Blog

Fancy Cat Products has a project that will cost $254,000 today and will generate monthly cash flows of $5,460 for the next 65 months. What is the rate of return of this project when expressed as an APR?

You just paid $465,000 for a policy that will pay you and your heirs $19,100 per year forever with the first payment in one year. What rate of return are you earning on this policy?

A 17-year, semiannual coupon bond sells for $1,008.82. The bond has apar value of $1,000 and a yield to maturity of 6.63 percent. What is the bond’s coupon rate?

You are examining a company’s balance sheet and find that it has total assets of $21,156, a cash balance of $2,424, inventory of $5,169, current liabilities of $6,341, and accounts receivable of $2,935. What is the company’s net working capital?

A bond has a par value of $1,000, a current yield of 6.89 percent, and semiannual coupon payments. The bond is quoted at 95.32. What is the coupon rate of the bond?

You want to purchase a new motorcycle that costs $26,800. The most you can pay each month is $530 over the life of the 72-month loan. What is the highest APR that you could afford?

General Importers announced that it will pay a dividend of $3.60 per share one year from today. After that, the company expects a slowdown in its business and will not pay a dividend for the next 7 years. Then, 9 years from today, the company will begin paying an annual dividend of $1.70 forever. The required return is 11.3 percent. What is the price of the stock today?

Elena receives $450 on the first of each month. Harley receives $450 on the last day of each month. Both Elena and Harley will receive four years of payments. If the discount rate is 9.5 percent, what is the difference in the present value of these two sets of payments?

You grandfather invested $16,600 years ago to provide annual payments of $700 a year to his heirs forever. What is the rate of return?

For the past year, Momsen Limited had sales of $44,237, interest expense of $2,996, cost of goods sold of $14,734, selling and administrative expense of $10,721, and depreciation of $4,820. If the tax rate was 21 percent, what was the company’s net income?