rue or False Bond par value of $10,000 and pays 12 interest, per year for 10 more years Current selling is $9000 nominal yield is 12 The current yield is 13 33 and the yield to maturity is 13 83 A company sells products payable in 60 days in the amount of 10,000 euros The exchange rate is 1 25 US dollars to the euro at the time of sale If the euro depreciates by 2 versus the US dollar in the 60 day period between the sale and collection, the fi rm has experienced a loss The 2 depreciation would mean that the new exchange rate is 1 225 (1 25 98 ) euros to the US dollar Hence, the firm has lost $225 The price elasticity of demand for a product is 1 5, price increased by 10 The effects of the price increase on demand is 15 Consider these data Selling price Variable costs Contribution marginA $ 60 $20 $40 B $40 $15 $25Company has a sales mix ratio of 3 2 in favor of B Fixed cost is $34,000 Company will produce 20,000 more units than B Possible outcomes and probabilities of a project $100,000 20 Pessimistic $150,000 60 Most likely $200,000 20 Optimistic Expected return is $175,000 An investor has two types of assets in his or her investment portfolio Asset 1 is 60 of the portfolio, with an expected return of 10 Asset 2 is 40 of the portfolio, with an expected return of 5 The expected return of the portfolio is calculated 8 It is a correct decision to reject a project if the following are the facts cost of capital is 10 new investment will generate $45,000 of net income per year for eight years with only $300,000 investment The current income is $250,000 generated from assets of $1,000,000 $10,000 of bonds, semiannual interest of 6 1 rate, matures in six years, and market rate of 5 Bond value is $10,514 Assuming a ten thousand , eight year life ,no salvage value investment with a 30 tax rate, the af ter tax payback period would be 5 years Relaxing credit standards will increase sales by $240,000 Average collection period for new sales will be 60 days Increase in bad debt is 5 Variable costs 75 of sales, and cost of financing accounts receivable is 10 , management should relax credit policy because it will result to an net increase in revenue of $44,000 A company is evaluating a loan that has a stated interest rate of 8 with compounding of interest quarterly The effective annual rate is 8 42 An investor approximation that the probability of the f firm getting a contract is 60 , It is awarded the contract, this will increase the stock price to 20 If not the stock price is predictable to decline by 10 Today's expected return on the stock investment would be computed as follows The investor can make a good decision whether to invest in the stock knowing that the expected return is 8 50 with a standard deviation of 14 70

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 23, 2024

rue or False? Bond - par value of $10,000 and pays 12% interest, per year for 10 more years. Current selling is $9000. nominal yield

rue or False?

Bond - par value of $10,000 and pays 12% interest, per year for 10 more years. Current selling is $9000. nominal yield is 12% ; The current yield is 13.33% and the yield to maturity is 13.83%.
A company sells products payable in 60 days in the amount of 10,000 euros. The exchange rate is 1.25 US dollars to the euro at the time of sale.If the euro depreciates by 2% versus the US dollar in the 60-day period between the sale and collection, the fi rm has experienced a loss. The 2% depreciation would mean that the new exchange rate is 1.225 (1.25 98%) euros to the US dollar. Hence, the firm has lost $225.
The price elasticity of demand for a product is 1.5, price increased by 10%. The effects of the price increase on demand is 15%.
Consider these data:Selling price /Variable costs /Contribution marginA $.60/ $20/ $40 B $40/ $15 /$25Company has a sales mix ratio of 3:2 in favor of B ; Fixed cost is $34,000.Company will produce 20,000 more units than B.
Possible outcomes and probabilities of a project: $100,000 /20%Pessimistic $150,000 /60% Most likely $200,000 /20% Optimistic Expected return is $175,000.
An investor has two types of assets in his or her investment portfolio. Asset 1 is 60% of the portfolio, with an expected return of 10%. Asset 2 is 40% of the portfolio, with an expected return of 5%. The expected return of the portfolio is calculated 8%.
It is a correct decision to reject a project if the following are the facts: cost of capital is 10% ; new investment will generate $45,000 of net income per year for eight years with only $300,000 investment. The current income is $250,000 generated from assets of $1,000,000.
$10,000 of bonds, semiannual interest of 6.1% rate, matures in six years, and market rate of 5%.Bond value is $10,514.
Assuming a ten thousand , eight-year life ,no salvage value investment with a 30% tax rate, the af ter-tax payback period would be 5 years.
Relaxing credit standards will increase sales by $240,000. Average collection period for new sales will be 60 days. Increase in bad debt is 5%. Variable costs - 75% of sales, and cost of financing accounts receivable is 10%, management should relax credit policy because it will result to an net increase in revenue of $44,000.
A company is evaluating a loan that has a stated interest rate of 8% with compounding of interest quarterly. The effective annual rate is 8.42%.
An investor approximation that the probability of the f firm getting a contract is 60%, It is awarded the contract, this will increase the stock price to 20%. If not the stock price is predictable to decline by 10%. Today's expected return on the stock investment would be computed as follows: The investor can make a good decision whether to invest in the stock knowing that the expected return is 8.50% with a standard deviation of 14.70%.