Implications of this result for cash management decisions

Assignment Help Operation Management

Reference no: EM131188128

Assuming a 1-year money market account investment at 1.5 percent (APY), a 2.5 percent inflation rate, a 28 percent marginal tax bracket, and a constant $50,000 balance, calculate the after-tax rate of return, the real rate of return, and the total monetary return. What are the implications of this result for cash management decisions?

Reference no: EM131188128

Questions Cloud

What is the debt capacity of the project in part : Suppose Alcatel-Lucent has an equity cost capital of 10.1%, market capitalization of $10.05 billion, and an enterprise value of $15.0 billion with a debt cost of capital of 5.9% and its marginal tax rate is 34%. If Alcatel-Lucent maintains its debt-e..

Compute the stocks expected return : Suppose a market expected return of 10% and a riskless rate of 6%. Assume the CAPM. A stock has correlation of 0.8 with the stock market, standard deviation of 30%, and the market standard deviation is 20%. Compute the stock's expected return.

The amount of funds available for potential projects : If the capital budget is constrained by the amount of funds available for potential projects, what mistakes might a manager make if he/she just lists the potential projects by highest to lowest NPV and picks the projects by moving down the list until..

What would be the weight used for equity in the computation : OMG Inc. has 5 million shares of common stock outstanding, 4 million shares of preferred stock outstanding, and 6,000 bonds. Suppose the common shares are selling for $15 per share, the preferred shares are selling for $24 per share, and the bonds ar..

Implications of this result for cash management decisions : Assuming a 1-year money market account investment at 1.5 percent (APY), a 2.5 percent inflation rate, a 28 percent marginal tax bracket, and a constant $50,000 balance, calculate the after-tax rate of return, the real rate of return, and the total mo..

Book value of equity is equal to market value of equity : GTB, Inc., has a 20 percent tax rate and has $53.50 million in assets, currently financed entirely with equity. Equity is worth $5 per share, and book value of equity is equal to market value of equity. The firm is considering switching to a 20-perce..

What weights will result in a portfolio variance of zero : Assume that your data are normally. distributed and you calculate a mean of 0.06 and a standard deviation of 0.005. What is a 99% confidence interval around the mean? Standard deviation of returns for stock A is 0.3, the standard deviation of returns..

About consumer behavior and rapid changes in their behavior : What was so different about marketing today as opposed to the past? Where do you see marketing going in the future? Why should we care about consumer behavior and the rapid changes in their behavior?

Culture as subsystem inside the organization : Zappos' company culture is key to its success. Thinking of a company's culture as a subsystem inside the organization is consistent with which perspective of organizations?

User Account

All Pages