Financial Accounting The management of Bright star Investments Ltd is assessingan investment plan. The company wants to know the interestrate that will quadruple an initial investment in 12 years.What is the required interest rate?a. 12.25%b. 14.87%c. 10.75%d. 18.92%

To determine the interest rate that will quadruple an investment in 12 years, we can use the formula…

Answered: The management of Bright star…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8TP: Fenton, Inc., has established a new strategic plan that calls for new capital investment. The...

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Fenton, Inc., has established a new strategic plan that calls for new capital investment. The company has a 9.8% required rate of return and an 8.3% cost of capital. Fenton currently has a return of 10% on its other investments. The proposed new investments have equal annual cash inflows expected. Management used a screening procedure of calculating a payback period for potential investments and annual cash flows, and the IRR for the 7 possible investments are displayed in image. Each investment has a 6-year expected useful life and no salvage value. A. Identify which project(s) is/are unacceptable and briefly state the conceptual justification as to why each of your choices is unacceptable. B. Assume Fenton has $330,000 available to spend. Which remaining projects should Fenton invest in and in what order? C. If Fenton was not limited to a spending amount, should they invest in all of the projects given the company is evaluated using return on investment?
Solve this question with steps please. The subject is financial management.
What is the internal rate of return (IRR) of an investment that requires an initial investmen of $11,000 today and pays $15,400 in one year's time?
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You invest $4200 for a period of 7 years. At the end of 7 years your investment has grown to $7200. What is the annual rate of return on this investment? O a. 6.18% b. 10.20% O c. 8.00% O d. 71.43%
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Question 1: If a principle of $4000 is invested at an interest rate of 6%, how many years will it be until the investment has grown to $5000 if the interest is compounded continuously? Use the formula A = Pet. Round to the nearest 0.01 years. Question 2: At what rate should $10000 be invested so that after 11 years, the investment will have grown to $68000? Round your answer to the nearest 0.01 percent. For example, 5-% interest should be expressed as 5.25. Do not include the percent symbol in your answer. B
Task 1The following are two investment scenarios:Scenario 1: £8,000 at 6.5% with simple interest rateScenario 2: £5,000 at 6.5% with annual compound interest rateIn Excel, draw up a table with the following data: Scenario number, Capital, Interest rate, Type of Interest. Then, please create a dynamic process in the table to calculate the accrued interest each year for 45 years from now on, for each of the scenario.Graph the sums accrued and identify what year the sums accrued swap from one investment being the largest to the other.Task 2A business has two projects to invest in, as follows:Create a new spread sheet, calculate NPV for the following projects at discount rates of 3% and 7%, respectively, by creating a dynamic process.Project 1 Project 2Year Cash inflows Cash outflows Cash inflows Cash outflows0 0.00 70,000.00 0.00 70,000.001 24,000.00 13,000.00 25,000.00 15,000.002 22,000.00 1,000.00 25,000.00 -3 25,000.00 - 20,000.00 -4 25,000.00 - 43,000.00 21,000.005 17,500.00 7,500.00…
You invest $5000 at time t=0 and an additional $2000 at time t=1/2. At time t=1/2 you have $5300 in your account and at time t=1 you have $7300 in your account. Find the dollar-weighted rate of return rd and the time-weighted rate of return rt on this investment.A. rd= 2.86 %, rt=3.43 %B. rd= 2 %, rt=2.4 %C. rd= 6.26 %, rt=7.5 %D. rd= 2.51 %, rt=3 %E. rd= 5.01 %, rt= 6 % Please answer it only correct without using Excel
An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next four years. What is the investment’s internal rate of return? Below is a table for the present value of $1 at compound interest. Year 6% 10% 12% 15% 1 0.943 0.909 0.893 0.870 2 0.890 0.826 0.797 0.756 3 0.840 0.751 0.712 0.658 4 0.792 0.683 0.636 0.572 5 0.747 0.621 0.567 0.497 Below is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 15% 1 0.943 0.909 0.893 0.870 2 1.833 1.736 1.690 1.626 3 2.673 2.487 2.402 2.283 4 3.465 3.170 3.037 2.855 5 4.212 3.791 3.605 3.353 fill in the blank 1 %

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The management of Bright star Investments Ltd is assessing an investment plan. The company wants to know the interest rate that will quadruple an initial investment in 12 years. What is the required interest rate? a. 12.25% b. 14.87% c. 10.75% d. 18.92%