Financial Math Answers

A firm has the possibility of charging different prices in its domestic and foreign markets. The corresponding demand equations are given below by

Q1=300-P1

Q2= 400-2P2

The total cost function is

TC= 5000+100Q

Where Q=Q1+Q2

Determine the priced (in dollers) that the firm should charge to maximise profits

a) with price discrimination

b) without price discrimination

Compare tge profits obtained in parts (a) and (b)

c) What will be the effect of a tax of 8 taka per unit output on the optimal quantity, price and profits for the firm, assuming there is no price discrimination?

Determine the present value of INR 2500 invested today assuming a rate of return of 10%.Compute- the Present value received one year from now, received at the end of 5 years, received at the end of 10 years. Discuss with reason, which of the three value, is the lowest one

NTT Company purchased a delivery truck on credit from AMCE which requires a payment of Br. 400, 000 plus 5% interest compounded annually at the end of 5 years. The Company plans to set up a sinking fund to accumulate the amount required to settle the debt.

Required:

find the total debt at the end of the 5 year.

what should be the monthly deposit into the fund be if the account pays 15% interest, compounded monthly?

A parent wishes to deposit a lump sum into a savings account now. He will withdraw an amount from the account every year for five years starting one year

from now to pay for his child's school fees. The first school fee due one year from now will be R 8 899 and school fees increase thereafter at a rate of 10% p.

If the account earns interest at 6% pa. compounded daily, then the lump sum (to the nearest cent) that must be deposited into the account now is equal to R

type your answer..

4 points

A woman wishes to deposit a lump sum into a savings account now from which she can withdraw regular amounts to pay for the maintenance of hel

need to withdraw regular half-yearly amounts from the savings account starting with a withdrawal of R1500 eighteen months from now from now an

withdrawal five years from now. To keep up with inflation the withdrawals will need to increase at a rate of 6% p.a each half-year from the second wi

the savings account earns interest at a rate 6,8% p.a.compounded daily, then the amount, to the nearest cent, that must be deposited into the saving

to fund the future growing withdrawals, is equal to:

(Hint: Think carefully about where the Pv and Fv of the withdrawals is situated on the time line!)

Regular equal half-yearly deposits of R10000 are made into a savings account that earns interest at a rate of 9% p.a starting six months from now and ending three and a half years from now. Thereafter equal quarterly amounts of R2500 are deposited into the same account with the first quarterly deposit made six months after the last deposit of R10000. If the lastquarterlypayment of R2500 is made five years from now then the total accumulated amount in the account, rounded to the nearest cent, is equal to R

The treasurer of Company ABC expects to receive a cash inflow of $18,000,000 in 90 days. The treasurer expects short-term interest rates to fall during the next 90 days. To hedge against this risk, the treasurer decides to use an FRA that expires in 90 days and is based on 90-day LIBOR. The FRA is quoted at 6%. At expiration, LIBOR is 4.8%. Assume that the notional principal on the contract is $18,000,000. i. Indicate whether the treasurer should take a long or short position to hedge interest rate risk. ii. Using the appropriate terminology, identify the type of FRA used here. iii. Calculate the gain or loss to Company ABC as a consequence of entering the FRA

Two groups of Unam students went into the shop. The first group bought five hamburgers and seven cool drinks and paid N$ 143.50. The second group bought six hamburgers and eight cool drinks and paid N$ 168.50. Deduce the prices for these items (hamburgers & cool drinks)?

Peter made 250% profit on the sale of his bicycle. Is this possible?