Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can someone please help with the following four questions Kramerica Industries, Inc. wants to invest $140,000 of extra money received from overseas sales of its

Can someone please help with the following four questions

  1. Kramerica Industries, Inc. wants to invest $140,000 of extra money received from overseas sales of its old assets. How much money will it have at the end of 10 years if the investment fund it chooses guarantees the yearly return rate of 20% compounded annually?
  2. Vandalay Industries, Inc. anticipates big growth in business and has to start planning its future expansion. The company will need $220,000 in 8 years to purchase space for the new factory in another state. How much must the firm invest today in order to have the necessary funds for the expansion project in 8 years if its bank money market account pays the annual interest rate of 7% compounded annually?
  3. Kramer is thinking about a promising investment in fat-free yogurt store chain. Credible food industry stock analysts project that the companys dividend next year will be $1.8 per share, which is projected to increase by 7% every year and is expected to do so indefinitely. Based on the dividend growth model, compute the value of the companys stock in eight years if investors require 12% annual return rate on similar food chain stores.
  4. Mr. Newman wants to start the business of collecting and reselling empty bottles and cans. His initial startup costs are $80,000. He thinks that the business is going to generate the cash revenue of $25,000 per year during next five years. Should this business project be initiated given that potential investors require 16% annual rate of return on the projects like this?

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_2

Step: 3

blur-text-image_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

More Books

Students also viewed these Finance questions

Question

C# can be used to create Web, Windows, and console applications.

Answered: 1 week ago

Question

3. Revise the following:

Answered: 1 week ago