Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Question :
(a) Lucky Corporation is considering an investment in one of the two mutually exclusive proposals: Project A which involves an initial outlay of Rs 170,000 and Project B which has an outlay of Rs 150,000. The Certainty Equivalent Approach is employed in computing risky investments. The current yield on treasury bills is 0.05 and the company uses this as the riskless rate. The evaluated values of net cash flows with their respective certainty equivalents are:
Required:
i. Which Project could be acceptable to the company?ii. Justify which Project is riskier? iii. If the company was to use the risk adjusted discount rate method, which Project could be analysed with higher rate?
(b) If the required rate is 10 percent, evaluate the present value of the cash flow streams detailed below:
I. Rs 100 at the end of year 1. II. Rs 100 at the end of year 4. III. Rs 100 at the end of year 3 and year 5. IV. Rs 100 for the next 10 years ( for years 1 through 10).
(c) Miss. Kiran has in her possession 300 preference shares of Cintex company Ltd, which currently sells for Rs 400 per share and pays an annual dividend of Rs 34 per share.
I. Determine Miss Kiran's expected return. II. If Miss Kiran needs an 8 per cent return, given the price, should she sell or buy more stock.
Q. Example on compound value of the single flow? Mr. X invests Rs. 1000 at 10% is compounded yearly for three years. Compute value after three years. FV = PV (1+i) n FV
Procedure of measurement of Future Value If we are getting a return of 10 % in one year then what is the return we are going to get in two years? 20 %, right. What about return
Part B This case is intended to be an introduction to the various methods used in capital budgeting and looks at some of the decisions that may have to be made when evaluating pro
Q. Show the Working capital in a business? Working capital in a business is essential since of operating cycle. However the need for working capital doesn't come to an end afte
QUESTION i) Discuss the risk associated with changes in exchange rates. ii) How can these risks be managed internally? iii) Explain how a manager can use a forward contra
Compound options are usually cheaper than vanilla options and we know that there are four main types of compound options: a call on a call; a put on a call; a call on a put; a put
Question 1: i) Discuss the benefits of international diversification and the issue of home country's bias in equity and bonds markets? ii) Explain carefully the currency he
A bond whose payments are made in foreign currency has unknown cash flows in domestic currency. This is because the cash flows are dependent on the exchange rate
name, cost ,features and size
Q. What do you mean by Letter of Credit? A letter of credit is an arrangement whereby a bank helps its customer to obtain credit from its (customer's) suppliers. When a bank op
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd