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The DCFs is the net-present-worth (or net-present-value) (NPW or
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- Write the equation for Net-Present-Worth Criterion?C = $400 + 0.9YD If disposable income = $5,000, then the value of consumption (C) isThis year is 2023. You have saved $20,000 in your savings account to buy a new home. In addition, you also plan to withdraw the maximum from your Registered Retirement Savings Account (RRSP) under the Home Buyer's Plan (HBP). What would be the minimum conventional mortgage you could assume? Select one: a. $220,000 b. $140,000 c. $175,000 d. $225,000
- True or false: Investors and lenders are the same group of peopleBank Three has equity = $250 million, return on equity (ROE) = 15%, interest expense = $105 million, provision for loans (P) = $30 million, noninterest income = $45 million, noninterest expense = $20 million and a tax rate = 34%. What is the total interest income required? $216.82 million. $236.82 million. $146.82 million. $166.82 million.Problem 8 is this: Your factory has been offered a contract to produce a part for a new printer. The contract would be for three years and your cash flows from the contract would be $5 million per year. Your up-front setup costs to be ready to produce the part would be $8 million. Your cost of capital for this contract is 8%. a. What does the NPV rule say you should do? b. If you take the contract, what will be the charge in the value of your firm? I have to answer this question: Does the IRR rule agree with the NPV rule in problem above? Show me the steps if whether the IRR rule agrees with NPV rule
- Describe the procedure that outlines the steps for determining the IRR for a mixed investment?Saving is that part of income which is not consumed. True/FalseB. Critically compare the principles of the IRR and net present value methods including their advantages and disadvantages. Relate the answer to the above cas
- Most businesses would probably not undertake investment projects for which the expected rate of profit were Multiple Choice greater than the going interest rate. one percent more than the going interest rate. equal to or less than the going interest rate. less than the going interest rate.Suppose Neha is a sports fan and buys only baseball caps. Neha deposits $3,000 in a bank account that pays an annual nominal interest rate of 5%. Assume this interest rate is fixed—that is, it won't change over time. At the time of her deposit, a baseball cap is priced at $10.00. Fill in the chart: 0% 5% 8% Number of Caps Neha Can Purchase after One Year Choices: 291, 305, 315, 582 Choices: 291, 300, 305, 582 Choices: 291, 305, 315, 582 Real Interest Rate When the rate of inflation is less than the interest rate on Neha's deposit, the purchasing power of her deposit __________ (options: falls, rises, remains the same) over the course of the year.The disposable income from your part-time job in 2019 was $18,800. In 2018, you borrowed $700 at 14 percent interest. You repaid your loan with interest in 2019. How much would you have available for spending in 2019? (Do not round intermediate calculations.)