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You have invested in a business that proudly reports that it is profitable. Your investment of $5,500 has produced a profit of $305. The managers
You have invested in a business that proudly reports that it is profitable. Your investment of $5,500 has produced a profit of $305. The managers think that if you leave your $5,500 invested with them, they should be able to generate $305 per year in profits for you in perpetuity. Evaluating other investment opportunities, you note that other long-term investments of similar risk offer an expected return of 8.3%. Should you remain invested in this firm? The expected return of your investment is %. (Round to one decimal place.) You are thinking about investing $4,522 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure, you expect your investment to be worth $5,770 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 9% for the year. What should you do? The present value of the return is $. (Round to the nearest cent.)
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