Raya Mutual Fund of Kuala Lumpur has RM5 million to invest in certificates of deposit (CDs) for the next six months (180 days). It can buy either a CIMB Bank CD with an annual yield of 10% or a Mumbai (India) Bank CD with a yield of 12.5%. Determine ..
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Suppose that the inventory period is 40 days, the accounts payable period is 15 days, and the cash cycle is 35 days. What is the accounts receivable period? (Note: Operating Cycle = Inventory Period + Accounts Receivable Period)
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A stock’s intrinsic value can be estimated by discounting expected dividends (or cash flows) to the present using the investor’s require rate of return. Why are capital gains excluded from this model? Does the exclusion of capital gains limit its val..
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What is the present value of an investment that has three cash flows of -$3000, $4,000, and $6,000? These cash flows occur at the end of year 1, 2, and 3 respectively. Use a discount rate (required rate of return) of 13.5%.
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A company has $7.30 per unit variable costs and $5 per unit fixed costs at a volume of 50,000 units. If the company marks up total costs by 0.51, what price should be charged if 70,000 units are expected to be sold?
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Shalit Corporation's 2011 sales were $5 million. Its 2006 sales were $2.5 million. At what rate have sales been growing? Suppose someone made this statement: "Sales doubled in 5 years.
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Parents deposit $7,000 into a savings account at the end of each year for 22 years to help their child pay for college. The savings account pays 7% interest per year, compounded monthly. The child withdrawals an equal sum twice per year while in coll..
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An investment project provides cash inflows of 200, 400, 670, 890, 1130, 1040, 880, 740, 530, 200, 110, 30 each year starting in year 1. What is the project payback period if the initial cost is $5,600? this must done in excel.
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Todd O’Hanlon has worked in the management services division of Focus Consultants for the past five years. He currently earns an annual salary of about $120,000. At 33, he’s still a bachelor and has accumulated about $100,000 in savings over the past..
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Rob purchased a rare car for $246,800 ten years ago. Today, that car has a market value of $815,000. What is the rate of appreciation on this car? Charlie invested $7,200 in a stock last year. Currently, this investment is worth $8,788.38. What is th..
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You expect to receive $15,500 at graduation in three years. You plan on investing it at 12 percent until you have $86,000. How long will you wait from now? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g...
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The goal of this exercise is to explore the trade-offs associated with the NPV of a solar collector project. The QFM for this project is: Development costs are $100K/qtr for Y1. Ramp-Up costs are 10K for Y1 Q4, 50K for Y2 Q1, and 5K for Y2 Q2. How wo..
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