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The document contains calculations to solve multiple quantitative problems. It first calculates the present value of an asset generating $150,000 income annually for 5 years with a 9% opportunity cost as $583,448. It then provides revenue, cost, marginal benefit, and marginal cost equations and calculates the net for quantities of 1 and 5. Finally, it presents the formula to calculate the present value of a firm with current profits of $550,000 growing at 5% annually with an 8% opportunity cost.
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.075 = k
k = 7.5% annual return
Therefore, the annual return on this investment is 7.5%
Solving for k
Example: You invest $1,000 today and want it to grow to
$1,500 in 5 years. What rate of return is needed?
0 1 2
$1,000 $1,500
Time value of money
The document discusses time value of money concepts like present value, future value, present value of annuity, and future value of annuity. It provides formulas to calculate these values and includes examples showing how to apply the formulas to calculate PV, FV, PVA and FVA given cash flows, interest rates, and time periods. Sample questions are included along with step-by-step solutions demonstrating the calculations.
CA NOTES ON RISK, RETURN AND PORTFOLIO PRACTICALS OF STRATEGIC FINANCIAL MODE...
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CPT Company Accounts-Revision MCQs
This document provides multiple choice questions and solutions related to company accounts. It covers topics like shareholders' equity, issue and redemption of shares, debentures, preference shares, dividends, and balance sheets. For example, it explains how to calculate the amount of dividend payable based on the proposed dividend rate and called-up equity share capital. It also shows calculations for determining the number of equity shares to be issued to raise funds for redeeming preference shares.
Chapter 9
This document contains solutions to problems involving capital budgeting techniques. Problem P9-11 involves calculating the internal rate of return (IRR) for three projects - Project A has an IRR of 17%, Project B has an IRR between 8-9% (calculator solution of 8.62%), and Project C has an IRR between 25-26% (calculator solution of 25.41%). The IRR is the discount rate that makes the net present value of cash flows equal to zero. It is found by iteration or using a financial calculator.
Pay back period ..chapter solution to problems...
This document contains solutions to problems involving capital budgeting techniques. Problem P9-11 involves calculating the internal rate of return (IRR) for three projects - Project A has an IRR of 17%, Project B has an IRR between 8-9% (calculator solution of 8.62%), and Project C has an IRR between 25-26% (calculator solution of 25.41%). The IRR is the discount rate that makes the net present value of cash flows equal to zero. It is used to evaluate mutually exclusive projects and determine the maximum cost of capital for project acceptability.
Chapter 11
The document contains solutions to problems related to calculating the cost of capital, including the cost of debt using both the net present value and yield-to-maturity methods, the cost of preferred stock, the weighted average cost of capital using both book and market weights, and the effect of tax rates on the WACC. It also covers the capital asset pricing model for calculating the cost of common equity. The problems provide examples of calculating costs of different sources of capital and determining the WACC for companies based on their capital structure.
Chapter 14costo de oprtunidad
This document discusses replacement decisions and economic analysis concepts. It provides examples of:
1) Calculating annual equivalent costs and present worth for replacement decisions involving multiple cash flows over time.
2) Comparing alternative replacement options based on their annual equivalent costs to determine the better option.
3) Determining the economic service life of equipment by identifying the number of years providing the maximum positive annual equivalent value.
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Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
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Chapter 1 sp
- 1. Q2. The maximum amount we need to pay for an asset that generates an income of $150,000 for a period of five years if the opportunity cost of using fund is 9% is PV = 150,000 + 150,000 + 150,000 + 150,000 + 150,000 (1+0.09) (1+0.09)2 (1+0.09)3 (1+0.09)4 (1+0.09)5 = $583,448.00 Q3. B(Q) = 150 + 28Q – 5Q2 C(Q) = 100 + 8Q MB(Q) = 28 – 10Q MC(Q) = 8 N(Q) = B(Q) – C(Q) N(Q) = 50 + 20Q -5(Q)2 When Q = 1 N(Q) = 65 When Q = 5 N(Q) = 25
- 2. Q4. The value of the firm if the current profits are $550,000 with expected to grow indefinitely at a constant annual rate of 5% and opportunity cost of fund is 8%. PVfirm = Π0