Homework answers / question archive / 1) Which of the following are reported as liabilities on a bank’s balance sheet? (a) securities (b) nontransaction deposits (c) loans (d) reserves and cash items 2)Different cash flow

1) Which of the following are reported as liabilities on a bank’s balance sheet? (a) securities (b) nontransaction deposits (c) loans (d) reserves and cash items 2)Different cash flow

Finance

Share With

1)

Which of the following are reported as liabilities on a bank’s balance sheet?

(a) securities

(b) nontransaction deposits

(c) loans

(d) reserves and cash items

2)Different cash flow. Given the following cash inflow at the end of each year, what is the future value of this cash flow at 3%, 9%, and 17% interest rates at the end of year 7? What is the future value of this cash flow at 3% interest rate at the end of year 7? $ 231,382.70 (Round to the nearest cent.) What is the future value of this cash flow at 9% interest rate at the end of year 7? (Round to the nearest cent.)
(Click on the following icon in order to copy its contents into a spreadsheet.) Year 1: Year 2: Year 3: Years 4 through 6: Year 7: $14,000 $19,000 $29,000 $0 $160,000

3)Fund A has a front-end load of 4.5% (of the year-beginning amount). Meanwhile, Fund B has a backend load of 6% which decreases by 1% per year. That is, the backend load will be at 5% if the investor sells the fund at the end of year 2, 4% at the end of year 3, and so on, until it becomes zero. In addition, Fund B charges additional 12b-1 fee of 0.5% per year at each year end. Assume Fund A’s net return of the expense ratio per year is 10% and B’s is 11%. Both fund earn the same return. Which fund would an investor choose if he plans to invest for three years (i.e., buy and hold for three years)? Which fund would he choose if he plans to invest for five years? Ten years? Assume there is no income or capital distribution during the holding period and the investor’s choice is based on return only.

4)Your company requires a capital injection of R10 million for equipment replacement and working capital . The investment is required over a period of 4 years. Use the current financial statements of your company to estimate the cash flows. It is expected that your company will grow at 10% for the next 4 years. Beyond 4 years after capital injection, it is expected that the company will grow at constant rate of 4% for the foreseeable future. Therefore, continuing value should also be taken into consideration when performing valuation. Assume the following: ros = 9%; ro = 10%; T =25% TRF = 5.6%; RPM = 6%; b = 1.2 Debt: Price of the bond = R1,153.72; no of bonds = 70,000 bonds Preferred shares: Price = R116.95; no of shares = 200,000 shares Ordinary shares (common): Price = R50.000; no of shares = 3 million shares Required: Perform a valuation analysis taking into consideration for the following: 1. Weighted Average cost of capital (WACC) [20