Problem 4-25 Calculating Rates of Return You're trying to choose between two different investments, both of which have up-front costs of $64,000. Investment G returns $124,000 in seven years. Investment H returns $184,000 in 11 years. Calculate the rate of return for Investments G and H. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Investment G Investment H % %

Problem 4-25 Calculating Rates of Return You're trying to choose between two different investments, both of which have up-front costs of $64,000. Investment G returns $124,000 in seven years. Investment H returns $184,000 in 11 years. Calculate the rate of return for Investments G and H. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Investment G Investment H % %

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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QUESTION 5 You own two investments, A and B, that have a combined total value of $17,400.00. Investment A is expected to make its next payment in 1 month. A's next payment is expected to be $93.00 and subsequent payments are expected to grow by 0.56 percent per month forever. The expected return for investment A is 0.90 percent per month. Investment B is expected to pay $142.00 each quarter forever and the next payment is expected in 3 months. What is the quarterly expected return for investment B? O-1.43% (plus or minus 2 bps) O 0.82% (plus or minus 2 bps) O 0.53% (plus or minus 2 bps) O 0.34% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer
Question 5 Investment products have different probabilities of success. A businessman wishes to invest in two different products, A and B. The following table shows the probability distributions, where P(a, b) represents the probability of success of the ith investment of A and the ih investment of B, for the values (in thousands of GH¢) for A and B invested in 4 different years. Base on this information: (a) (b) (c) A B P(a,b) 3 6 0.3 2 4 0.2 5 3 0.4 1 2 0.1 Which of the investments has a better return and why? Which of the investments is relatively less risky and why? What type of association exists between the two investment options A and B? Interpret your results.
QUESTION 10 Beatrice owns two investments, A and B, that have a combined total value of $28,100.00. Investment A is expected to pay $25,180.00 in 4 years from today and has an expected return of 12.77 percent per year. Investment B is expected to pay $21,594.06 in 5 years from today and has an expected return of R per year. What is R, the expected annual return for investment B? O 11.50% (plus or minus 10bps) O 14.58% (plus or minus 10bps) O 10.73% (plus or minus 10bps) O 9.50% (plus or minus 10bps) O none of the answers are within 10bps of the correct answer
1.4 The table represents the cash flows received from the investments at the end year. Each investment requires an initial investment of $1000. Answer the questions related to the two investment opportunities in the table below. Year 1 2 3 4 5 Investment A 225 215 250 225 205 Investment B 220 225 250 250 210 There are two approaches to evaluate this investment. Show the necessary calculations. • Assume the interest rate ot 4.33%. Use present value analysis to determine which investment you should choose? Calculating the rate of returns of the investment, which investment would you choose and why?
Investment Rate Compounding A 6.846% Annual B 6.6458% Daily C 6.7245% Quarterly D 6.7107% Monthly The lowest effective rate of return you could earn on any of these investments is closest to: A. 6.846% Your answer is correct. B. 6.921% C. 6.896% D. 6.871%
Question content area top Part 1 (Present value of a growing perpetuity) Your firm has taken on cost saving measures that will provide a benefit of $10,000 in the first year. These cost savings will decrease each year at a rate of 4 percent forever. If the appropriate interest rate is 6 percent, what is the present value of these savings? Question content area bottom Part 1 The present value of these cost savings is $enter your response here. (Round to the nearest cent.)
QUESTION 42 Compute the missing variable for each of the following alternatives of investments to accumulate $1,000,000. for 30 years @ 6% annual interest rate: Following are appropriate factors from tables: Table % / n Present Value of annuity due $1 Present Value of ordinary annuity of $1 Present value of $1 Future Value of ordinary annuity of $1 6%/30 12.15812 13.76483 .17411 79.05819 $????????? invested annually at the end of the year. Required Computations: $12,648.91 $72,648.92 $33,3333.33 $11,927.43
question 15
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Homework 7.3-7.4 Linear and Exponential Models: Attempt review 12/2/21, 10:08 PM Question 6 Incorrect 0.00 points out of 1.00 Round all answers to two decimal places. Linda currently has $387, 648 in a retirement account. Assume her investments will obtain a growth rate of 6 % compounded annually. If she does not put any more into the retirement account, write an equation describing the amount A she will have after T years from now. (Use capital letters for variables) Equation is A=P(1+r/m)^(mt) What will she have in the account in 5 years? She will have $ 411471.83 What will she have in the account in 7 years? She will have $ 411513.59
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Previous Problem Problem List Next Problem HW 20 Simple and Compound Interest: Problem 7 (3 points) Find the total amount of money accumulated for an initial investment $1,050 at 8% compounded quarterly after 10 years. Amount: Preview My Answers Submit Answers You have attempted this problem 0 times. You have unlimited attempts remaining.

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