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Question 6 You have 1000 Euros which you want to invest . There are two options you can choose from . Your rst option is
Question 6 You have 1000 Euros which you want to invest . There are two options you can choose from . Your rst option is to lend your money to Bank A. Bank A will then pay you a yearly amount of 50 Euros in perpetuity .The second option is to invest your money in Project B and receive a cash flow of 600 Euros for the next 2 years starting in one year. Based on the [RR of these two investment opportunities = which one is the most protable option? For which range of discount can Project A be undertaken '? And which for which range of discount rates can Project B be undertaken '3 Question 7 The current nancial crisis made you decide to refinance your car loan which you got 6 years and 6 months ago . You have just made your monthly payment .Since you bought a Ferrari , it co sted quite a lot. Therefore: your loan had an initial term of 10 years. You plan to borrow whatever is outstanding on your current loan . The current monthly payment is $165 and you have made every payment on time .The interest rate is 8,4 % (APR ). How much do you owe on the loan '? Question 3 Consider the following cash ows on two mutually exclusive projects Project W Project P -$40.000 $50000 $20000 $10000 $15000 $20000 The cash ows of Project \"-7 are expressed in real terms whereas the cash flows of project P are expressed in nominal terms . The nominal discount rate is 15 Erin and the inflation rate is 4 \"/6. Which project should you choose 17
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