Question 4 of 9 lan purchased two trucks for his warehouse for a total of $58,000. This investment saved him $14,000 every year for 11 years. At the end of year 11, he sells both the trucks for a total of $10,500. a. What is the Net Present Value (NPV) of the investment if the required rate of return is 8%? Round to the nearest cent b. Does the investment meet the required rate of return? Yes No

Question 4 of 9 lan purchased two trucks for his warehouse for a total of $58,000. This investment saved him $14,000 every year for 11 years. At the end of year 11, he sells both the trucks for a total of $10,500. a. What is the Net Present Value (NPV) of the investment if the required rate of return is 8%? Round to the nearest cent b. Does the investment meet the required rate of return? Yes No

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 1(a) Currently, Eric has $100,000 and her investment horizon is 8 years (i.e., all investments will be terminated at the end of year 8). He is considering one of the following investments products being offered by his private banker from OCBC Bank:• Greentech Fund: First year return is 4% per year, and this will increase by 1% each year for the next four years. Thereafter, returns will remain constant.• Net-zero Fund: Investment can only be made two years later (i.e., His money is in the bank for the first 2 years). When the investment is made, the return on the first three years is 6% per year and 12% per year thereafter.Interest of 3% per year (compounded monthly) can be earned if Eric deposits her money in an OCBC savings account.Analyze which is a better investment product. You are required to show all relevant workings (b) SingLife is offering an endowment policy where Eric, aged 40 today, will need to make the following payments:• 41st…
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
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QUESTION 1 Raul owns two investments, A and B, that have a combined total value of $27,500.00. Investment A is expected to pay $23,540.00 in 4 years from today and has an expected return of 12.40 percent per year. Investment B is expected to pay $23,722.38 in 6 years from today and has an expected return of R per year. What is R, the expected annual return for investment B? O 10.90% (plus or minus 10bps) O 13.22% (plus or minus 10bps) O9.45% (plus or minus 10bps) O 9.27% (plus or minus 10bps) O none of the answers are within 10bps of the correct answer
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QUESTION 2 You project that you will be able to invest $1500 this year, $2000 one year from now, and $2500 two years from today You hope to use the accumulated funds six years from now to use as a $10,000 down payment on a house. Will you achieve your objectives, if the investments earn 8% compounded semiannually? A detailed timeline is required for this question. a) How much will you have in 6 years? b) Did you meet your goal? yes or no a) S b)

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