Importance of interest rates
Course:- HR Management
Reference No.:- EM13748168

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> HR Management

1. Explain the importance of interest rates, and how risk is considered to businesses and economic activity.

2. Construct a pro forma income statement for the first year and second year for the following assumptions:

  • Units of Sales in Year 1: 110,000
  • Price per Unit: $11
  • Variable cost per unit: 30%
  • Fixed Costs: $125,000
  • Income taxes: 15%
  • Interest Expense: $200,000
  • In year 2, Price per unit increases to $11.50, and unit of sales increases by 5%, all other assumptions remain the same.

3. Calculate the sustainable growth based on the following information:

  • D= 30%
  • ROE = 25%

4. Calculate a table of interest rates based on the following information:

a. The pure interest rate is 1.6%

b. Inflation expectations for year 1 = 3%, year 2 =3.5%, years 3-5 =5%

c. The default risk is .1% for year one and increases by .2% over each year

d. Liquidity premium is 0 for year 1 and increases by .2% each year

e. Maturity risk premium is 0 for years 1 and 2 and .2% for years 3-5

Put your comment

Ask Question & Get Answers from Experts
Browse some more (HR Management) Materials
Construct a payoff table for this set of actions using total cost as the "payoff." What is the probability that a randomly selected worker is a Female Hispanic/Latino?
What are some of the arguments for the ineffectiveness of group brainstorming? What can be done to restructure the design of brainstorming groups to increase productivity an
HRM522:Imagine you have been hired to head the HR department for a young travel agency with 150 employees. The agency's previous HR head quit after only one year. After work
As standards have been developed throughout industries to improve quality of service and products, educational standards view the student as the "product." Examine how this
Share one lesson or activity that can be completed with the whole class. The lesson or activity should focus on the importance of awareness and bully prevention. Describe th
Dr. Smith has a full morning of minor office surgeries scheduled for today. Sarah, his nurse, has set up the room and prepared the patient. Prior to starting, Dr. Smith requ
Write a response addressing the importance of the unique perspective of anthropology in today's global economic market. How did anthropological methods help the speaker gain
Identify the global societal problem within the introductory paragraph and conclude with a thesis statement that states your proposed solution(s) to the problem. For guidanc