What will be your cash flow at the end of the year

Assignment Help Financial Management
Reference no: EM131048634

Suppose that you buy a TIPS (inflation-indexed) bond with a 1-year maturity and a coupon of 4% paid annually. Assume you buy the bond at its face value of $1,000, and the inflation rate is 8%

What will be your cash flow at the end of the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

What will be your real return? (Enter your answer as a whole percent.

What will be your nominal return? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Reference no: EM131048634

Questions Cloud

Determine the two manometer readings h and h : Determine the two manometer readings, h and H. (ANS: 0; 0.252 ft)
Appropriate statistical analyses using spss : With your health topic and data set in mind, and the instructor feedback you received on your proposed methods, conduct the appropriate statistical analyses using SPSS and review the output obtained. Reflect on the significance of the results. Be ..
Find the trade discount amount and the net price : The list price of a smartphone is $384. A local Verizon dealer receives a trade discount of 23%. Find the trade discount amount and the net price.
Outcome of an investigation regarding allegations : As an outcome of an investigation regarding allegations that Fred Staid and a couple other men in the delivery section had been harassing a coworker, Tamiko Timid, Joe instituted corrective action and counseled the men regarding appropriate behavi..
What will be your cash flow at the end of the year : Suppose that you buy a TIPS (inflation-indexed) bond with a 1-year maturity and a coupon of 4% paid annually. Assume you buy the bond at its face value of $1,000, and the inflation rate is 8% What will be your cash flow at the end of the year? What w..
What is the yield to maturity if the bond is selling : A 30-year maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8%. What is the yield to maturity if the bond is selling for $900? What is the yield to maturity if the bond is selling for $1,000?
Discuss the periodic acid-schiff reaction stain : Discuss the Periodic Acid-Schiff Reaction stain, its initial development and creator, the diagnostic niche it fills, its cost and benefit to the community, and the chemical reactions of the stain.
Case study-seat of the pants : Gaurav cleaning centers doesn't have a formal wage structure nor does it have rate ranges or use compensable factors. Wage rates are based mostly on those prevailing in the surrounding community and tempered with an attempt on the part of Gaurav t..
Recall the st petersburg game : Recall the St. Petersburg game. It starts at $2. Toss a coin and if a head appears, the pot doubles. If tails appears, you win the pot at that time and the game ends. So, if you get H, H, H T, you win $16. The payoff table is,

Reviews

Write a Review

Financial Management Questions & Answers

  An investment offers a total return

An investment offers a total return of 14 percent over the coming year. Bill Bernanke thinks the total real return on this investment will be only 8.6 percent.

  Modigliani miller model with corporate taxes

The main difference between MM II (Modigliani Miller Model with Corporate Taxes) and Miller Model with Corporate and Personal Taxes is:

  What is the monthly mortgage payment

What is the Monthly Mortgage Payment for a 15-yr fixed rate mortgage with an interest rate of 3.00%, 1 point and $2000 in fees on a home with a value of $225,000 and an LTV of 93%?

  An environmental engineering firm

Anion, an environmental engineering firm, is trying to be eco-friendly in acquiring an automobile for general office use. It is considering a gasoline-electric hybrid and a gasoline-free all-electric hatchback. which automobile is the better option o..

  What is the meaning of mutually exclusive events

What is the meaning of mutually exclusive events? What is meant by collectively exhaustive? In your responses, please give an example of each.

  Equivalent annual savings-straight-line depreciation

Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $120,000 and sell its old low-pressure glueball, which is fully depreciated, for $20,000. What is the equivalent annual savings from the purchase..

  Merger valuation-what is the value of its tax shields

Hastings Corporation is interested in acquiring Vandell Corporation. Vandell has 1 million shares outstanding and a target capital structure consisting of 30% debt. Vandell's debt interest rate is 7.8%. What is the value of its tax shields? What is t..

  Determine the joint probability of each given scenario

Determine the net present value (NPV) of the project in each of the four possible scenarios. Determine the joint probability of each scenario. Compute the expected NPV of the project and make a recommendation to Monk regarding its feasibility.

  About the accounts payable

A chain of appliance stores, APP Corporation, purchases inventory with a net price of $200,000 each day. The company purchases the inventory under the credit terms of 2/15, net 30. APP always takes the discount, but takes the full 15 days to pay its ..

  Find the present value of these cash flows

You have accumulated some money for your retirement. You are going to withdraw $92386 every year at the beginning of the year for the next 16 years starting from today. Your account pays you 4.07 percent per year, compounded annually. How much money ..

  What is the first years free cash flow

Continuing from Problem 1, at the end of the first year, Chemtec is expecting sales of $250 million and costs of $125 million. There are no more required investments in either net working capital or plant and equipment. Assuming that all of these cas..

  Expansion project-requires initial fixed asset investment

Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.55 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be wort..

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