive; more than
d. Mutually exclusive; less than
Question 7
Your firm is considering a project that will cost $4.55 million upfront, generate cash flows of $5 million per year for three years, and then have a cleanup and shutdown cost of $6 million in the fourth year.Assume a discount rate of 10% per annum, what is the NPV of this project?
a. The NPV of this project is $10.89 million.
b. None of the other answers are true.
c. The NPV of this project is $3.34 million.
d. The NPV of this project is $3.44 million
Question 8
Luke borrows $750,000 from ANZ to set up a medical practice.He agrees to pay a fixed interest rate of 12% per annum compounding monthly and to repay by equal monthly instalments over 20 years.Calculate the monthly repayment and the remaining loan after making 24 monthly repayments.
a.The monthly repayment is $8,258.15 and the outstanding is $776,461.59 after making 24 monthly repayments.
b.The monthly repayment is $8,258.15 and the outstanding is $729,550.18 after making 24 monthly repayments.
c.None of the other answers are true.
d.The monthly repayment is $107,103.02 and the outstanding is $776,461.59 after making 24 monthly repayments.
Question 9
Tick the factors that financial manager should include when computing the incremental free cash flows of an investment decision.
a.Project externalities
b.Financing costs
c. Sunk costs
d. Opportunity costs
Question 10
What is the effective annual interest rate corresponding to a nominal interest rate of 8% per annum, compounding quarterly?
a. The effective annual interest rate is 8%.
b. The effective annual interest rate is 8.24%.
c. None of the other answers are true.
d. The effective annual interest rate is 7.5%
Question 12
Find the present value of an ordinary annuity of $5,000 per annum for 4 years if the interest rate is 8% per annum.
a. The present value is $20,000.
b. The present value is $33,663.72.
c. The present value is $16,560.63.
d. None of the other answers are true.
Question 13
Carlton Investment Ltd has issued preference shares.On that date the preference share price was $2.05, the annual dividend was $0.14.Calculate the cost for Carlton's irredeemable preference share.
a. None of the other answers are true.
b. The cost for Carlton's irredeemable preference share is 28.7% per annum.
c. The cost for Carlton's irredeemable preference share is 14.64% per annum.
d. The cost for Carlton's irredeemable preference share is 6.83% per annum.
Question 15
The Arrow Company Ltd issued a debenture 10 years ago with a coupon rate of 6% (annual coupon) that will matures in 5 years.The current market price of the debenture is $98.5 and the par value is $100.What is the yield on Arrow Company debentures?
a. The yield on Arrow Company debentures is 6.36% per annum.
b. The yield on Arrow Company debentures is 6.46% per annum.
c. None of the other answers are true.
d. The yield on Arrow Company debentures is 6% per annum
Question 16
Which of the following is not considered as the advantage of payback period?
a. Biased against long-term projects, such as new projects and research and development.
b. Biased toward liquidity.
c. Adjusts for uncertainty of later cash flows.
d. Easy to understand
Question 17
Assume the expected return on SFM's equity is 12% and the yield to maturity on its debt is 7%.Debt accounts for 20% and equity for 80% of SFM's total market value.If its tax rate is 30%, what is an estimate for this firm's WACC?
a.The WACC (adjusted for tax) is 7.22%.
b. None of the other answers are true.
c. The WACC (adjusted for tax) is 11%.
d. The WACC (adjusted for tax) is 10.58%.
Question 18
You are working part-time and planning a holiday which requires $5,000 for flights and accommodation in 2 years.What is the annual deposit for the next 2 years?Assume a 3% per annum interest rate throughout.
Fill in the blank below with the correct answer, rounded to 2 decimal places.
You need to save every year for the next 2 years.
Question 19
Suppose that you need $500 to buy required textbooks when you enter university in 3 years.You can earn 3% per annum in your saving account with current balance of $250.How much do you have to invest today to ensure you have sufficient funds to purchase the required textbooks 3 years later?
a. None of the other answers are true.
b. You need to deposit $546.36 into your saving account today.
c. You need to deposit $207.57 into your saving account today.
d. You need to deposit $250 into your saving account today
Question 20
Consider the following information:
Share I BetaI Expected Return (%) I
Lazy I 1.5 I 15% I
Active I1.2 I 10%I
Suppose you have $30,000 in total.If you invest $15,000 in Share Lazy and the remainder in Share Active, what will the expected return on your portfolio be?
a. The expected return in your portfolio is 12%.
b. The expected return in your portfolio is 12.5%.
c. None of the other answers are true.
d. The expected return in your portfolio is 1.35%
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