Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

1) After graduating from graduate school you create it big—all because of your success in financial management. You make a decision to award a scholarship for needy finance students that will give $3,000 per year indefinitely, beginning one year from now. How much should be deposited today to fund scholarship fund under given conditions?

a) The interest rate is 10% compounded annually.

b) The interest rate is 8% compounded annually.

c) For both 10 and 8%, if everything remains same except that first disbursement will not be made until three years from now.

2) Winery requires $500,000 for expansion of its warehouse. Company plans to finance $100,000 with internally generated funds but desires to secure the loan for remainder. The contracting firm’s finance subsidiary has presented to give the loan based on 6 annual payments of $97,300 each. Alternatively, San Jose Winery’s bankers will lend firm= $400,000, to be repaid in annual instalments (covering both principal and interest), at the 15 percent interest rate. Ultimately, the insurance firm would also loan money; it needs a lump sum payment of $750,000 at end of 6 years.

a) Based on respective annual percentage cost of 3 loans (you should present each effective interest rate), which one must San Jose choose? In case of 2nd loan by firm’s bankers, what would be dollar value of annual payment?

b) What other considerations might be significant in addition to cost?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M915193

Have any Question? 


Related Questions in Basic Finance

Consider a projects incremental cash flows in order -700

Consider a project's incremental cash flows in order: -$700, $400, $300, $400. Assume a cost of capital of 7%. How does the NPV that you get by using Excel's NPV function all by itself compare to the correct NPV for this ...

During 2015 rainbow umbrella corp had sales of 920000 cost

During 2015, Rainbow Umbrella Corp. had sales of $920,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were $610,000, $125,000, and $155,000, respectively. In addition, the company ...

The text discusses the trade-off between internal and

The text discusses the trade-off between internal and external validity, known as the experimenters dilemma. Speculate on things a researcher can do to increase internal and external validity simultaneously, thereby desi ...

1nbspcalculate the cost of new common equity financing of

1. Calculate the cost of new common equity financing of stock R using Gordon Model Round the answers to two decimal places in percentage form (Write the percentage sign in the "units" box) Last Year Dividend Growth Rate ...

The rothmueller museumnbspanswer the required questions at

The Rothmueller Museum:  Answer the "Required" questions at the end of page 2.  Use the below to assist you in answering. Make sure to show all work when applicable. In 1928, Francis P. Rothmueller, a Northwest railroad ...

State and explain two reasons why firms hedge a major bread

State and explain two reasons why firms hedge? A major bread maker is planning to purchase wheat in the near future. Identify and explain the appropriate hedging strategy? Explain how the implied repo rate on a spread tr ...

1 list in order the major sections that all research papers

1. List in order the major sections that all research papers must have. 2. What is the purpose of the introduction of a paper? 3. When presenting the results of statistical analyses, what information should be presented? ...

1a how does a company become exposed to interest rate riskb

1.(a) How does a company become exposed to interest rate risk? (b) How does a bank become exposed to interest rate risk? 2 .How might a company attempt to reduce interest rate risk? 3. How might a bank attempt to reduce ...

Assignment 1 - mini case amgen corporationthe amgen

Assignment 1 - MINI CASE: AMGEN CORPORATION The Amgen Corporation spent several years working on developing a product that can be used to provide a healthy supplement to a variety of food products.  The benefits of a new ...

Ideas for future research studies often can be obtained

Ideas for future research studies often can be obtained from the discussion sections of research reports. Occasionally, the researchers provide explicit suggestions for new research studies. At other times, the suggestio ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen