What-if forecasting provides information regarding how much net interest income changes when interest rates are assumed to increase/decrease by various amounts.

Q: The following information showed: State of the Economy                       Probability of the Sta...

A: Expected return =summation of returns ×probabilities =(13%×20%)+(10%×55%)+(5%×25%) = 9.35%  

Q: Statement I - Exchange rate risk is a factor that contributes to the difficulty of the company to ma...

A: Credit Period relaxation means extending the credit period given to our customer, it is beneficial i...

Q: What is the bad result if a cashless society increases more private currency?

A: A cashless society is an economic situation during which financial transactions are administered wit...

Q: A start up business iIS I TYPE A TYPE B First Cost P200,000.00 P300,000.00 Annual operating cost 32,...

A: The present worth analysis is an analysis in which all the future costs and the benefits related to ...

Q: You are considering buying a semi-annual coupon bond with a stated coupon rate of 9 % (note that the...

A: Par value of bond (FV) = 1000 (Assumed) Coupon rate = 9% Coupon amount (C) = 1000*0.09 = 90 Years to...

Q: The Bank of France sells U.S. dollars ($) at a rate of ($1.40)/(€1) and buys U.S. dollars at a rate ...

A: Exchanging 36 euros to US dollars means buying US dollars from Bank of France.  

Q: 2. Janine has two choices for paying off her credit card balance. She can make payments of $186 per ...

A: Credit cards allow the cardholder to pay for their purchases based on the promise that they will be ...

Q: Consider a $100 par value bond that has an 8% coupon rate, pays a semi-annual coupon, matures 2 year...

A: Par value = $100 Coupon rate = 8% Semi-annual = 2 times in a year maturity = 2 years Yield = 6% 

Q: Cool Stuff, Inc. uses 800 units of a product per year on a continuous basis. The product has carryin...

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question...

Q: Bart Software has 7.6 percent coupon bonds on the market with 23 years to maturity. The bonds make s...

A: A financial instrument that doesn’t affect the ownership of the common shareholders or management of...

Q: Round your answers to the nearest cent.   What is the value of a stock if: D0 = $2.10 k = 10% g = ...

A: A model that helps to evaluate the value of the stock with the assumption that the dividend will gro...

Q: If you are calculating the present value of this cash flow under semiannual (twice per year) compoun...

A: Future Value: It represents the value of annual cash flows or the sum of money at a later/future da...

Q: A Bond par value sh. 100 coupon rate 7%  investment period 10 years  a) Determine the value of the ...

A: A bond is represented as a fixed income security in which a borrower takes a loan from the investor ...

Q: You are trying to pick the least-expensive equipment for your manufacturing operations. You have two...

A: To take the valuing decision between the two alternatives that have a different useful life, it is r...

Q: A company has outstanding $660,000 of 8% bonds on which the interest is payable annually on 31 Decem...

A: The cost of debt is the effective rate that the company is willing to pay to its debt holders. The d...

Q: A company has issued $75 million (face value) of bonds with three-years to maturity. They offer an a...

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new que...

Q: merchant is offered a 5% discount for immediate payment of a bill which is due in 90 days.  What is ...

A:

Q: Sam Long anticipates he will need approximately $225,000 in 15 years to cover his 3-year-old daughte...

A: Given: Future value = $225,000 Years = 15 Interest rate = 8% Compounding = Semi annually

Q: An ordinary annuity where the first cash flow of the series is not at the end of the first period an...

A: Annuity: It is a series of payments that is paid  at equal intervals.  

Q: The TopCar Industries manufactures and sells car components. The current annual sales volume is 500,...

A: Sales volume = 500000 units Selling price per unit = P 0.50 Annual expenses = P 80000

Q: The Philippine Association of Board Examiners (PABE) desires to award a P1,600 scholarship annually ...

A: To determine up to which year scholarship can be awarded, it is required to calculate the interest e...

Q: Given the information below for HooYah! Corporation, compute the expected share price at the end of ...

A: Price ratio analysis helps in ascertaining the price of the stock in relation to various other facto...

Q: a) What is the NPV of the merger to Firm A? What is the NPV of the merger to Firm B? b) What will be...

A: We can say that a company X acquired another company Y if X purchase all or most of the shares of Y....

Q: What is the total interest paid on a loan of $5,000 at APR = 6% for 5 years.

A: Compound Interest = P(1+r/n)^nt - PWhere P = Principal = $5,000R = Rate on interest = 6%N = number o...

Q: Solve by using compound table: (Round the "Total Amount" and "Total Interest" to the nearest cent.) ...

A: Total Amount = P 1+rnnt where P = Principal r = Rate of Interest n = number of compounding per year ...

Q: If a RM10,000 investment will return RM25,000 to you in five years, then to the nearest percent what...

A: Investment = RM10,000 Return = RM25,000 Period = 5 Years

Q: An entity uses the economic order quantity model and wishes to discover how many orders it need to p...

A: Economic Order Quantity E.O.Q is the ideal or optimal quantity that helps in minimising the total co...

Q: An amount of $1500 is deposited for 6 years in an account that earns 7% interest. (Round your answer...

A: Simple interest is calculated as: = Principal * Rate of Return * Time, However, compounded rate of r...

Q: Gator Fabrics Inc. currently has zero debt (i.e., wd = 0). It is a zero growth company, and  additio...

A: Weighted Average Cost of Capital (WACC) is equal to the cost of equity in case of a zero-debt compan...

Q: Clark borrows P 600,000 at 15% compounded annually agreeing to repay the loan in 15 equal payments. ...

A: Loan amount (PV) = P600,000 Interest rate (r) = 15% Number of payments (n) = 15

Q: what underwriting risk. what are two risks faced by insurance companies?

A: The underwriting risk is the risk which is borne by the underwriter due to the inaccurate assessment...

Q: What does this tell you about total cost when financing for longer periods?

A: Leasing a vehicle refers to driving a car through periodic payments towards the car without actually...

Q: What is the value of a share of a corporation's $4.80 preferred stock to an investor who requires a ...

A: Given: Dividend = $4.8 Required return = 12%

Q: 1. A Fast-Moving Consumer Goods (FMCG) Company produces certain items at a labor cost of P 115 each,...

A: 1) Let the units for breakeven = X Unit sales price (s) = P 600 Unit variable cost (c) = P 115 + P 7...

Q: A firm has total debt of $1,400 and a debt–equity ratio of .25. What is the value of the total asset...

A: Debt = $1400 Debt to equity ratio = 0.25 Equity = debt/Debt to equity ratio            = 1400/0.25  ...

Q: very successful health and recreation club wants to construct mock mountain for Climbing and exercis...

A: Net present value of the project is the present value of all future cost associated with the project...

Q: Carl Hightop, a popular basketball player, has been offered a four-year salary deal. He can either a...

A: Option-A - Lump sum Lump sum payment = $4,800,000   Option-B - Quarterly payments   Quarterly paymen...

Q: 351,009 ,607,837

A: The notion of present value asserts that a sum of money today is worth more than a sum of money in t...

Q: The exact simple interest of P7,000 invested from April 28, 2002 to December 25, 2002 is P700. What ...

A: Investment = P7000 Interest amount = P700 Period from April 28, 2002 to December 25,2002 = 241 Days ...

Q: "What is the effect of state laws forcing individuals to purchase auto liability insurance?"

A: Liability insurance protects against bodily harm and/or property damage claims. If the insured party...

Q: Given the information below for StartUp Co., compute the expected share price at the end of 2020 usi...

A: Price ratio analysis helps investors in analyzing the market value of stock as compared to sales rev...

Q: Alpha Corporation reported the following financial details for t ncial year 2021. Revenue is $250 mi...

A: The Earning per Share or the EPS are of two types that is the Basic EPS and the Diluted EPS. This me...

Q: Solve the following word problems with NEAT and COMPLETE SOLUTIONS. Answers should be rounded off to...

A: Annuity means a set of payments which are the same in size and made in equal time gaps for a certain...

Q: Assume that the risk-free rate is 6.00% and the market risk premium is 6.75%. What is the expected ...

A: Given: Risk free rate=6% Market risk premium = 6.75%

Q: Suppose you bought the portfolio in (1), and suppose further that Firm A's share price increased to ...

A: Firm A's new share price increase = PHP 36 Firm B's new share price falls = PHP 38   Number of share...

Q: 5. The average car depreciates at a rate of 20% the first year after purchase and 15% every year the...

A: Cashflows means movement of cash. This movement can be positive and negative. Positive movement mean...

Q: SHOW SOLUTION Mr. Jones borrowed P 20,000 from a lending firm and an additional P 5,000 after 2 mon...

A: Present Value is obtained by discounting all future payments till date whereas future value is calcu...

Q: A machine has a first cost of PhP 800,000 and a salvage value of PhP 50,000 at the end of its life a...

A: Return means earn additional on invested amount over the period. It shows excess cash inflow over ca...

Q: Your bank pays an interest rate quoted as 5.0% per annum compounded semi-annually. You invest $1,000...

A: Semi-annual interest rate (r) = 5%/2 = 2.5% Number of Semi-annual compounding (n) = 5 years x 2 = 10...

Q: What is the total interest paid on a loan of $5,000 at APR = 8% for one year.

A: Loan amount (LV) = $5000 Interest rate (r) = 8% Period (n) = 1 Year

Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.