institutions, financial instruments and financial markets. Financial institutions are classified into five categories according to where they source their funds from and who uses their funds. These include: depository financial institutions e.g. banks; investment and merchant banks; contractual savings institutions e.g. insurance companies; finance companies and general financiers; unit trusts e.g. property trusts. Financial instruments are documents that entitle holders to future cash flows. They are classified
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1 . A firm has the opportunity to invest in a project having an initial outlay of $20,000. Net cash inflows (before depreciation and taxes) are expected to be $5,000 per year for five years. The firm uses the straight-line depreciation method with a zero salvage value and has a (marginal) income tax rate of 40 percent. The firm’s cost of capital is 12 percent. a. Compute the internal rate of return and the net present value. a. NINV = $20,000 and NCF = (5000 4000)(1 .4) + 4000 = $4600/year
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rate is 4% Discussion Guideline: 1. What is the dilemma faced by the management of Laurentian Bakeries? 2. Comment on the Laurentian Bakeries’ ‘Project Review Process’. Is it a sound process? 3. What are the alternative investment opportunities? Why are those alternatives not chosen? 4. Comment on the expected incremental sales level (e.g. certainty level). 5. How would you incorporate the following information in your analysis? i. Sales price with inflation. ii.
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A COMPARATIVE ANALYSIS OF VARIOUS INVESTMENT AVENUES WITH RESPECT TO RISK & RETURN A Project Report Submitted in partial fulfillment of the requirements for the Award of Degree of E-MBA Submitted by : Prabhjeet Singh [pic] BHARATI VIDYAPEETH DEEMED UNIVERSITY, PUNE (INDIA) School of Distance Education (SDE) Academic Study Center : BVIMR, New Delhi (University established under 3 of the UGC act,1956) CONTENTS |S.No |
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Jabari Williams Professor Houston English 102 25 January 2011 Social Security-Privatize or Not? Should Social security be privatized? In order to understand if it is good for the masses, you must understand what it is. It is not an investment plan or tool, it is a retirement program. The program is designed to supply a safety net to protect workers and families in the occasion of retirement, disability, and
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the corporation finance specialist concerned with the techniques of financing firms so as to ensure their survival and growth; (2) the managerial economist concerned with capital budgeting; and (3) the economic theorist concerned with explaining investment behavior at both the micro and macro levels.' In much of his formal analysis, the economic theorist at least has tended to side-step the essence of this cost-of-capital problem by proceeding as though physical assets-like bonds-could be regarded
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Investment Choices By Karl Preissner, Xavier University Business Stats 500 Project Winter 2011 Problem Description This paper concerns a simple question, “What’s the best way to invest my money when presented with 13 alternative opportunities?” In this case, we’ll assume our investment goal is to maximize return while simultaneously minimizing the risk of loss. Since we cannot invest backwards in time, we need to develop an expectation for the future performance of our opportunities in
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Capital Budgeting Techniques | | GLOSSARY Capital Budget: (1) The amount of money set aside for the purchase of fixed assets (e.g., equipment, buildings, etc.). Also, (2) a request for authorization to purchase new fixed assets. Mutually Exclusive Proposals: Consideration of two or more assets that perform the same function. If one is chosen for purchase, the others are automatically rejected. Profitability Index: A ratio of the present value of the benefits (PVB) to the present value
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Selected Answer: | the capital gain yield during the period, plus the dividend yield. | Correct Answer: | the capital gain yield during the period, plus the dividend yield. | | | | | * Question 5 1 out of 1 points | | | An investment provides a 1.25% return quarterly, its effective annual rate isAnswer | | | | | Selected Answer: | 5.09%. | Correct Answer: | 5.09%. | | | | | * Question 6 1 out of 1 points | | | What has been the relationship between
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sixty percent (60%) of the voting stocks in a rural bank. The percentage of foreign-owned voting stocks shall be determined by the citizenship of the individual or corporate stockholders of the rural bank.” In allowing the assistance of foreign investments in Philippine rural banks, said banks are put in a better financial position to serve its clients through upgraded banking services. The Republic Act No. 10574 – which amends “The Rural Bank Act of 1992” (Republic Act No. 7353) – provides rural
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