Homework Help for Finance

Next Gen Corporation is considering two investment opportunities. The company can choose either to invest in Project K or Project M. The expected annual free cash flows for each project are as follows: 

Year 

Cash flows (RM) 

Project K 

Project M 

0 

(7,000) 

(7,000) 

1 

1,800 

0 

2 

(2,500) 

0 

3 

1,800 

0 

4 

4,800 

0 

5 

3,800 

10 000  

If the required rate of return is 8%, calculate: 

1. calculate the payback period for each project.  
2. calculate the net present value for each project.      

based on the two investment techniques, which project should be accepted?

Company A,  wishes to borrow U.S dollars at a fixed rate of interest. Company B, wishes to borrow Japanese yen at a fixed rate of interest. The amounts required by the two companies are roughly the same at the current exchange rate. The companies have been quoted the following interest rates: 

Company X- Yen 4.8%
Company Y-Yen 6.2%

Company X-Dollars 9.5%

Company Y-Dollars 10.0%

Design  a swap that will net a bank, acting as intermediary, 20 basis points per annum. Make a swap appear equally attractive to the two companies and ensure that all foreign exchange risk is assumed by the company X and Company Y.  Also draw the cash flow chart. 

Company A,  wishes to borrow U.S dollars at a fixed rate of interest. Company B, wishes to borrow Japanese yen at a fixed rate of interest. The amounts required by the two companies are roughly the same at the current exchange rate. The companies have been quoted the following interest rates: 

Company X- Yen 4.8%
Company Y-Yen 6.2%

Company X-Dollars 9.5%

Company Y-Dollars 10.0%

Design  a swap that will net a bank, acting as intermediary, 20 basis points per annum. Make a swap appear equally attractive to the two companies and ensure that all foreign exchange risk is assumed by the company X and Company Y.  Also draw the cash flow chart. 

Company A,  wishes to borrow U.S dollars at a fixed rate of interest. Company B, wishes to borrow Japanese yen at a fixed rate of interest. The amounts required by the two companies are roughly the same at the current exchange rate. The companies have been quoted the following interest rates: 
Company A 
Yen -4.8%
Dollars-9.6%

Company B
Yen -9.6%
Dollars- 10.0%


Design  a swap that will net a bank, acting as intermediary, 20 basis points per annum. Make a swap appear equally attractive to the two companies and ensure that all foreign exchange risks are not assumed by the company A and bank.

Company A, a British manufacturer wishes to borrow U.S dollars at a fixed rate of interest. Company B, a US multinational, wishes to borrow sterling at a fixed rate of interest. The amounts required by the two companies are roughly the same at the current exchange rate. The companies have been quoted the following interest rates: 
Company A 
Sterling -11%
Dollars-7.0%

Company B
Sterlings -10.6%
Dollars- 6.2%


Design  a swap that will net a bank, acting as intermediary, 30 basis points per annum. Make a swap appear equally attractive to the two companies and ensure that all foreign exchange risk is assumed by the company A and B. 

Company A, a British manufacturer wishes to borrow U.S dollars at a fixed rate of interest. Company B, a US multinational, wishes to borrow sterling at a fixed rate of interest. The amounts required by the two companies are roughly the same at the current exchange rate. The companies have been quoted the following interest rates: 
Company A 
Sterling -11%
Dollars-7.0%

Company B
Sterlings -10.6%
Dollars- 6.2%


Design  a swap that will net a bank, acting as intermediary, 30 basis points per annum. Make a swap appear equally attractive to the two companies and ensure that all foreign exchange risk is not assumed by the financial intermediary. 

Based on the readings that concentrate on mercantilism, the Triangle Trade, slave plantations in the colonies, and the effects of the Enlightenment on society. Respond this question in one or two pages:

1. According to Eric Williams, the West Indies' plantation slavery (note that slavery is a form of command economy) played a role in England's transition to a market economy. Keep in mind that most people in England lived as farmers, who were essentially independent of the market, before slavery spread to the Caribbean plantations.

For this assignment, name two and thoroughly explain how slavery helped nurture a shift to the market fixing the economic crisis in England, despite the fact that Williams develops a number of reasons surrounding this.To put it another way, how did slavery in the Caribbean: help create more wage labor in England; more goods for sale; more monetary revenues; or other things necessary for the market to address the economic problem

Following are the characteristics of market and three portfolios : 

Characteristics 

Market Portfolio 

Portfolio 1

Portfolio 2

Portfolio 3

P/E

16

12

22

17

P/B

2

1.5

3

1.8

Dividend Yield

3%

5%

1%

3.5%

Last 3 years average earning growth 

10%

8%

25%

11%

Industry type

N/M

FINANCE, Energy, Power Defensive 

CONSUMER, Retail ; Healthcare, IT

Finance, IT, Energy 

1. From the above, identify the equity investment style of the portfolio 1,  2 and 3 and comment on their investment philosophy and source of risk. In which spectrum of style, do you characterize yourself? 

Following are the characteristics of market and three portfolios : 

Characteristics 

Market Portfolio 

Portfolio 1

Portfolio 2

Portfolio 3

P/E

16

12

22

17

P/B

2

1.5

3

1.8

Dividend Yield

3%

5%

1%

3.5%

Last 3 years average earning growth 

10%

8%

25%

11%

Industry type

N/M

FINANCE, Energy, Power Defensive 

CONSUMER, Retail ; Healthcare, IT

Finance, IT, Energy 

From the above, identify the equity investment style of the portfolio 1,  2 and 3 and comment on their investment philosophy and source of risk. In which spectrum of style, do you characterize yourself? 

The forward rate is the time-t certainty equivalent of future spot rates -elucidate

It is considered that forward exchange rate is an unbiased predictor of future exchange rate. Under what circumstances is this so? 

(b)Microlin Ltd intends sot introduce a new product, T, into the market. This will require an 

investment in machinery costing Sh. 2,400,000. The machinery is estimated to have a useful 

life of four years with a terminal value of Sh600,000.

Additional information

1. Capital allowances will be provided on the machinery at a rate of 12.5% per annum 

on a balance basis. At the end of the useful life of the machinery, a balancing charge or 

allowance will arise equal to the difference between the scrap proceeds and the tax 

written down value.

2. Annual profits from the sale of product T will amount to Sh960,000 before deducting 

depreciation on machinery.

3. Corporation tax at a rate of 30% is payable one year after the end of the accounting 

year in which the tax was charged.

4. An investment in working capital amounting to Sh.240,000 will be required on 

commencement of the project. 

This amount will however be recovered on completion of the project.

1. The start of the project coincides with the company's financial year.

2. the cost of capital is 15% per annum

Required:

Using the net present value (NPV) approach, advice the management on the suitability of 

the project. (10 marks)

did sailors go 'on the account' or become pirates because Economic opportunities, Discontent with working conditions, Desire for adventure and Political motivations??

Mercantilism, sailors and pirates:

1. What made trading between nations so crucial to the Early Mercantile powers?