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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A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.
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The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.
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
Transcribed Image Text:2. A bridge connecting two towns costs
$15,000,000, has an average annual operating
cost of $450,000 and a life of 50 years. It
requires a onetime major overhaul in 25 years
at a cost of $1,800,000. The sponsors of the
project can collect an average toll of $2.50 for
each passing vehicle. There will be also $3,000,
000 annual benefits to the communities due to
time savings and accident reduction from
shorter trips. The total (two-way) annual traffic
rate is 1,000,000 vehicles. Determine if this
public project is justified (i=5%).
O The project is justified
O The project is not justified
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