Double your wealth. Kant Miss Company is promising its investors that it will double their money every 3 years. What annual rate is Kant Miss promising? Is this investment a good deal? If you invest $200 now and Kant Miss in able to deliver on its promise, how long will it take your investment to reach $30,000? Using the Rule of 72, what annual rate is Kant Miss promising? 24 % (Round to the nearest whole percentage.) Using the time value of money equation, what annual rate is Kant Miss promising? % (Round to two decimal places.)

Double your wealth. Kant Miss Company is promising its investors that it will double their money every 3 years. What annual rate is Kant Miss promising? Is this investment a good deal? If you invest $200 now and Kant Miss in able to deliver on its promise, how long will it take your investment to reach $30,000? Using the Rule of 72, what annual rate is Kant Miss promising? 24 % (Round to the nearest whole percentage.) Using the time value of money equation, what annual rate is Kant Miss promising? % (Round to two decimal places.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

4
Double your money—Rule of 72. Approximately how long will it take to double your money if you get an annual return of 3.6%, 6.3%, or 9.1% on your investment?
You have an opportunity to make an investment that will pay $ 300 at the end of the first year, $ 100 at the end of the second year, $ 200 at the end of the third year, $ 400 at the end of the fourth year, and $500 at the end of the fifth year. a. Find the present value if the interest rate is 9 percent. (Hint: You can simply bring each cash flow back to the present and then add them up. Another way to work this problem is to either use the =NPV function in Excel or to use your CF key on a financial calculator —but you'll want to check your calculator's manual before you use this key. Keep in mind that with the =NPV function in Excel, there is no initial outlay. That is, all this function does is bring all the future cash flows back to the present. With a financial calculator, you should keep in mind that CF0 is the initial outlay or cash flow at time 0, and, because there is no cash flow at time 0, CF0 =0.) b. What would happen to the…
can somebody help me？ thanks K means compound k times a year.
You have been offered a unique investment opportunity. If you invest $8,900 today, you will receive $445 one year from now, $1,335 two years from now, and $8,900 ten years from now. a. What is the NPV of the opportunity if the cost of capital is 6.7% per year? Should you take the opportunity? b. What is the NPV of the opportunity if the cost of capital is 2.7% per year? Should you take it now?
A financial instrument just paid the investor $127 last year. The cash flow is expected to last forever and increase at a rate of 1.6 percent annually. If you use a 5.2 percent discount rate for investments like this, what should be the price you are willing to pay for this financial instrument? (Round to the nearest dollar.)
Ivy's Ice Cream is looking at an opportunity that would require an investment of $900,000 today. The investment will provide cash flows of $250,000 in the first year, $400,000 in the second year, and $600,000 in the third year. If the interest rate is 8%, what is the NPV of this investment opportunity? Should Ivy's Ice Cream move forward with this investment based on the NPV? (Round your answer to the nearest whole dollar.)
An investment promises to pay you $400 per year starting in 5 years. The cash flow from the investment is expected to increase by 2 percent per year forever. If alternative investments of similar risk earn a return of 9 percent per year, determine the maximum you would be willing to pay for the investment. (Round answer to 2 decimal places, e.g. 125.12. Do not round your intermediate calculations.) Maximum amount you would be willing to pay $
You have an investment opportunity that promises to pay you $18,000 in four years. You could earn a 5% annual return investing elsewhere. What is the maximum amount you would be willing to invest in this opportunity? Note: Use tables, Excel, or a financial calculator. Round your final answer to nearest whole dollar amount. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
Consider two interest rate scenarios for investing over next 20 years. In steady scenario A, you get interested of 4% each year. In choppy scenario B, in the first year you get that rate plus 10% but then in next year get that rate minus 10% and so forth. The average rate is the same in each scenario. But for an initial investment of $4000, how much more is A worth than B at the end of the period?
Suppose you have $10,000 and a choice of two alternatives: A) put the money in a savings account that pays 4% per year, and B) buy a stock that has a 50% chance to gain 15% in value after 1 year, and a 50% chance to lose 5%. What will be the expected return for either alternative, and which one would you choose? Why?