The interest is discounted monthly

Assignment Help Financial Management
Reference no: EM13877727

Company XYZ purchased some machinery and gave a five-year note with a maturity value of $20,000. The discount rate is 8% annually and the interest is discounted monthly. How much did the company borrow?

Reference no: EM13877727

Questions Cloud

How much of the bill will be paid by michaels insurance : Michael Howittt of Berkly, Michigan, recently had his gallbladder removed. His total bill for this surgery, which was his only health care expense for the year, came to $13,890. How much of the bill will Michael pay? How much of the bill will be paid..
Strict residual dividend policy : Reynolds Paper Products Corporation follows a strict residual dividend policy. All else equal, which of the following factors would be most likely to lead to an increase in the firm's dividend per share?
Non participating whole life insurance policy : Beth purchased a $50,000 non participating whole life insurance policy. The annual premium was $1,278. The cash value of the policy after 10 years will be $13,740. The future value of $1 deposited at the start of the year for 10 years, assuming 5 per..
Relation between corporate bonds expected return : What is the relation between a corporate bond’s expected return and the yield to maturity? In your answer, define default risk and explain how these rates incorporate default risk.
The interest is discounted monthly : Company XYZ purchased some machinery and gave a five-year note with a maturity value of $20,000. The discount rate is 8% annually and the interest is discounted monthly. How much did the company borrow?
Identify positive-npv trades be sceptical : Why should investors who identify positive-NPV trades be sceptical about their findings if they don’t inside use inside information or a competitive advantage?
Two mutually exclusive extraction projects : An oil drilling company must choose between two mutually exclusive extraction projects, and each costs $11.8 million. Under Plan A, all the oil would be extracted in 1 year, producing a cash flow at t = 1 of $14.16 million. Does this imply that the W..
Percentage change in the price of bonds : Bond J has a coupon rate of 4.3 percent. Bond S has a coupon rate of 14.3 percent. Both bonds have eleven years to maturity, make semi annual payments, and have a YTM of 9.6 percent. If interest rates suddenly rise by 3 percent, what is the percentag..
What is the percentage change in the price of bonds : Both Bond Bill and Bond Ted have 12.4 percent coupons, make semi annual payments, and are priced at par value. Bond Bill has 5 years to maturity, whereas Bond Ted has 22 years to maturity. If interest rates suddenly rise by 3 percent, what is the per..

Reviews

Write a Review

Financial Management Questions & Answers

  Explain investment project with the cash flows

If the discount rate is 8 percent, what is the future value of the cash flows in year 4? If the discount rate is 11 percent, what is the future value of the cash flows in year 4?

  Credit default swaps contributed to the crisis

Credit default swaps contributed to the crisis in all the following reasons except:

  What is the price of company bond

Smith’s company is selling a bond with the following features: 5 years to maturity, face value of $1000, coupon rate of 2% (semiannual coupons) and yield to maturity of 4% APR. What is the price of Smith’s company bond?

  Explain the emergency fund goals

How long would it take her to achieve the emergency fund goal above if she currently has $18,500 saved, invests $300 per month, and earns an annual percentage yield or APY of 4.25% after taxes in her money market mutual fund.

  What is future value if the payments are an ordinary annuity

Suppose you are going to receive $13,300 per year for six years. The appropriate interest rate is 8.2 percent. What is the present value of the payments if they are in the form of an ordinary annuity?  Suppose you plan to invest the payments for six ..

  Ratios that focus on the proportion of total assets

Ratios that focus on the proportion of total assets financed by a firm’s creditors is referred to as: The U.S. tax structure influences a firm’s willingness to finance with debt. The tax structure____________ more debt

  Yield to call and yield to maturity

Ten years ago the Singleton Company issued 22-year bonds with a 10% annual coupon rate at their $1,000 par value. The bonds had a 9% call premium, with 5 years of call protection. Today Singleton called the bonds. Compute the realized rate of return ..

  Default on its sovereign debt caused the spread

In early 2010, the possibility that Greece might default on its sovereign debt caused the spread between German and Greek debt to ____ by about ____ percentage points

  Evaluating a project-what is the npv of the project

Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project?

  Announces a new monetary growth policy

Suppose that during a certain week the Fed announces a new monetary growth policy, Congress surprisingly passes legislation restricting imports of foreign automobiles, and Ford comes out with a new car model that it believes will increase profits sub..

  Situations will affect the demand curve

Evaluate how the following situations will affect the demand curve for iPods. Income statistics show that income of 18-25-year-olds have increased by 10 percent over the last year.

  Statements regarding bond trading is incorrect

Which of the following statements regarding bond trading is INCORRECT? The long-term bonds issued by the U.S. government are called Treasury Bills.

Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd