Question 1:
Compare and evaluate in 500 words or more qualitative v quantitative risk assessment
Write in essay format not in bulleted, numbered or other list format.
Reply to two classmates’ posting in a paragraph of at least five sentences by asking questions, reflecting on your own experience, challenging assumptions, pointing out something new you learned, offering suggestions. These peer responses are not ‘attaboys’. You should make your initial post by Thursday evening so your classmates have an opportunity to respond before Sunday.at midnight when all three posts are due.
It is important that you use your own words, that you cite your sources, that you comply with the instructions regarding length of your post and that you reply to two classmates in a substantive way (not ‘nice post’ or the like). Your goal is to help your colleagues write better. Do not use spinbot or other word replacement software. It usually results in nonsense and is not a good way to learn anything. . I will not spend a lot of my time trying to decipher nonsense. Proof read your work or have it edited. Find something interesting and/or relevant to your work to write about. Please do not submit attachments unless requested.
(500-550 words in word document with references 6 years or less old)(Please follow APA format) Please 3 references from journals or books will be appreciated. Write everything in own words.
Question 2:
1) Please explain why bond prices are subject to changes in interest rates.
2) Describe the characteristics of a bond and provide an example of a firm or government entity that has recently issued (sold) these securities.
(500-550 words in word document with references 6 years or less old)(Please follow APA format) Please 3 references from journals or books will be appreciated. Write everything in own words.
Question 3:
chapter 9
15: Project Evaluation. Kinky Copies may buy a high-volume copier. The machine costs $100,000 and this cost can be fully depreciated immediately. Kinky anticipates that the machine actually can be sold in 5 years for $30,000. The machine will save $20,000 a year in labor costs but will require an increase in working capital, mainly paper supplies, of $10,000. The firm’s tax rate is 21%, and the discount rate is 8%. What is the NPV of this project?
17: 17. Project Evaluation. Ilana Industries Inc. needs a new lathe. It can buy a new high-speed lathe for $1 million. The lathe will cost $35,000 per year to run, but it will save the firm $125,000 in labor costs and will be useful for 10 years. Suppose that, for tax purposes, the lathe is entitled to 100% bonus depreciation. At the end of the 10 years, the lathe can be sold for $100,000. The discount rate is 8%, and the corporate tax rate is 21%. What is the NPV of buying the new lathe?
Chapter 6
- Financial Pages. Turn back to Table 6.1. (LO6-1) a. What is the current yield of the 4.75% 2041 maturity bond? What is its yield to maturity? b. “The current yield is less than the yield to maturity whenever the bond price is greater than the face value.” True or false?
- Bond Yields. A 30-year Treasury bond is issued with face value of $1,000, paying interest of $60 per year. If market yields increase shortly after the T-bond is issued, what happens to the bond’s: (LO6-1) a. coupon rate? b. price? c. yield to maturity? d. current yield?
- Bond Yields. If a bond with face value of $1,000 and a coupon rate of 8% is selling at a price of $970, is the bond’s yield to maturity more or less than 8%?
- Bond Pricing. A General Power bond carries a coupon rate of 8%, has 9 years until maturity, and sells at a yield to maturity of 7%. (Assume annual interest payments.) a. What interest payments do bondholders receive each year? b. At what price does the bond sell? c. What will happen to the bond price if the yield to maturity falls to 6%? d. If the yield to maturity falls to 6%, will the current yield be less, or more, than the yield to maturity?
- Bond Yields. A bond has 8 years until maturity, has a coupon rate of 8%, and sells for $1,100. a. What is the current yield on the bond? b. What is the yield to maturity if interest is paid once a year? c. What is the yield to maturity if interest is paid semiannually?
Sample Solution
