Terri Allessandro has an opportunity to make any of the following investments: . The purchase price, the lump-sum future value, and the year of receipt are given below for each investment. Terri can earn a rate of return of 13% on investments similar to those currently under consideration. Evaluate each investment to determine whether it is satisfactory, and make an investment recommendation to Terri. The present value, PV, at 13% required return of the income from Investment A is S (Round to the nearest cent.) Data table Investment Purchase Price Future Value Year of Receipt $8.674 $429 $2.282 $57 $21,000 $2,000 $10,000 15 11 $14.000 54 (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet)

Terri Allessandro has an opportunity to make any of the following investments: . The purchase price, the lump-sum future value, and the year of receipt are given below for each investment. Terri can earn a rate of return of 13% on investments similar to those currently under consideration. Evaluate each investment to determine whether it is satisfactory, and make an investment recommendation to Terri. The present value, PV, at 13% required return of the income from Investment A is S (Round to the nearest cent.) Data table Investment Purchase Price Future Value Year of Receipt $8.674 $429 $2.282 $57 $21,000 $2,000 $10,000 15 11 $14.000 54 (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet)

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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Ken Francis is offered the possibility of investing $4,266 today; in return, he would receive $12,000 after 12 years. What is the annual rate of interest for this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "PV of a single amount" to 4 decimal places and percentage answer to the nearest whole number.) Present Value 1 Future Value 1 p (PV of a Single Amount) Interest Rate %6
Sue plans to save $4765, $0, and $5419 at the end of Years 1 to 3, respectively. What will her investment account be worth at the end of the Year 3 if she earns an annual rate of 5.98 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Note: It is highly recommended to use Excel (or Google Sheets) or a financial calculator to solve this problem.
Ronald has an investment opportunity that promises to pay him $52,000 in three years. He could earn a 6% annual return investing his money elsewhere. What is the most he would be willing to invest today in this opportunity? (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.)
Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $40,000 at the end of each of the next 3 years. The opportunity requires an initial investment of $ 10,000 plus an additional investment at the end of the second year of $50,000. What is the NPV of this opportunity if the interest rate is2% per year? Should Marian take it?
Talal can pick one of two investment portfolios - A and B. Each requires an initial outlay of $100,000 and each has a most likely annualrate of return of 18%. Estimated the returns associated with each investment. Past estimates indicate that the probabilities of thepessimistic, most likely, and optimistic outcomes are 30%, 50%, and 20%, respectively. Note that the sum of these probabilities mustequal 100%; that is, they must be based on all the alternatives considered.Question:1. Explain him about risk aversion, risk neutrality and risk seeking on the bases of standard deviation and coefficient of variation.DetailsAsset AAsset B1.Initial Investment$100.000$100,000Rate of Return - Pessimistic16%10%Rate of Return - Most likely18%18%Rate of Return - Optimistic20%26%
Helen Quick made an investment of $20,542.75. From this investment, she will receive $2,400 annually for the next 15 years starting one year from now. Click here to view the factor table What rate of interest will Helen's investment be earning for her? (Hint: Use Table 4.) (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to O decimal places, e.g. 25%.) Rate of interest %
Bill Padley expects to invest $15,000 for 5 years, after which he wants to receive $22,039.50. What rate of interest must Padley earn? (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factor" to 4 decimal places.) Future Value Present Value Table Factor Interest Rate %
Sean is willing to invest $40,000 for five years, and is an economically rational investor. He has identified three investment alternatives (X, Y, and Z) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the five-year investment period, complete the following table and indicate whether Sean should invest in each of the investments. Note: When calculating each investment's future value, assume that all interest is compounded annually. The final value should be rounded to the nearest whole dollar. Investment Interest rate and Method : Expected future value Make this investment? X 11% compound interest 13% compound interest 13% simple interest Y Z
Suppose an investor, Erik, is offered the investment opportunities described in the table below. Each investment costs $1,000 today and provides a payoff, also described below, one year from now. Option Payoff One Year from Now 1 100% chance of receiving $1,100 2 50% chance of receiving $1,000 50% chance of receiving $1,200 3 50% chance of receiving $200 50% chance of receiving $2,000 If Erik is risk averse, which investment will he prefer? The investor will choose option 1. The investor will choose option 2. The investor will choose option 3. The investor will be indifferent toward these options. In contrast to his brother Erik, Devin is a risk lover (or exhibits risk seeking behavior). Which of the following statements is true about Devin? Everything else remaining constant, Devin will prefer option 3. Everything else remaining constant, Devin will prefer option 2. Everything else remaining constant,…
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Yuri is willing to invest $35,000 for six years, and is an economically rational investor. He has identified three investment alternatives (X, Y, and Z) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the six-year investment period, complete the following table and indicate whether Yuri should invest in each of the investments. Note: When calculating each investment’s future value, assume that all interest is earned annually. The final value should be rounded to the nearest whole dollar. Investment Interest Rate and Method Expected Future Value Make this investment? X 9% compound interest Y 12% compound interest Z 12% simple interest
Your friend already has $20,000 in an investment account. In addition to this amount, she is considering investing $5,000 at the end of year 1 with this amount growing at 6% p.a. until the end of year 5. If the interest rate earned by the investment account is expected to be 8% p.a., the total amount she will have accumulated in this account at the end of five years is closest to: Group of answer choices $29,387. $32,776. $62,162. $66,120.

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