Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

7. There are two possible investments A and B. Their case flows are shown in the table below. Illustrate these cash flows over 12

image text in transcribed

7. There are two possible investments A and B. Their case flows are shown in the table below. Illustrate these cash flows over 12 months in two cash flow diagrams. Show only the net cash flow in each period. (6 marks, 3 each) Outflow Investment A $24000 now, $1200 each quarter, and a closing fee of $2400 at the end of month 12. Investment B $4500 every two months, starting two months from now, $3000 each quarter. 8. Inflow $8000 monthly at the end of each month. $8500 at the end of the first month, and from that point on, $500 more than the previous month. DecryptCo has $50,000 to invest in a bank account. How long will it take (years) the amount in a bank account to double itself under the following circumstances? (a) (b) (c) (d) 4% nominal annual, compounded quarterly interest rate? (2 marks) 3.85% nominal annual, compounded monthly interest rate? (2 marks) 4.2% nominal annual, compounded semi-annually interest rate? (2 marks) 3.8% nominal annual, compounded continuously? (2 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

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

blur-text-image

Step: 3

blur-text-image

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

Horngrens Financial and Managerial Accounting

Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura

4th Edition

978-0133251241, 9780133427516, 133251241, 013342751X, 978-0133255584

More Books

Students also viewed these Accounting questions

Question

What are the attributes of a technical decision?

Answered: 1 week ago