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a) If l invest £100 and get back £300, what is the percentage return over i 5years 10 years

a) If l invest £100 and get back £300, what is the percentage return over i 5years 10 years

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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a) If l invest £100 and get back £300, what is the percentage return over i. 5 years ii. 10 years b) both. Given the percentage return from part a) i AND i, calculate the doubling time for c) If the nominal or headline rate of interest is 24%, what is the effective annual rate i. semi annually ii. quarterly Consider the following project cash flow. YEAR CASH FLOW -1000 500 1 500 500 500 500 d) Calculate the Net Present Value of this project at a discount rate of i. 30% ii. 50% e) Use this information to calculate the Intenal Rate of Return by linear interpolation (the trial and error method). f) Identify the annuity part of this cash flow and calculate its value using the appropriate annuity factor. O-234
Transcribed Image Text:a) If l invest £100 and get back £300, what is the percentage return over i. 5 years ii. 10 years b) both. Given the percentage return from part a) i AND i, calculate the doubling time for c) If the nominal or headline rate of interest is 24%, what is the effective annual rate i. semi annually ii. quarterly Consider the following project cash flow. YEAR CASH FLOW -1000 500 1 500 500 500 500 d) Calculate the Net Present Value of this project at a discount rate of i. 30% ii. 50% e) Use this information to calculate the Intenal Rate of Return by linear interpolation (the trial and error method). f) Identify the annuity part of this cash flow and calculate its value using the appropriate annuity factor. O-234
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