Finance Answers

Why is the operating profit margin often more informative than the net profit margin?

basic financial statement and ration analysis.
income statement.
sales 56000
cost of sales (26000)
Gross profit 30000
Expenses
salaries (4500)
Electricity (3000)
Building Rent (500)
Transport charges (2000)
net Profit 20,000

The Bonds of Corporation Y are trading at £89.92, have a 20 year maturity date, a nominal value of £100 and pay an annual coupon of 9 percent. What is the yield to maturity of these bonds?

A company is negotiating today a long term loan of £40 million, the interest rate on the loan will be 7% and the loan will be repaid in 6 equal instalments, with the first instalment being due at the end of year two. Interest will be charged on the outstanding balance of the loan and will be accumulated for the first year when no re-payment will be made. What is the annual instalment required?

An AT&T bond has 10 years until maturity, a $1,000 nominal value, a coupon rate of 8% and sells for $1,100 (coupon is paid annually).

What is the yield to maturity?

You take out a 30 year £200,000 mortgage loan with monthly payments and a 0.5% monthly interest rate. Fourteen years later you decide to sell your house and pay off the mortgage. What is the balance on the loan?

The USD is rising quickly relative to the Indian rupee (INR). Will an Indian company that imports cars made in the United States find that car prices in INR will rise or fall? Explain.

Assuming the approval of 2020 appropriate bill in Nigeria part of the budget for fiscal year was to be distributed among the state.
A) How much will each state get ?
B) How much will the fifth state get?

Orange Inc. is considering two mutually exclusive projects (i.e., can choose either one but not both),Alpha in Country A, and Beta in Country B. Project Alpha requests an initial investment of $300,000 and has projected annual cash flows of $20,000, $50,000, $50,000 and $350,000 over 4 years. Project Beta requests an initial investment of $88,000 and has projected cash flows of $12,000 for the first year, and then the cash flows are projected to grow at a constant rate of 5 percent per year forever. Based on the project characteristics, the company requires an 15 percent return for Project Alpha but requires an 17 percent for Project Beta. You require a 15 percent return on your investment and a payback period of 3 years.

If you apply the NPV criterion, which investment will you choose? Why? (5 marks)
Based on your answer in (a) and (b), which project will you finally choose? Why? (3 marks)

Eason plans to open a do-it-yourself dog bathing center in Petland. The bathing equipment will cost $50,000. Eason expects the after-tax cash inflows to be $15,000 annually for 8 years, after which he plans to scrap the equipment.
a. Find the project’s payback period.
b. What is the project’s discounted payback period if the required rate of return is 10%?
c. What is the project’s net present value (NPV) if the required rate of return is 10%?
d. What is the project’s Profitability Index (PI) if the required rate of return is 20%? Should the project be accepted according to the rule of PI?