American InterContinental University FINA310-1301A-02: Professor Michael James March 5, 2013 Abstract This assignment will use the CGM and the CAPM to calculate some information regarding the XYZ stock market. XYZ Stock Market Information Krf=2% XYZ’s beta =1.64 XYZ’s current annual dividend = $.80 XYZ’s 3-year dividend growth rate (g) = 8.2% Industry P/E = $4.87 KS= (Risk Free Rate) + Beta (Market Premium) KS= (0.2) + 1.64 (.075) KS= (0.2) +
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Please answer all questions. Show all your work. Each question has a different point value. PROBLEM 1 (2 points) | | | | | | | Find the following values for a lump sum assuming annual compounding: | | a. The future value of $500 invested at 8 percent for one year | | | b. The future value of $500 invested at 8 percent for five years | | | c. The present value of $500 to be received in one year when the opportunity cost rate is 8 percent | d. The present value of $500 to be
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Stryker corp case study Stryker choose to manufacture its own PCB in its own facility. ... cash flows for the PCB project, as well as its NPV, IRR, and payback period. ... Option #2 was to establish a partnership with one single company, which was one of . In 2003, the Stryker Corporation is contemplating a change in their sourcing strategy for printed circuit boards (PCBs), which are used in many of their instruments. Recently, Stryker's suppliers of PCBs have become less reliable. They
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47 c. 8,500.00 and 7,244.57 d. 8,544.47 and 7,700.00 2) You invest $1,234.56 at 5% compounded annually. How many years will it take to triple your money? a. 18.85 b. 22.52 ** c. 14.21 d. 28.41 3) You want to buy a new car but you will need to obtain a bank loan to do so. You can afford up to $400 per month in loan repayments. Your bank will lend you money at a stated rate of 9% with monthly compounding. If you can make monthly payments at the end of each month for five years, what is the most expensive
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BSA 2-14 Group 6 : Time Value of Money Quiz 1-2 .What are the two basic types of annuities? 3. What type of basic annuity is always greater in value (present or future) of an identical situation? Problems (3pts each) 1.Find the future value of an annuity of Php 500.00 payable at the end of each 3 months for 8 years, if money is worth 12%, compounded quarterly. 2.A fund is to be formed by the costing Php 5000.00 at the beginning of each3 months for 8 ½ years . If money is worth 10% compounded
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A project with a positive NPV is believed acceptable. The higher the NPV, the better the project. Also, it is a good method to evaluate the project because it takes all the relevant costs in account and gives explicit consideration to the time value of money. Fourth, the internal rate of return (IRR) is greater than 10%. This criterion is defined as being the discount rate at which the NPV was zero, in other words, it tests the breakeven point. It is important because it assesses the profitability
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the same resources. A common method for evaluating a hurdle rate is to apply the discounted cash flow method to the project, which is used in net present value models. The hurdle rate determines how rapidly the value of the dollar decreases out in time, which, parenthetically, is a significant factor in determining the payback period for the capital project when discounting forecast savings and spending back to present-day terms. Most companies use a 12% hurdle rate, which is based on the fact that
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Club IT, Part III NAME School Club IT is a nightclub owned by Lisa Tejada and Ruben Keys. Club IT has been successful so far; indeed, Club IT has retained and even increased it niche customer base. Club IT is generally busy in the evenings; the customers eat, drink, and having fun. Lisa and Ruben have decided to expand their business; more specifically, they would like to implement an information system that will increase the clubs profitability and its customer’s satisfaction as well
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included · Depreciation is a non cash expense. However, the tax effect of the same should be considered if tax rates are applicable · Second step is to discount the cash flows using an appropriate discounting rate considering the time value of money. · Finally, the best alternative is chosen after considering the following non-quantitative factors. Other outside factors: Other qualitative factors to be kept in mind by the manager are the following: Employee morale – in case
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Finance FIN 1103 Week 1 Individual Work Perform Time Value Money Calculations Assignment Instructions To complete this assignment: 1. Answer all of the questions below in the space provided. 2. Reflect on the information presented in this week’s lesson and provide an insightful response to each question writing no more than two paragraphs. Save and Submit to Dropbox 1. Save your work as a Microsoft Word 2010 (.docx) file that includes your name, course code, and title in the file
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