Consider the graph below. Suppose that the discount factor is 0.80. Assume that cash flows occur at the

Consider the graph below. Suppose that the discount factor is 0.80. Assume that cash flows occur at the beginning of periods. (a) What is the optimal present value for the initial node A? (Keep your answer to 2 decimal places. e.g. xx.12.) (b) Highlight the optimal path in the graph.

Assume that the 1-year zero-coupon bond is sold at $88.97 and the yields to maturity for the coupon bonds

Assume that the 1-year zero-coupon bond is sold at $88.97 and the yields to maturity for the coupon bonds selling at market prices equal to their face values are 12% and 14% for 1-year and 1.5-year issues respectively. Coupons are paid every 6 months and face values are $100 for all the bonds.
(a) Calculate the spot rate curve (s_0.5, s₁, s_1.5).
(Keep your answer in decimal format 4 decimal places, e.g. 0.1234. Do not give in percent format e.g. 12.34%.)
     s_0.5:     s₁:      s_1.5 :
(b) Compute the quasi-modified duration for each of these bonds. (Keep 2 decimal places, e.g. xx.12.)
     Zero-coupon bond:
    12% coupon bond: 
    14% coupon bond: 
(c)  Determine the current price of an 10% coupon bond with face value $100 and 18 months to maturity. (Keep 2 decimal places, e.g. xx.12.)

FINANCIAL ANALYSIS The extracts of the financial statements of Micanfin Auto Spares (Pvt) Limited

FINANCIAL ANALYSIS The extracts of the financial statements of Micanfin Auto Spares (Pvt) Limited for 2017 are provided below: Extract of the Statement of Comprehensive Income for the year ended 31 December 2017. Sales (credit) 1 288 000 Less cost of sales 650 000 Gross profit 638 000 Less Operating expenses 360 000 Operating profit 278 000 Less interest expense 70 000 Profit before tax 208 000 Profit after tax 180 000 Extract of Statement of Financial Position as at 31 December 2017. Non-current assets 1 140 000 Inventories 266 000 Debtors 300 000 Bank 220 000 Total assets 1 926 000 Ordinary share capital 1 000 000 Retained earnings 482 000 Non-current liabilities 240 000 Creditors 215 000 Total liabilities 1 926 000

The extracts of the financial statements of Micanfin Auto Spares (Pvt) Limited for 2017 are provided

The extracts of the financial statements of Micanfin Auto Spares (Pvt) Limited for 2017 are provided
below:
Extract of the Statement of Comprehensive Income for the year ended 31 December 2017.
Sales (credit) 1 288 000
Less cost of sales 650 000
Gross profit 638 000
Less Operating expenses 360 000
Operating profit 278 000
Less interest expense 70 000
Profit before tax 208 000
Profit after tax 180 000
Extract of Statement of Financial Position as at 31 December 2017.
Non-current assets 1 140 000
Inventories 266 000
Debtors 300 000
Bank 220 000
Total assets 1 926 000
Ordinary share capital 1 000 000
Retained earnings 482 000
Non-current liabilities 240 000
Creditors 215 000
Total liabilities 1 926 000

The extracts of the financial statements of Micanfin Auto Spares (Pvt) Limited for 2017 are provided

The extracts of the financial statements of Micanfin Auto Spares (Pvt) Limited for 2017 are provided
below:
Extract of the Statement of Comprehensive Income for the year ended 31 December 2017.
Sales (credit) 1 288 000
Less cost of sales 650 000
Gross profit 638 000
Less Operating expenses 360 000
Operating profit 278 000
Less interest expense 70 000
Profit before tax 208 000
Profit after tax 180 000
Extract of Statement of Financial Position as at 31 December 2017.
Non-current assets 1 140 000
Inventories 266 000
Debtors 300 000
Bank 220 000
Total assets 1 926 000
Ordinary share capital 1 000 000
Retained earnings 482 000
Non-current liabilities 240 000
Creditors 215 000
Total liabilities 1 926 000
Required:
Calculate the following ratios for 2017. Where applicable, answers must be rounded off to two decimal places.
Profit margin
Interest cover
Debtors collection period
Current ratio
Acid test ratio
Return on own capital