7. You are considering switching your internet and cable providers. InDirecTV is advertising an introductory rate of $30 a month for a two-year contract. The introductory rate goes away after 6 months and the rate will raise to $75 a month after that. In addition, if you switch now, you will be entered into a drawing for a chance to be an extra in the company's next hilarious commercial. You pay $50 a month with your current provider and there's no contract. Should you switch? Use the smart decision model we learned in class. Justify your answer mathematically and include an emotional evaluation.

7. You are considering switching your internet and cable providers. InDirecTV is advertising an introductory rate of $30 a month for a two-year contract. The introductory rate goes away after 6 months and the rate will raise to $75 a month after that. In addition, if you switch now, you will be entered into a drawing for a chance to be an extra in the company's next hilarious commercial. You pay $50 a month with your current provider and there's no contract. Should you switch? Use the smart decision model we learned in class. Justify your answer mathematically and include an emotional evaluation.

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

Problem 1PS

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2) Matt's Lemonade Stand is one of the most up and coming places to get lemonade in Amherst. I'm looking to take it public by splitting up the company into 100 shares and selling some of them. a) Suppose an inside source tells you that last summer the lemonade stand made $1,000. They expect the same for all summers in the foreseeable future. You assign a discount rate of 10% annually. What are you willing to pay for a single share given the information you've received from the inside source? (Assume throughout that the firm does not retain any of its earnings so that all earnings are paid to shareholders as dividends). b) Suppose instead that I claim the information about cashflow last summer was correct but I'm planning to expand to Northampton and Hadley so I think there will be 5% growth forever. Now what are you willing to pay for a share if your required rate of return does not change from 10%? c) You correctly point out that this growth will not be sustainable. Instead you think…
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Suppose that you charged $8430 on a credit card to relocate for your first job. When you realized that the interest rate for the unpaid balance was 27% compounded monthly, he decided not to charge any more on that account. You want to have this account paid off by the end of 3 years, so you arrange to have automatic payments of equal amount sent at the end of each month.(a) What monthly payment must you make to have the account paid off by the end of 3 years? (b) How much total interest will you have paid?
A career counselor decides to make monthly payments of $150 on credit card debt of $3,496.55 and discontinue using that credit card. Assuming the monthly interest rate is 1.85%, it will take the counselor approximately 31 months to repay the debt. How many fewer months would it take to repay the debt if the counselor makes monthly payments of $200? (Round your answer to the nearest month.) months Need Help? Watch It Read It
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