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Finance / Math help. I'm not looking for just the answers (those who already know), I have to learn to solve.
If a treasury bill with maturity within 90 days, can be purchased today at $ 98,750, assuming the security is held until maturity and that the investor will receive $ 100,000 (face amount) at that time, determine profitability in the investment holding period (Resp. 0.5025%) Source Inc J had a return on equity of 22% in 2006. margin Net profit of the company is 12% and its equity was 1.7 times multiplier. Calculate company turnover ratio of total assets (Ans: 9%) Jack has saved $ 50,000 for your college. He will start college within a year. If Jack decides to put the money in a bank certificate of deposit (CD) the bank should I choose? Bank A offers a one year CD lead to an annual rate of 4% interest compounded quarterly, while Bank B offers a CD with interest for years held annual rate of 3.75% with interest compounded monthly. (Ans: A: 9766, B: 10,000) I have to learn to solve, so any help would be great. Thanks:)
Problem 1: HPR = ((current value, or face value, end of period value) + (All intermediate gains, such as dividends. Or the security interest paid) – (Initial value)) / (initial value) As Treasury bond pays no interest, no capital gains so your HPR = (100,000-98,750) / 98,750 = 1.265823%, eg 1.267%. Annualized HPR = While ((nominal value – the purchase price) / price Purchaising +1) ^ (360/90) -1 ==((( 100000-98750) / 98750) +1) ^ (360/90) -1 = = 0.0516024 5.16024% Problem 2: The formula asset turnover is: = Asset turnover income / total assets net profit margin, the ability to earn income: net profit margin = Net Profit after tax / Income = 12% = Income> = profit after Taxes/12% Equity Multiplier = Total Assets Shareholders' Equity / = 1.7 => Total Assets = * Equity shareholders 1.7 ROE = Net Profit after tax / 'Equity = 22% =>' Equity = Net Income After Asset Turnover =% Taxes/22 Income / Total Assets = (Net profit after Taxes/12%) / (1.7 * Net profit after Taxes/22%) Profit net profit after tax is reduced from the numerator and denominator and is still the formula: asset turnover = (1 / 12%) / (1.7/22%) = 1.078431 Problem 3: In each case, after a year you will have: VF = VP / (1 + r) ^ n R Bank:% annual interest rate of 4 quarterly Compound therefore you will have a number of n = 4 periods, each period with a 4% / n = 1% interest, the Bank B:% of annual interest of 3.75, compund monthly therefore you will have a number of n = 12 periods, each period with a 3.75% / n = 0.3125% interest Bank Future value A = 50,000 / (1 + 1%) / 4 = 52030.2 Bank Future value B = 50,000 / (1 0.3125%) / 12 = 51907.56 take a bank, which pays more than bank B.
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