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I hope this is an appropriate thread for a question from my Finance homework. The above image is from the solutions manual. Can someone please tell me how they got the IRR / Expected Rate of Return of 24.63%? Thank you.
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Feb 3, 2011 22:45
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shrike82 posted:It'd be funny if this thread ends up a Finance homework help thread. It is the latter, thank you. I believe you missed a 2.5/(1+x)^3 in your equation. However, during the midterm when we won't have access to excel, how would I solve for X? Could I use a function on my TI-83? Thank you.
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Feb 3, 2011 23:43
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I have a undergrad finance question here. 1) A firm requires an investment of $20,000 and will return $26,500 after one year. If the firm borrows $5000 at 7% what is the return on levered equity? I am having a hard time with this question. The answer is 41% which I got by doing (26500 - 5350) / (20000 - 5000) - 1 = .41 but I still don't understand how that works and why I got the answer by doing that. 2) A firm requires an investment of $30,000 and borrows $10,000 at 6%. If the return on equity is 15%, what is the firm's pre tax WACC? To solve this problem I did the following: .06(10000 / 40000) + .15(30000 / 40000) = 12.75%. The answer for this multiple choice problem was 12% according to the professor but there is also a choice of 13%. What am I doing wrong here?
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Nov 5, 2011 22:13
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Have a few finance questions that I'm having a hard time with: 1) A firm has a committed line of credit with a max of $10 million and an interest rate of 8.5% (EAR) with a certain bank. The commitment fee is 0.5% (EAR). The Firm borrows $2 million at the start of the year and then repays it at the end of the year. What is the total cost of the loan? Answer: $210,000 2) A business is offered a $1 million line of credit for 3 months at an APR of 8%. The bank requires that the firm keep an amount equal to 12% of the loan principal in a non-interest earning account with the bank as long as the loan remains outstanding. What is the actual three month interest rate paid, expressed as an EAR? Answer: 9.41%
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Nov 28, 2011 02:07
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I bought a car from a good friend of mine around the $10k range and have been depositing money into his account every month. Will this raise a red flag with the bank and/or IRS?
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Feb 1, 2012 02:09
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I currently have three credit cards and trying to figure out which one(s) to get rid of BoA Platinum Plus CC since 2009. $35 annual fee. $2000 credit limit. BoA Alaska Airlines CC since 2013. $75 annual fee. $1000 credit limit. Local Credit Union Visa CC since 2012. No annual fee. $1000 credit limit. I don't need three credit cards and was thinking of canceling the Platinum Plus CC with the $35 annual fee. I would like to keep the Alaska Airlines one because I take full advantage of those benefits. However, I don't know how canceling my CC would affect my credit score. Any ideas? Busy Bee fucked around with this message at 00:12 on Feb 5, 2013 |
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Feb 4, 2013 23:46
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Zeta Taskforce posted:A few posts ago I told someone to avoid collection accounts because that is like napalm to credit. Closing accounts isn't. If there is an account that doesn't work for you, just close it. The financial industry has told us to be afraid of closing an account. It isn't that big of a deal. What are collection accounts? My income is low and I've never really bothered to increase my credit limit because I've never really purchased anything over my limit. My credit score is 788 so I'm sure it wouldn't be a problem. I started out with $300 deposit with BoA and got a measly $300 credit limit. That was about 4 to 5 years ago and I've slowly worked my way up. Orange_Lazarus posted:Couldn't you just cancel all three of those cards and get a miles card (or another rewards card) with/without an annual fee and a higher limit to use as your every-day card? I could, but I just only recently applied and was accepted for the Alaska Airlines card and the benefits are pretty amazing even with the $75 annual fee. 25k miles after approval so a free roundtrip ticket anywhere Alaska Airlines flies too so that in itself is about $300 - $500. In addition, once a year I get a $100 companion fare meaning I can have someone travel with me for only $100, no matter the destination. Busy Bee fucked around with this message at 04:42 on Feb 5, 2013 |
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Feb 5, 2013 04:36
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This might be slightly off topic for this thread but I'm hoping that someone can give me some advice. So this morning I received a call from a hospital bill debt collector and he said that I had an outstanding bill of $600 from getting blood work done in October of last year. I never receive these types of calls since I am very good about my finances so I was surprised. I remember going to my family doctor last year in October, paying a $30 co-pay, and getting blood work done and getting a prescription for some medication. What the hell is this stupid $600 lab fee that I'm not responsible for? How the hell do I take care of this? Is this an insurance issue or my doctor issue? Who do I go talk to? Thanks!
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Apr 12, 2013 01:31
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Ashcans posted:So the first thing you should do is get in touch with the hospital (or wait until they get back in touch with you) and tell them that you never received any invoice or itemized bill for this, and that you would like them to mail that to you immediately so that you can verify the charges. They shouldn't have any issues doing that. Thanks for the prompt response. This is unusual because I have been seeing my family doctor for 20 years now and I have NEVER received a bill from his office. It's the usual pay the $20 - $30 copay and that's it. The bill collector I talked to on the phone said that insurance covered some of it but now I am responsible for the rest. I will get in touch with my doctors office once I receive the $600 bill (Apparently they were sending it to a wrong address so I gave them the correct one). Thank you.
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Apr 12, 2013 01:54
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I'm currently applying for a job that has an "Hourly Off-Scale" wage for the position. Google was not able to help me, what does off scale mean?
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Jun 20, 2013 00:33
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Very basic credit card question. I have great credit and currently have two CC's with a 25k+ limit. I've always paid my balance in full but recently have been curious on how the interest rates work. I have one card with a balance of $3,500 with a minimum payment of $25 due on January 8th, 2014. My APR is 15.24%. If I paid the minimum $25 by January 8th, 2014, I will be charged a rate of 15.24% for the remaining balance on my credit, correct? Also, if I pay off $2,000 of my $3,500 credit card balance by January 8th, 2014. Will I still be charged a rate of 15.24% on the remaining $1,500? On my previous credit card there was something about not being charged an interest rate on any remaining balance if paid an X amount compared to the balance or something along the lines of that. Busy Bee fucked around with this message at 03:25 on Dec 26, 2013 |
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Dec 26, 2013 03:23
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I have excellent credit and currently have three credit cards. I still have the first credit card that I built my credit through (Started out with a $300 deposit to have a $300 credit limit) - now I'm up to $50k credit limit in my other cards. My question is, the first CC that I have I never use and I am considering canceling it but I also have no annual fee on it. With that in mind, is there really a point in canceling it?
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May 7, 2014 02:50
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Cultural Imperial posted:I think your credit rating is the least of your concerns at this point. I don't understand. Won't canceling my first CC from 2009 affect my credit score along with my credit history?
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May 7, 2014 05:10
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The longest running CC I have is a Bank of America Platinum card (No rewards but no annual fee) I've had since 2009. I recently received an email from Bank of America saying they are offering me a free complimentary upgrade to the Cash Rewards Bank of America credit card. No annual fee and gives me 1% / 2% / 3% cash back on certain purchases. I rarely, if ever, use this credit card since I have a few other ones I use but I am wondering if this is worth it just for the free upgrade? I doubt it'll hurt my credit score but will it make it better?
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May 21, 2014 04:58
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I forgot but what is that website that lets you see your Credit Score for free every year. All the Google results I see are either scams or cost money and I don't feel comfortable giving my social security number + personal information to those websites. However, I remember using a Federal Government sponsored one last year...
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Aug 1, 2014 18:44
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I'm relatively okay with my money so I know what not to fall for but recently I received an offer from Chase where if I open a Chase Checking Account and deposit and hold at least a minimum of $1,000, I get a $300 bonus. There's no catch from what I can read. I currently have a BoA and local credit union account - In addition, I have two Chase credit cards so that Chase Checking Account would actually be used. Should I go ahead and open an account to get the $300 bonus or is there a catch?
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Dec 31, 2014 20:09
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Madbullogna posted:The only thing you usually see with offers like those are that the account must be open for x months and must also have a direct deposit going into it as well. Other than that though.... Seems that the requirements are: "To receive the $300 checking bonus: 1) Open a new Chase Total Checking account, which is subject to approval; 2) Deposit $25 or more at account opening; AND 3) Have your direct deposit made to this account within 60 days of account opening. Your direct deposit needs to be an electronic deposit of your paycheck, pension or government benefits (such as Social Security) from your employ or the government. After you have completed all the above checking requirements, we'll deposit the bonus in your new account within 10 business days. The bonus cannot be used as the opening deposit." Also, to have the $10 - $12 monthly Chase Checking fee waived: "Chase Total Checking has no Monthly Service Fee when you do any at least one of the following each statement period: Option #1: Have monthly direct deposits totaling $500 or more made to this account; OR, Option #2: Keep a minimum daily balance $1,500 in your checking account; OR, Option #3: Keep an average daily balance of $5,000 or more in any combination of qualifying Chase checking, savings and other balances. Otherwise a $12 Monthly Service Fee will apply in most states ($10 Monthly Service Fee for CA, OR and WA)." So does that mean that I can go into the branch, open a new account, deposit at least $25 into the new account, and then set up direct deposit through my work within 60 days of account opening I'll get the $300 bonus. After I receive the $300 bonus, I can turn off direct deposit but if I keep a minimum of $1000 into the checking account, I won't get hit with a fee. Is that right? Also, has anyone had any luck receiving this bonus after inputting the coupon code online? I would much rather set up this account online rather then go into a branch.
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Jan 3, 2015 21:36
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I have a few credit cards and was just looking through my statement and noticed an odd charge from a month and a half ago for $60 at a Walmart in California (I live in Oregon). I always scan my statement and didn't notice it when I paid the balance on it because I do go to Walmart sometimes but I thought it was odd so I looked a little deeper into it. It was odd enough that I really had to think if I was in California around that time but I'm 100% sure I wasn't and it is a fraudulent charge. Is this normal for fraudsters to use a stolen CC for the small amount of $60 like that? It even said "In-person purchase" so I'm wondering how they could have used my CC when I've never lost it?
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May 13, 2015 23:15
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Quick question about credit card payments. I always pay my credit card balance in full but wondering about this situation. I have a $1200 balance on my CC and a minimum payment of $25 is due on June 14th. If I pay the minimum balance of $25, do I get charged interest on the remaining $1175 balance?
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Jun 10, 2015 05:07
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SpelledBackwards posted:...how did you think they worked, exactly? I have no idea, I always pay my balance in full.
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Jun 10, 2015 06:09
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Currently have a Bank of America checking / savings account with no monthly fee. Currently have around $10k combined in the accounts but I have slowly been transferring it to my investment / Roth account. Anyone know what the minimum I need to keep to not get charged a monthly fee is? I'm also considering it moving it to my credit union account since I get 1.90% interest.
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Jun 17, 2015 00:22
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Currently I have around $6,000 in my 401k. My employer has matched me since I have started contributing to it. I have no plans of leaving the company but hypothetically speaking, if I do, what happens to my 401k balance? According to the "When you leave" manual, it says: If the vested balance in your 401(k) account exceeds Five Thousand Dollars ($5,000): Please contact the customer service department of Fidelity Investments for information on how to close out the account and receive a distribution. You may also choose to defer receiving a lump sum distribution until a later date. If you elect to defer the distribution of the 401(k) account, monies in the account will continue to be invested in the same funds with Fidelity Investments. Telephone exchanges and account balance inquiries will continue to be available to the employee through Fidelity however you will not be eligible to make further contributions to the account. Would I be eligible withdraw my full amount of my 401k if I need the extra cash? What kind of penalty should I expect? Will the amount that my employer matched be taken away? This link answered some of my questions: http://money.usnews.com/money/articles/2011/08/08/401k-withdrawal-mistakes-to-avoid Busy Bee fucked around with this message at 05:59 on Aug 17, 2015 |
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Aug 17, 2015 05:55
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Space Gopher posted:words Thank you, that clarifies a lot of things. So moving forward, I'll need to figure out what the vested period is at my work. I feel like I heard something about it being a minimum of two years but I'm not positive so I'll have to double check. I also have a investment account + Roth IRA account set up with a family friend who is a financial adviser. I'm hoping I will be able to roll it into that account that is held with TD Ameritrade... that's something I'll ask him next time I see him. Although I already contributed $2k into my $5.5k Roth IRA limit for this year so....
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Aug 17, 2015 08:12
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I currently have a traditional 401k through Fidelity and I contribute 6% (Work matches 50%). However, I am wondering if anyone know the process for when what happens if, hypothetically speaking, I leave the company. I spoke to HR and they said that my vested balance is below $X so I can either keep the money in the Fidelity account or have the option to move it to another qualified plan or IRA in order to defer the federal income tax and ten percent (10%) penalty. I currently have a Roth IRA set up with my financial advisor - my understanding is that I can just transfer the funds from my Fidelity 401k to my Roth IRA to defer the tax and penalty. However, I have already contributed $2,500 to my Roth IRA this year so what will happen if my transfer balance is $4,000?
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Sep 10, 2015 23:04
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Moneyball posted:Rolling over a 401k does not count as a contribution. So that amount will still be $2,500 for the year Okay, so if I want to rollover my traditional 401k to my Roth IRA account - I will be on the hook for the tax (Which would be around how much)>
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Sep 11, 2015 19:58
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Basic question about my Credit Card. I always pay my balance off every month but noticed that for the payment due date the minimum balance due is $0. Usually it's $25 but this time it's $0. Why is that and can I put off paying off my balance until the next cycle?
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Dec 10, 2015 19:22
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I currently claim 0 on my W-4 Allowances so I am expecting a pretty big refund this year. I am wondering how my 401k / Roth IRA / Investment Account will impact the refund that I receive. Will I receive more or less if I deposit more money into those accounts? If my 401k / Roth IRA / investment account actually lost money this year, how will my taxes be affected?
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Jan 22, 2016 19:17
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I worked 6 months in 2014 and got $2000 on my tax return. 2015 I was still employed at the same company but worked the whole year and only got $1300 on my tax returns. Nothing has changed but why am I getting less money back? Busy Bee fucked around with this message at 02:04 on Feb 17, 2016 |
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Feb 17, 2016 01:43
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edit
Busy Bee fucked around with this message at 02:10 on Feb 17, 2016 |
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Feb 17, 2016 02:06
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I'm going to be moving outside the country for a few years so I want to streamline my finances before I leave. My first order of business is to close my Chase checking account that I have since I don't want to pay a monthly fee if I have less than $1,500 in it. I am just planning on going to Chase, withdrawing all my money, and then closing my account. I read online that they may charge a fee to close my account? is this going to be a more complicated process than I am imagining?
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Apr 16, 2016 21:03
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If I wanted to deposit around $10,000 - $15,000 into a friend's bank account, what implications (taxes etc) will he be responsible for, if any?
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Apr 29, 2016 17:15
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slap me silly posted:Can't answer this without knowing the reason. What are you paying him for? Could be anything from a gift (you owe the tax, but there probably won't be any) to a 1099 payment (he'll owe income and self employment taxes on it which could be 40% of the total). The orthogonal question is whether it's legal activity - if you guys are running drugs, that doesn't affect the tax situation but the bank is keeping transaction records so you might get tracked down. 100% legal and not related to income - paying for a down payment and he is currently out of the country so I want to directly deposit it into his bank account.
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Apr 29, 2016 18:16
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What's the best and cheapest way to transfer a couple hundred dollars to a Spanish bank account? I've never done an International Transfer before so I do not know where to go. I checked the transfer fees through Bank of America and the fees are ridiculous. BoA charges a $35 transfer fee and their exchange rate is pretty bad. Exchange rate I understand but the transfer fee seems a little high. I'm sure there's a cheaper way to go about it. Time is not an issue. Any suggestions? edit: I just checked Money Gram and seems that there exchange rate is 1:1 and there is only a $25 transfer fee. Seems like the best option so far. Transferwise seems like a great option as well. Busy Bee fucked around with this message at 18:46 on May 25, 2016 |
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May 25, 2016 18:00
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One of my bank accounts is with a local credit union and I get 4.07% dividend/interest for the first $500 and then 2.44% after. I only have around $1,500 in that account right now. I know that those are high interest rates but I'm considering withdrawing my money out of there and putting it in my investment account or Roth IRA with my financial advisor. I rarely have activity with that credit union and they require me to do X Y and Z every month to retain that account. I'm also going to be moving soon and I would rather not deal with it. What do you think?
Busy Bee fucked around with this message at 08:08 on Jul 13, 2016 |
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Jul 13, 2016 08:04
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I hope this my question is applicable to this thread. I'm going over a financial statement for a telecommunication company in the United States and noticed a few lines under intangible assets that I wanted to understand what they meant: Customer Relationships Favorable lease contracts Game titles Could someone clear up what the above intangible assets means for a telecommunication company? Thank you.
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Oct 2, 2016 13:26
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I have a few very basic questions about how US Treasury purchases works on Fidelity. I watched a few videos online and my basic understanding is that there are "auctions" where you can purchase some US Treasury with a estimated yield that matures at a certain date. I also understand that usually US Treasury purchases are usually better than locking up the cash in a CD since with the CD your money is locked in for that time period but with a US Treasury, you can sell it at any time.
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Feb 3, 2023 08:08
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Ham Equity posted:You have to buy them through the worst website in the world, but I would suggest looking at iBonds instead: Thanks for the suggestion  I already purchased some recently so I wanted to explore other options, especially on Fidelity.
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Feb 3, 2023 09:54
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KYOON GRIFFEY JR posted:Just to be insanely pedantic, there are a few terms that you are using sort of interchangeably that are actually different. There is a secondary market for bonds, which makes this important. Thank you for the clarification. Let's say I put $1,000 into a 3 month T-Bill with an expected yield of 4.5. At the end of the 3 month period, I will have $1,045. If I hold this T-Bill to maturity, then the yield and rate are the same but if I choose to sell it, then the yield will change since I will have to sell it on the secondary market. Are there times when the yield on the secondary market becomes higher where it would be beneficial to sell the T-Bill before maturity? Or is it usually recommended to hold onto it until maturity unless you need the cash before it matures? Right now, it seems that on Fidelity the yields on the T-Bills secondary market are higher than the "new issue" T-Bills - what's the difference here and why would I not want to buy it from the secondary market? And besides the yield, maturity rate, pay frequency, and call protection - is there anything else I should consider or note before purchasing T-Bills?
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Feb 4, 2023 06:54
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How do you expect the upcoming US debt default discussion to affect the markets? I read that in the past when this has happened, the market always goes down a month / a few weeks prior. I know that one should not time the market but is this upcoming event something one should consider when buying into the market?
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Feb 17, 2023 10:17
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If 100% of an Rollover IRA is in one ETF and there is a automatic RMD withdrawal setup, do the gains from the ETF being sold for the RMD be taxed?
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Feb 19, 2023 12:24
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