Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Mar 06, 2019

You are considering investing in a security that will pay you $2,000 in 28 years. a) If the appropriate discount rate is 11%, what is

You are considering investing in a security that will pay you $2,000 in 28 years.

a) If the appropriate discount rate is 11%, what is the present value of this investment?

b) Assume these investments sell for $531 in return which you receive $2,000 in 28 years. What is the rate of return investors earn on this investment if they buy it for $531

Step by Step Solution

★★★★★

3.38 Rating (154 Votes )

There are 3 Steps involved in it

Step: 1

a The present value 200... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Principles and Applications

Authors: Sheridan Titman, Arthur Keown, John Martin

12th edition

133423824, 978-0133423822

More Books

Students also viewed these Finance questions

Question

★★★★★

You are considering investing in a security that will pay you $1,000 in 30 years. a. If the appropriate discount rate is 10 percent, what is the present value of this investment? b. Assume these...

Answered: 1 week ago

Question

★★★★★

You are considering investing in two securities, X and Y. The following data are available for the two securities: a. If you invest 40 percent of your funds in Security X and 60 percent in Security Y...

Answered: 1 week ago

Question

★★★★★

You are considering investing in the following securities and have developed the probability distributions for their returns over the next year. a. Calculate the expected return and standard...

Answered: 1 week ago

Question

★★★★★

Imagine you are a member of your local school board. You wantan answer to the very simple question, Are students learning?What can you recommend to school principals to answer thequestion?

Answered: 1 week ago

Question

★★★★★

Reed and Carson are partners. Their partnership agreement provides that, in dividing profits, each is to be allocated interest at 10 percent of her beginning capital balance. The balance of net...

Answered: 1 week ago

Question

★★★★★

10.2 Examine the argument that annual reports are a costly irrelevance because hardly anyone refers to them.

Answered: 1 week ago

Question

★★★★★

Explicit values: What cultural and individual values were identified, and how did these relate to the purposes, processes, and judgments of the evaluation?

Answered: 1 week ago

Question

★★★★★

Bill and Guilda each own 50 percent of the stock of Radiata Corporation, an S corporation. Guildas basis in her stock is $25,000. On July 31, 2014, Bill sells his stock, with a basis of $40,000, to...

Answered: 1 week ago

Question

★★★★★

2 8 8 . .

Answered: 1 week ago

Question

★★★★★

Criterion for Vapor-Free Flow in a Pipeline, to ensure that a pipeline is completely liquid-filled, it is necessary that p > P vap at every point. Apply this criterion to the system in Fig. 7.5-1, by...

Answered: 1 week ago

Question

★★★★★

2. Joan and Kim own and operate a partnership. Joan's capital balance is $57,000 and Kim's is $46,000. Joan and Kim decided to admit a new partner to their business - Adamantine. Adamantine will...

Answered: 1 week ago

Question

★★★★★

Select an existing organization preferably, a manufacturer, and develop improvement plan of operations keeping in view the following steps. 1. Do process mapping (time functions mapping and value...

Answered: 1 week ago

Question

★★★★★

Jim Cash sat in a seat six rows behind the dugout at a Maine Bears baseball game. Between the third and fourth innings, Sluggerr, the team mascot, performed the "Hot Dog Launch," a promotional event...

Answered: 1 week ago

Question

★★★★★

Operations Management and Supply Chain Management have been discussed in the media, in politics, and of course in business. Please research and report on one current (2020 and after) news item in the...

Answered: 1 week ago

Question

★★★★★

It is the first time he has climbed on-board an international vessel with Mr. Dela Cruz. He summed up all his expenses in training, medical examination, and other short-term courses to be part of the...

Answered: 1 week ago

Question

★★★★★

ANN LYMAN'S PROPOSAL Ann Lyman was recently hired by the Challenge Products Corp (CPC) as a senior marketing executive for the electronic houseware division. Her previous experience at Pearces, a...

Answered: 1 week ago

Question

★★★★★

Need help with Conceptual Model for next assignment: Richmond Alternative Family Therapy (RAFT) is a small family counseling practice located in Richmond, Virginia. It needs an information system to...

Answered: 1 week ago

Question

★★★★★

Determine whether the lines are parallel, perpendicular, or neither. 2x + 3y = -12, 2y - 3x = 8

Answered: 1 week ago

Question

★★★★★

In order for managers to assign goals, employees must have been assigned to: A review period A profile An active goal plan An eligibility profile A performance evaluation

Answered: 1 week ago

Question

★★★★★

You have an opportunity to make an investment that will pay $100 at the end of the first year, $400 at the end of the second year, $400 at the end of the third year, $400 at the end of the fourth...

Answered: 1 week ago

Question

★★★★★

Kirk Van Houten, who has been married for 23years, would like to buy his wife an expensive diamond ring with a platinum setting on their 30-year wedding anniversary. Assume that the cost of the ring...

Answered: 1 week ago

Question

★★★★★

The R. Morin Construction Company needs to borrow $100,000 to help finance the cost of a new $150,000 hydraulic crane used in the firms commercial construction business. The crane will pay for itself...

Answered: 1 week ago

Question

★★★★★

Robert Altoff is vice president for engineering for a manufacturer of household washing machines. As part of new product development, he wishes to determine the optimal length of time for the washing...

Answered: 1 week ago

Question

★★★★★

The American Accounting Association recently conducted a study to compare the weekly wages of men and women employed in either the public or private sector of accounting. Random samples of five men...

Answered: 1 week ago

Question

★★★★★

Listed below are the weights (in grams) of a sample of M&Ms Plain candies, classified according to color. Use a statistical software system to determine whether there is a difference in the mean...

Answered: 1 week ago

Previous Question Next Question