a) How can the RBA and Australian government expand the Australian economy when the cash rate is 0.25%pa? Explain your answer in words. (5 marks)
b) Should we be concerned if Australia is on a course towards negative nominal interest rates? Explain your answer in words. (10 marks)
100% (1 rating)Introduction Current account deficit occurs when the export fall below import. Explanation Suppose if the economy of Australia is running a current account deficit Bank of Australia should want to adopt expan…View the full answer
Expected Cash Flows from Real Estate Investments Assignment | Homework For You high school essay help
O management fee. O back-end load. transaction fee. 12b-1 fee o low-load.
QUESTION 16 Expected cash flows from real estate investments are determined by
O rent. depreciation. taxes. all of these. O none of these.
QUESTION 19 Which of the following are characteristic of exchange-traded mutual funds?
Traded on listed exchanges o Closed-end funds Generally organized as sector funds Actively managed funds All of these
QUESTION 20 A downside of investing in income property is O depreciation.
o appreciation in value. low degree of financial leverage high taxes. maintenance costs. Get Finance homework help today
Cash Flows of the Project Assignment | Homework For You high school essay help
Consider Australia running a current account deficit a) How can the RBA and Australian government expand
Bottoms Up Diaper Service is considering the purchase of a new industrial washer. It can purchase the washer for $9,000 and sell its old washer for $2,200. The new washer will last for 6 years and save $2,700 a year in expenses. The opportunity cost of capital is 19%, and the firm’s tax rate is 21%.
a. If the firm uses straight-line depreciation over a 6-year life, what are the cash flows of the project in years 0 to 6? The new washer will have zero salvage value after 6 years, and the old washer is fully depreciated. (Negative amounts should be indicated by a minus sign.)
b. What is project NPV? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
c. What is NPV if the firm investment is entitled to immediate 100% bonus depreciation? (Do not round intermediate calculations. Round your answer to 2 decimal places.)Get Finance homework help today
Annual Depreciation Expense Assignment | Homework For You high school essay help
Fresno Furniture Manufacturing Inc. currently earns annual revenues of $700,000 and incurs total operating expenses (excluding depreciation and interest expense) of 45.00% of revenues. Its earnings are taxed at a rate of 40%.
Today, its budgeting committee is evaluating the purchase of a new lathe. The lathe is expected to cost $75,000, plus $4,000 in freight and setup expenses, and will be depreciated using straight-line depreciation. It is expected that the lathe will have a useful life of five years and a salvage value equal to 25.00% of its purchase price of $75,000. It is expected that the lathe will be sold for its book value, such that no capital gain or loss will be realized.
It is further expected that the lathe will cause a 20.00% increase in the firm’s annual sales and total operating expenses (excluding depreciation and interest expense). If the lathe is purchased, the firm will require an additional $10,000 in net working capital (NWC).
Given this information, complete the following analysis:
What is the annual depreciation expense for the lathe? What is the net investment (NINV) of the investment?
What are the net annual operating after-tax cash flows associated with this project?
What is the project’s last year (terminal) cash flow?.Get Finance homework help today
Return on Equity Assignment | Homework For You high school essay help
spartacus inc., has sales of $4,500,000 net income of $250,000, assets worth $3,700,000 and total common stockholder equity of $2,500,000. the ROE for Spartacus is ______.Get Finance homework help today
Option of Hedging Assignment | Homework For You high school essay help
. As a US exporter, we have the option of hedging with forwards, options, or not hedging. The size of the transaction is 3.04 million Australian $. The current Exchange Rate is .7400-05 AUDUSD, and the 3 month forward Rate is .7500-05 AUDUSD. Australian Dollar options with an exercise price of .75 sells for a price of $.05 for calls and $.04 for puts. There are 100,000 Australian dollars in 1 option contract.
In 3 months when the transaction occurs, the final exchange rate is .700-02 AUDUSD, and option prices are .00 for calls and .10 for puts. (10)
a) How much would you receive/pay if you had hedged with forwards?
b) How much would you receive/pay if you had hedged with options?
c) How much would you receive/pay if you had not hedged?
d) Rank them. Get Finance homework help today
Bond’s Coupon Rate Assignment | Homework For You high school essay help
A U.S. corporate issued bond is currently trading for $932. Which of the following statements are either likely or certainly true? (choose all that apply):
1) The bond’s coupon rate is higher than its YTM.
2) The bond’s coupon rate is lower than its YTM.
3) The bond’s face value is $1000.
4) The bond pays interest semiannually.
5) This bond would be considered a discount bond at this time.
6) This bond would be considered a junk bond at this time.
7) This bond has just been issued. Get Finance homework help today
Change in the Bond’s Price Assignment | Homework For You high school essay help
A corporate bond with a coupon rate of 6.6 percent has 12 years left to maturity. It has had a credit rating of BBB and a yield to maturity of 7.3 percent. The firm has recently gotten into some trouble and the rating agency is downgrading the bonds to BB.
The new appropriate discount rate will be 8.6 percent. (Assume interest payments are semiannual.) points
What will be the change in the bond’s price in dollars? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)
What will be the change in the percentage? (Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.) Change in bond percent. Get Finance homework help today
Duration of Coupon Bond Assignment | Homework For You high school essay help
1. calculate the duration of a 2-year 8% semiannual coupon bond, assume that the current ytm is 10%. 2. suppose that the interest rate increase by 1 percentage point. how does the price change according to duration? How does the price actually change? What is causing the difference. Get Finance homework help today
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