Answered step by step
Verified Expert Solution
Question
1 Approved Answer
12. (15 points) You want to buy an ice-cream truck for $60,000, with expected return: 50% next year. You have only $6,000 Mom lends $24,000
12. (15 points) You want to buy an ice-cream truck for $60,000, with expected return: 50% next year. You have only $6,000 Mom lends $24,000 (interest rate: 20%) Dad chips in $30,000 a) Wh of the project is indeed 50%? b) What is the rate of return for you, mom and dad after one year, if the actual rate of return is now-20%? 2. at is the rate of return for you, mom and dad after one year, if the actual rate return e r r a b), can you comment on why the debvequity is cld he "leverage? Now assume that the actual rate of return on asset is-80%, and further assume you hold the general partnership, and dad holds the limited partnership. (Hint: What's the difference between general partnership and limited partnership?) d) In this case, what is the rate of return for you, mom and dad
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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