Problem 2. A project requires investments of $1,000 and $1,176 at the end of the firstand the third year, respectively, and generates income of $2,170 at the end of 2 years. Findthe internal rate of return of the project.001)Problem 3. The following shows the return and standard deviations of three stock indices:US, Germany, and Japan:AaldyExpected return Standard deviationUSGermanyJapanThe correlation matrix of the three stock indices is as follows: 0,0itruvionol1016% bis 21% lev den25%20%17%27%USil 16 000 GermanyJapanUS Germany Japan100%37%100.1100% impor26%33%100%ned odiYou construct a portfolio of the three markets with 15% weight in US, 40% weight in Germanyand 45% weight in Japan. Calculate the expected return and standard deviation of the returnL 000,000of the portfolio. tomt i bin potendTHOMA.05 maldo19bu istoleProblem 4. A stock fund has an expected return of 0.16 and variance of 0.0784. A bondfund has an expected return of 0.08 and variance of 0.0196. The correlation between the twoLeginning adiit d'funds is -0.3.18 mofco14maldor(a) What is the expected return and standard deviation of the portfolio with 80% in thestock fund and 20% in the bond fund?Kil pds of short(b) What is the expected return and standard deviation of the portfolio with 20% in thestock fund and 80% in the bond fund?illatam stotip d107 11 moldor

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Problem 2. A project requires investments of $1,000 and $1,176 at the end of and the third year, respectively, and generates income of $2,170 at the end of 2 years. Find the internal rate of return of the project. dicos:

Problem 2. A project requires investments of $1,000 and $1,176 at the end of and the third year, respectively, and generates income of $2,170 at the end of 2 years. Find the internal rate of return of the project. dicos:

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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Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ 15,456 5,225 8,223 13,013 8,705 0 1 234 -$ 276,363 26,400 51,000 57,000 402,000 Whichever project you choose, if any, you require a 6 percent return on your investment. a. What is the payback period for Project A? Payback period b. What is the payback period for Project B? Payback period c. What is the discounted payback period for Project A? Discounted payback period
Consider the following project balance profiles for proposed investment projects. Statement 1-For Project A, the cash now at the end of year 2 is $100.Statement 2-For Project C, its net future worth at the end of year 2 is $150.Statement 3-For Project B, the interest rate used is 25%.Statement 4-For Project A, the rate of return should be greater than 15%.Which of the statement(s) above is (are) correct?(a) Just Statements 1 and 2(b) Just Statements 2 and 3(c) Just Statements 1 and 3( d) Just Statements 2, 3, and 4
Assuming monetary benefits of a construction project at $50,000 per year, one-time costs (initial investment) of $15,000, recurring costs of $35,000 per year, a discount rate of 10 per cent, and a 4-year time horizon, calculate the net present value (NPV) of an information system's costs and benefits. Calculate the overall return on investment (ROI) of the project. During which year does break-even occur? Use the NPV template provided (modify to suit your answer) and clearly display the NPV, ROI, and year in which payback occurs. Write a paragraph explaining whether you would recommend investing in this project based on your ﬁnancial analysis. Explain your answer referring to the NPV, ROI and payback for this project. Discount Rate (10%) Year 0 - 1.0000 Year 1 - .9091 Year 2 - .8264 Year 3 - .7513 Year 4 - .6830
Question 3: A project requires an immediate investment of $150,000 and another maintenance expenditure of $30,000every two years starting two years from now. What is the minimum annual income the project should generate starting one year from now for 4 years to satisfy a minimum attractive rate of return (MARR) of 12%? (Provide a cash flow diagram).
A firm evaluates all of its projects by using the NPV decision rule. Year Cash Flow 0 -$ 27,000 1 23,000 14,000 8,000 a. At a required return of 25 percent, what is the NPV for this project? 2 WN 3 NPV b. At a required return of 34 percent, what is the NPV for this project? NPV
What is the payback period for project E? Data Table - X years (Round to one decimal place.) (Click on the following icon in order to copy its contents into a spreadsheet) Cash Flow Cost Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 Cash flow year 6 $46,000 $100,000 $20,000 $9,200 $9,200 $10,000 $9,200 $40,000 $9,200 $30,000 $9,200 $0 $9,200 $0 Print Done
Consider an investment project, which behaves according to the cash flow (in local currency) below, as well as the respective inflations for the period. In view of the above and knowing that the capital cost of the project is 15% per year, it is requested: a) The values of NPV and IRR b) A graphical sketch of NPVs versus interest rates c) Decision on the feasibility of the project regarding the IRR and NPV indicators Anos = years Fluxo de caixa = cash flow Taxa de inflação do período = period inflation rate
Payback period. What are the payback periods of projects E and F in the following table: ? Assume all the cash flow is evenly spread throughout the year. If the cutoff period is 3 years, which project(s) do you ассept? ..... What is the payback period for project E? years (Round to one decimal place.)
(c) Compute the annual rate of return for each project. (Hint: Use average annual net income in your computation.) (Round answers to 2 decimal places, e.g. 10.50%.) Annual rate of return Project Bono % Project Edge % Project Clayton %
1. Calculate the net present value for each project. 2. Calculate the simple rate of return for each product.3. Which of the two projects (if either) would you recommend that Batelco Inc. accept? Why?
An investment project has the following characteristics: Cost, P22,820; Annual cash inflows, P5,000; internal rate of return, 12%. What is the useful life of the project? A. 7 years B. 12 years C. 4.56 years. D. It is impossible to determine from the data given
year payback period criteria and a required return of 12 percent. |Year Cash flow |(OMR) -26,000 18,000 10,000 7,000 -15,000 9,000 2 3 4 11. What is the net present value for the project? 12. What is the payback period for the project? 13. What is the discounted payback period for the project? 14. What is the profitability index for the project? 15. Given your analysis, should the fim accept or reject the projeet?

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