Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 10, 2024

You are considering an investment in a clothes distribute. The company needs $105,000 today and expects to repay you $123,000 in a year from now.

You are considering an investment in a clothes distribute. The company needs $105,000

today and expects to repay you $123,000

in a year from now. What is the IRR of this investmentopportunity? Given the riskiness of the investmentopportunity, your cost of capital is 19%.

What does the IRR rule say about whether you shouldinvest?

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

Recommended Textbook for

Financial Management Theory and Practice

Authors: Eugene F. Brigham, Michael C. Ehrhardt

16th edition

1337902608, 978-1337902601

More Books

Students also viewed these Finance questions

Question

★★★★★

If a 1500-kg car can accelerate from 35 km/h to 55km/g in 3.2s, how long will it take to accelerate from 55 km/g to 75 km/h? Assume the power stays the same, and neglect frictional losses.

Answered: 1 week ago

Question

★★★★★

The goal of a retail layout is to maximize profit per square foot of floor space. How does this principle affect your decision on how many products to stock in a retail clothing outlet?

Answered: 1 week ago

Question

★★★★★

3. Contrast the evidence on the effectiveness of treatment for violent offenders and sexual offenders.

Answered: 1 week ago

Question

★★★★★

A partial list of Swain Hotels costs is provided below. a. Pay-per-view movie rental costs (in rooms) b. Training for hotel restaurant servers c. Champagne for guests d. Cost of laundering towels and...

Answered: 1 week ago

Question

★★★★★

Buffalo Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. (a) On July 1, (1) Buffalo purchased $33,000 of inventory, terms 1/10, n/30, FOB...

Answered: 1 week ago

Question

★★★★★

Statistics Assignments Using Excel Assignment #4: Measures of Variability Part I Below are ACT composite scores from 20 randomly selected college students. 15 33 20 25 21 24 17 16 20 25 26 21 21 17...

Answered: 1 week ago

Question

★★★★★

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetualinventory system. Determine the cost assigned to cost of goods sold using FIFO. Muliple Cnolce...

Answered: 1 week ago

Question

★★★★★

One way to determine the trend of a data set is to find ______________________. Question 36 options: a) percentage of non-overlapping data b) the split middle line of progress c) percentage of...

Answered: 1 week ago

Question

★★★★★

The annual salaries for 5 randomly selected people: Diana: $154,500 Clark: $76,000 Lois: $119,350 Bruce: $2,350,000,000 Barry: $68,000 Which would be the best measure of central tendency for this...

Answered: 1 week ago

Question

★★★★★

Your clients expect a 10% return on investment for podcast and a 15% ROI for TV ads. How would you calculate the expected profit for a client who invests $5500 on a podcast ad and $10,000 for a TV ad

Answered: 1 week ago

Question

★★★★★

Describe in detail the three main assumptions for parametric testing.

Answered: 1 week ago

Question

★★★★★

Which information is required to calculate the Total Amount of Insurance Needed in the Financial Needs Analysis (FNA) section? i. Death Amount, Passive Income, Mortgage Balance ii. Mortgage Balance,...

Answered: 1 week ago

Question

★★★★★

In dealing with communication transmitted by way of the grapevine, the first-line supervisor should: Consider it the most reliable form of information transmission in the organization. Take all...

Answered: 1 week ago

Question

★★★★★

Why do you think it is important for companies in public ownership to demonstrate their compliance with good corporate governance of openness, transparency and accountability when compared to private...

Answered: 1 week ago

Question

★★★★★

What should be the relative roles of the government, companies, communities and individuals in dealing with alcohol-related social and health problems?

Answered: 1 week ago

Question

★★★★★

Why do you think there is a lower female representation on UK company boards compared to male representation? Do you think formal policy is needed in this area or do you think Simon Murrays concerns...

Answered: 1 week ago

Previous Question Next Question