Holding period and annual (investment) returns. Bohenick Classic Automobiles restores and rebuilds old classic cars. Today at auction, the car sold for $69,300.00. What are the holding period retum and the annual return on this investment? The company purchased and restored a classic 1957 Thunderbird convertible 7 years ago for $7,700.00 What is the holding period return of the car? 800 % (Round to two decimal places.) What is the simple annual return on the car? 114.29 % (Round to two decimal places.) What is the effective annual return (EAR) on the car? % (Round to two decimal places.)

Holding period and annual (investment) returns. Bohenick Classic Automobiles restores and rebuilds old classic cars. Today at auction, the car sold for $69,300.00. What are the holding period retum and the annual return on this investment? The company purchased and restored a classic 1957 Thunderbird convertible 7 years ago for $7,700.00 What is the holding period return of the car? 800 % (Round to two decimal places.) What is the simple annual return on the car? 114.29 % (Round to two decimal places.) What is the effective annual return (EAR) on the car? % (Round to two decimal places.)

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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You invested on a special pizza oven for $150,000. This commercial oven is depreciated over a 7-year period, and it is expected to have a $20,000 estimated market value at the end of the 7 years. Using the straight-line method, what is the book value in year 5? a) Between $31,900 and $32,300 b) Between $45,500 and $45,900 O c) Between $33,000 and $33,400 d) None of the answers are correct e) Between $58,300 and $58,700 f) Between $56,900 and $57,300
The following proforma shows unleveraged cash flows for a property if an investor were to purchase it today and resell it at the end of the third year: (Show answer in Excel) What is the present value of the each of the discounted cash flows from Year 1, Year 2, and Year 3, using a discount rate of 8.75% (hint: calculate each on separately)? What is the Net Present Value of this investment?
Solve The Correct Answer
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Question 1) Nascar Company has two alternatives for a new truck investment: Buy or lease. Buying option: The purchasing cost of the truck is 230.000 dollars. The economic life will be five years and at the end fifth year the truck will have a salvage value, 40.000 dollars Repair and insurance costs: 1.year 10.000 dollars 2.year 15.000 3.year 20.000 4.year 25.000 5.year 28.000 Leasing option: Lease period: 5 years Annual lease payments: 60.000 dollars (payments will be made at the beginning of each year) Also, at the beginning of contract period Nascar Co. must pay a deposit, 20.000 dollars. This deposit amount will be refunded at the end of fifth year. According to the leasing contract all repair and insurance expenses are under the responsibility of leasing company. Make your decision according to Net Present Value Method. (Assume the discount rate of the company is 12%) Present value of 1 dollar Period Discount rate (12%) 1 0,893 2 0,797 3…
Answer ASAP. I need correct answer. I will rate accordingly
A small research device can be purchased for $10,000 and depreciated by 5-year MACRS depreciation. The net benefits from the device, before deducting depreciation, are $2500 at the end of the first year and increasing $1250 per year after that, until the device is hauled to the junkyard at the end of 10 years. During the 10-year period there will be an inflation rate f of 7%. This profitable corporation has a 28% combined federal and state income tax rate. If it requires a real 15% after-tax rate of return on its investment, should the device be purchased?
3. Samson bought a new cutting machine for P5,000,000.00. The machine could be sold for P50,000.00 after 20 years of use. What is the Book Value of the machine after 12 years? Compute using a) Straight Line Method and b) any other accepted method.
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DO NOT GIVE SOLUTION IN IMAGE FORMAT
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