A pension plan is obligated to make disbursements of $1.4 million, $2.4 million, and $1.4 million at the end of each of the next three years, respectively. Find the duration of the plan's obligations if the interest rate is 8% annually.
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What would the estimated property value and land value be under the above assumptions?- What would the property value and land value be now?
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A firm sells its $1,120,000 receivables to a factor for $1,075,200. The average collection period is 1 month. - What is the effective annual rate on this arrangement?
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Assume the Black-Schools framework. Let S be a stock such that S(0) = 21, the dividend rate is δ = 0.02, the risk free rate is r = 0.05, and the volatility is σ = 0.2. Calculate the expected payoff of a 6 month call with strike price 17. Calculate th..
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What is the most expensive publicly traded stock in the United States? Go to finance.yahoo.com and enter BRKA (Berkshire Hathaway Class A). What is the current price per share? What is the 52 week high and low? How many share trade on an average day?..
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Maggie's Muffins, Inc., generated $2,000,000 in sales during 2015, and its year-end total assets were $1,200,000. Also, at year-end 2015, current liabilities were $1,000,000, consisting of $300,000 of notes payable, $500,000 of accounts payable, and ..
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Consider two nations Canada and the Mexico with the following variables: YCA = 1.21 millions CA . yCA = 855,000 CA ; MCA = 315,000 CA ; YMX= 685,000 Pe . yMX= 549,000 Pe ; MMX = 110,000 Pe. Find the value of kCA and kMX ( fraction of nominal income h..
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Cohen's Bowling Emporium has a degree of financial leverage of 2.0 and a degree of combined leverage of 6.0.- What effect will a 15 percent increase in sales have on EBIT?
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What is the equivalent present value of the following series of payments: $10,000 the first year, $11,000 the second year and $12,000 the third year? Consider 4% interest, compounded annually.
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A few years ago, Kate purchased a small apartment building for $500,000 and made capital improvements which cost $90,000. During this period, she also claimed $45,000 in depreciation on her tax returns. If she sells the apartment building for $610,00..
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The president of Lowell Inc. has asked you to evaluate the proposed acquisition of a new computer. The computer’s price is $60,000 and it falls into the MACRS 3-year class (33% in year 1, 45% in year 2, 15% in year 3, and 7% in year 4). Purchase of t..
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A firm is liquidating a factory. Equipment that originally cost $120,000 is being sold for $12,000 three years after its purchase. Given that the firm's marginal corporate tax rate is 40%, what is the terminal cash flow for this equipment? A piece of..
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