Describe how the cash flows of swaps are similar in structure to the cash flow of bonds
What will be an ideal response?
Answer: The cash flows of interest rate and currency swaps are structured like the cash flow of standard bonds. Maturities extend from 1 year to more than 30 years.
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When a strategic leader helps employees interpret what they are doing and why they are doing it; this is known as ______.
a. cultural direction b. economic disincentives c. relationship management d. social construction
The major commodity exchange is the:
a. New York Stock Exchange b. London Exchange c. Chicago Board of Trade d. Denver Board of Trade e. NASDAQ
A controlling shareholder has a duty not to transfer the power of management to a purchaser that he knows or has reason to believe will use that power to the detriment of the corporation
a. True b. False Indicate whether the statement is true or false
What is the NPV of the F-22 Raptor project? The Lockheed Martin/Boeing F-22 Raptor is a stealth fighter aircraft. It was designed primarily as an air superiority fighter, but it is also capable of ground attack and other roles
Lockheed Martin Aeronautics is the prime contractor and is responsible for the majority of the airframe, weapon systems and final assembly. Lockheed Martin invested over $10B on design and manufacturing for the aircraft. Assume that those investments were paid for on Jan 1, 2003. Each aircraft will be sold for $350M and the variable cost of building each airplane is $300M. Assume that 70 aircraft will be sold each year for 5 years. Assume that revenues and costs occur at year-end. (So 2003 revenues and costs are incurred on Dec 31, 2003. See the table of cash flows, below.) What is the NPV of the project if Lockheed-Martin's cost of capital is 10%? (Assume that there are no taxes.) Date Investments Revenues Costs Jan. 1, 2003 $10B Dec. 31, 2003 $24.5B $21B Dec. 31, 2004 $24.5B $21B Dec. 31, 2005 $24.5B $21B Dec. 31, 2006 $24.5B $21B Dec. 31, 2007 $24.5B $21B A) $3,500,000 B) $3,267,754 C) $5,243,412 D) $13,267,75 E) $82,874,276