Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, Sotheby's sold the Edgar Degas bronze sculpture Petite Danseuse de Quatorze Ans at auction for a price of $10,321,500. Unfortunately for the previous owner, he had purchased it in 1998 at a price of $12.397.500. What was his annual rate of return on this sculpture? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Q: Suppose that $ 2,500 is set aside each year and invested in a savings account that pays 8%…
A: The FV of an investment refers to the combined value of the cash flows of the investment at a…
Q: XYZ's stock price and dividend history are as follows: Beginning-of- Dividend Paid Year Price at…
A: The average return on a stock is calculated using the arithmetic return and the geometric return is…
Q: A bond has a $1,000 par value, 7 years to maturity, and a 9% annual coupon and sells for $1,095.…
A: A bond is a financial security that is sold by large entities to borrow funds. Generally, it is…
Q: Five years ago, Matthew borrowed $280,000 to purchase a house in Sandy Lake. At the time, the quoted…
A: Mortgage refers to a covered loan that is borrowed for the purchase or maintenance of a property…
Q: A Tediore Industries bond has an 7,5 percent coupon rate and a $1,000 face value. Interest is paid…
A: Here,Coupon rate is 7.5%Face Value of Bond is $1,000Compounding Period (m) is Semi Annual i.e…
Q: 1. Determining a Refund or Taxes Owed. Based on the following data, will Ann Wilton receive a…
A: > Given data:> Net income = 48190>Deductions to determine net income = 11420
Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…
A:
Q: Which of the following factors tend to increase a company's P/E (price- to-earnings) ratio? Lower…
A: The P/E ratio, or Price-to-Earnings ratio, is a financial metric that represents the valuation of a…
Q: For a quoted annual interest rate of 5% with daily compounding, find the effective (i) annual rate,…
A: Present value refers to the current value of the annuity that is determined by discounting the cash…
Q: classic car was for sale with a current asking price of $45,000. If a return of 8.5%, compounded…
A: Prices tends to increase with time due to interest and inflation due to the compounding of the that…
Q: You are an analyst working for Goldman Sachs, and you are trying to value the growth potential of a…
A: To calculate the present value of all future growth opportunities for Big Industries, use the…
Q: Esfandairi Enterprises is considering a new 3-year expansion project that requires an initial fixed…
A: Time = t = 3 YearsInitial Cost = i = 2.3 millionSales = s = $1,720,000 Cost = c = $630,000Tax rate =…
Q: MBW Company had 500 million shares outstanding, a share price of 17 36 SAR, a book value of debt of…
A: Enterprise value = value of equity + value of debt - cash balance
Q: You are an analyst working for Goldman Sachs, and you are trying to value the growth potential of a…
A: Data given:Initial investment=$10.1 millionAnnual profits in perpetuity=$1.08 millionGrowth…
Q: Costs associated with the manufacture of miniature high-sensitivity piezoresistive pressure…
A: Present worth is a financial concept used to determine the current value of future cash flows. It…
Q: Jamie Wong is thinking of building an investment portfolio containing two stocks, L and M. Stock L…
A: Since you have posted a question with multiple sub parts, we will be able to provide the solution…
Q: Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the…
A: Year 1 current rate = R1Year 1 current rate= 6.00%Year 2 current rate = [{(1+R1)*…
Q: Nonconstant Growth Stock Valuation Assume that the average firm in your company's industry is…
A: Value of the stock can be determined by calculating the present value of the dividend and present…
Q: 3. follows: Carnegie Corp. projects an annual cash flow for one of its divisions as Year 0 1 2 3 4 5…
A: AB2YearCash flow30341052-1063274285296210IRR of the cash flow9.59%=IRR(B3:B9)
Q: Annual and Average Returns for Stocks, Bonds, and T-Bills, 1950 to 2019 Long-Term Treasury Bonda…
A: The portfolio return is the weighted average of returns of individual assets. The average portfolio…
Q: payments for an expected 4 years. If rates are assumed to be 5% compounded monthly, how large will…
A: Using time value of money concepts, we can determine the monthly payments.
Q: Assume you purchased the right to sell 2,000 shares of Target stock in March 2022 at a strike price…
A: Put option gives the opportunity to sell the stock on expiration but there is no obligation to do…
Q: The excel version is available as an attachment to this assignment for additional analysis. Years…
A: Bonds are the financial debt instruments which are issued by the financial institutions to raise…
Q: A 5%-coupon, interest-only, 30-year Treasury Bond is an asset that makes semiannual payments (that…
A: Time to Maturity = 30 YearsPayment Frequency = Semi-annuallyPayment Amount = $25Annual Opportunity…
Q: You would like to buy a house that costs $350,000. You have $55,000 in cash that you can put down on…
A: Mortgage refers to a covered loan that the borrower requires to purchase or maintain a property with…
Q: You are an analyst working for Goldman Sachs, and you are trying to value the growth potential of a…
A: Future opportunities are those opportunities that are going to generate benefits in the future for…
Q: Required: Suppose you conduct currency carry trade by borrowing $1 million at the start of each year…
A: A currency carry trade is a strategy in which an investor borrows in a low yielding currency and…
Q: You are late paying a bill for $10,649.04. You have made arrangements to pay off the bill in…
A: Present Value = pv = $10,649.04Monthly Payment = p = $260Interest Rate = r = 1.5%
Q: n't provide handwritten solution. Your company is planning to borrow $2 million on a 5-year,…
A: A loan refers to a contract between two parties where one of the parties forwards money to the other…
Q: (a) You purchased a rental property for K50 000 and sold it one year later K55 000. At the time of…
A: Variables in the question:Purchase price of property= K50 000Sale price =K 55000Commission paid=K2…
Q: Intro Income statement for 2016 (in $) 2016 Sales 400,000 Costs (incl. depr.) 280,000 EBIT 120,000…
A: Income Statement is a financial statement. which is prepared in every organization. It helps in…
Q: The interest rate on five-year Treasury bonds is 3.1 percent, the rate on six-year T-bonds is 2.9…
A: Expectation theory implies that investor is independent to invest in short, medium or long term…
Q: 15.Firm UUU earns $0.1 in profit on every $1 of sales, has $1.2 in assets for every $1 of sales and…
A: Internal growth is the growth that can obtained through internal earnings that is retained earnings…
Q: For 2015, Walmart and Target had the following information (all values are in millions of dollars).…
A: Ratio analysis is one of the important techniques of management accounting.. Accounts receivable…
Q: Solve for the unknown number of years in each of the following: (Do not round intermediate…
A: The number of years in each of the cases is calculated using NPER function. The number of years is…
Q: Your firm is thinking of expanding. If you invest today, the expansion will generate $10 million in…
A: To determine whether to expand the firm today or wait until next year, we can use the concept of Net…
Q: You have a bank account with The Bank of West Chester that pays you .67% interest per quarter. You…
A: Present Value can be calculated using PV function in excelPV (rate, nper, pmt, [Fv], [type])Rate The…
Q: Calculate the correlation coefficient (PAB) for the following situation: (Round intermediate…
A: Variables in the question:Let us denote expected return on stock A=Xand expected return on stock B=Y…
Q: Your financial advisor tells you that if you earn the historical rate of return on a certain mutual…
A: Time = t = 3 YearsPresent Value = pv = $20,000Future Value = fv = $23,152.50
Q: Suppose you sell short 200 shares of BP ADR currently selling at $40 per share. You give your broker…
A: In short selling one does not hold stock but promises to buy at lower prices later and this is…
Q: Assume that a student graduates from college with $20,000 in student loans. If the interest rate is…
A: Given:PV = $20,000 r = 4.80% / 12 = 0.004 or 0.40% n = 15 years * 12 months/year = 180 payments
Q: You believe that stocks are overvalued so you elect to add bonds to your retirement plan to reduce…
A: A bond is a kind of debt security issued by the government and private companies to the public to…
Q: You have a loan outstanding. It requires making seven annual payments of $4,000 each at the end of…
A: The future value of the annuity is the sum of a series of payments received at a fixed time in the…
Q: Stamps Office Supplies recently reported $15,500 of sales, $8,500 of operating costs other than…
A: Sales = s = $15,500Operating Cost other than Depreciation = oc = $8500Depreciation = d = $1700Value…
Q: Select all that are true with respect to systematic and unsystematic risk. Group of answer choices…
A: Systematic risk, also referred to as "market risk" or "non-diversifiable risk," is the inherent risk…
Q: The equity portion of the balance sheet for BusFin Inc.is show below. If the stock price is $30 per…
A: Market to book value is an important ratio which shows how much value has been added by a company to…
Q: 4. A 5-year bond (denote this as Bond A) with semiannual coupons has a face value of $1,000 and a…
A: Using linear interpolation with end points being 9% and 10%, approximate the bond's effective annual…
Q: intrinsic value
A: Price of the stock is the PV of all future coupons and horizon value discounted at the required…
Q: Icarus Airlines is proposing to go public, and you have been given the task of estimating the value…
A: Cost of debt = 6%Weight of debt = 26%Cost of equity = 13%Tax rate = 21%The weighted average cost of…
Q: Emily is trying to decide between investing $1,000 or $1,500 at the beginning of each year for the…
A: Future value of money is the amount of deposit done and the amount of compounded interest…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 6 images
- Al Aznar Company is manufacturer of furniture. At the end of 2018, they have inventory worth $ 14500 and out of that $ 4500 worth inventory is damaged. The company decided to repair the inventory and sell it for 3500. The repair cost is $ 500.1. When do a company write down its inventory value (cost) to the Net Realizable Value?2. Imagine that the company decided to sell the damaged inventory for $ 3200 without spending any amount for repairing, how much amount need to write off from the value of inventory at the end of the period?A small company purchased a state-of-the-art copier machine in 2012 for $5,995. Five years later the company sold the used copier for $3650. Find the absolute change in the value of the copier. Show your work. Find the relative change in the value of the copier. Show your work. The value of the copier has _________________________ by _________%.On January 1,2014 the Mayfair Company has machinery on the books that originally cost $100,000. It sold the machine and recorded a $1,000 gain. Which of the following is true? Multiple Choice Mayfair sold the asset for less than its book value Mayfair sold the asset for more than its book value Mayfair sold the asset at book value Mayfair violated GAAP. None of the other alternatives are correct
- Q3. In 1990 an anonymous private collector purchased a painting by Picasso entitled Angel Fernandezde Soto for $4,450,000. The painting was done in 1900 and valued then at $1800. If the painting wasowned by the same family until its sale in 1990, what is the interest rate they receive on the $1800investment?Five years ago, an industrial engineer deposited $10,000 into an account and left it undisturbed through now. The account is now worth $27,000. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. What is the purchasing power of the $27,000 with respect to the purchasing power of dollars 5 years ago? The purchasing power of the $27,000 is $The Goodson Company is a chain of retail electronics stores. How much of a loss can Goodson deduct in each of the following cases? Explain. a. An employee drops a 65-inch 3D television, cracking the plastic casing on the back. The television normally sells for 3,300. The cost of the set is 2,400, and Goodson sells the damaged set for 1,500. b. The company replaces its inventory system. The old system cost 45,000 and has a basis of 16,000. The company sells the old system for 7,500. The new system costs 75,000. c. A flood damages one of Goodsons retail stores. The building suffers extensive water damage. The basis of the building is 60,000, and the cost of repairing the damage is 72,000. The insurance company reimburses Goodson 50,000. d. The owner of Goodson sells a complete home entertainment center (e.g., projection TV, DVD, stereo system) to his sister for 7,000. The usual sales price is 8,500. The system costs 6,300. e. Assume the same facts as in part d, except that the owner sells the home entertainment center to his sister for 5,500. f. The owner of Goodson finds that the controller has embezzled 10,000 from the company. Before the owner can confront the controller, the controller leaves town and cannot be found. g. Upon arriving at the companys headquarters, the vice president of sales finds that someone has broken in and stolen three computers. The damage to the outside door is extensive. The cost of repairing the door is 1,500, and the cost of replacing the three computers is 9,500. The original cost of the computers totals 10,500. Goodsons basis in the computers is 5,000. The thieves also stole 350 from the petty cash fund. Goodson files a claim with its insurance company and receives 4,800.
- H6. Denver Inc. has an old computer system. The computer originally costs Denver $90,000 and its current book value is $35,000. Answer the following questions: Do not use the account name of book value. There is no such account name as book value in accounting* 1) What is accumulated depreciation on the Denver's computer? 2) Journal entry if Denver discards the computer (for nothing). 3) Journal entry if Denver sells the computer for $90,000. Show proper calculationIn 1626, Dutchman Peter Minuit purchased Manhattan Island from a local Native American tribe. Historians estimate that the price he paid for the island was about $24 worth of goods, including beads, trinkets, cloth, kettles, and axe heads. Many people find it laughable that Manhattan Island would be sold for $24, but you need to consider the future value (FV) of that price in more current times. If the $24 purchase price could have been invested at a 5.75% annual interest rate, what is its value as of 2018 (392 years later)?Wildhorse Inc. recently replaced a piece of automatic equipment at a net price of $5,360, f.o.b. factory. The replacement was necessary because one of Wildhorse’s employees had accidentally backed his truck into Wildhorse’s original equipment and made it inoperable. Because of the accident, the equipment had no resale value to anyone and had to be scrapped. Wildhorse’s insurance policy provided for a replacement of its equipment and paid the price of the new equipment directly to the new equipment manufacturer, minus the deductible amount paid to the manufacturer by Wildhorse. The $5,360 that Wildhorse paid was the amount of the deductible that it has to pay on any single claim on its insurance policy. The new equipment represents the same value in use to Wildhorse. The used equipment had originally cost $64,800. It had a book value of $48,000 at the time of the accident and a second-hand market value of $55,020 before the accident, based on recent transactions involving similar…
- AG also owns a building which it bought in 2010 at a cost of $1.3 million. The current market price of the building is $3.0 million. AG management argues that we should not charge depreciation on the building because the asset has appreciated in value, not depreciated. What is your advice to AG? Justify your answer.Mr. Gaetano has sold a number of assets in the current year: An extensive coin collection, which has a current FMV of $23,500. The total cost of acquiring the coins is $17,600. There were no selling costs. A rare 17th-century manuscript he inherited from his mother. His mother paid $4,000 for the manuscript, which had an estimated FMV of $42,000 at the time of her death. Since several copies of the same manuscript have been found (since her death), and so he had to sell it for $8,500. A Lawren Harris oil painting that he acquired for $275,000. The painting sold for $350,000 and the auction house charged a commission of 20% on the sales price. REQUIRED: calculate the capital gain or loss for each. Also, indicate which type of property this would be considered.Dan bought a hotel for $2,600,000 in January 2011. In May 2015, he died and left the hotel to Ed. While Dan owned the hotel, he deducted $289,000 of cost recovery. The fair market value in May 2015 was $2,800,000. The fair market value six months later was $2,850,000. What is the basis of the property to Ed? What is the basis of the property to Ed if the fair market value six months later was $2,500,000 (not $2,850,000) and the objective of the executor was to minimize the estate tax liability?