Finance Assignment: Risk and Return Analysis with Modern Portfolio Theory

Running head: FINANCE
Finance
Name of the Student
Name of the University
Author Note

1
FINANCE ASSIGNMENT
Answer to Question 1:
Requirement a:
Particulars Amount
Debt Amount (in million) A $103.80
APR B 5%
Total Period (in years) C 3
Nos. of Compounding
Periods p.a. D 12
Total Nos. of
Compounding Periods E=CxD 36
Investment Fund (in
million) F=A/[(1+B/D)^E] $89.37
Requirement b:
Particulars Amount
Current Annual Operating
Revenue (in million) A $1,226.66
Annual Growth Rate B 5.77%
Total Period (in years) C 10
Nos. of Compounding
Periods p.a. D 1
Total Nos. of
Compounding Periods E=CxD 10
Annual Operating
Revenue after 10 years (in
millions) F=Ax[(1+B/D)^E] $2,149.56

2
FINANCE ASSIGNMENT
Requirement c:
Particulars Investment A Investment B Investment C
APR A 4.93% 5.00% 4.91%
Nos. of Compounding
Periods p.a. B 12 6 365
EAR C=[(1+A/B)^B]-1 5.04% 5.11% 5.03%
Requirement d:
Particulars Amount
New Equipment Cost A $5,74,000.00
APR B 4.50%
Total Period (in years) C 20
Nos. of Compounding
Periods p.a. D 12
Total Nos. of
Compounding Periods E=CxD 240
Monthly Installment
F=(AxB/D)/[1-
(1+B/D)^-E] $3,631.41
Requirement e:
Particulars Amount
Face Value A $1,000.00
Coupon Rate B 5.20%
Total Period (in years) C 10
Nos. of Coupon Payments
p.a. D 1
Total Nos. of Coupon
Payments E=CxD 10
Coupon Payment F=(AxB)/D 52
Current Price G $1,170.00
Yield to Maturity
G=RATE(E,F,-
G,A,0) 3.19%