You are going to choose one of two investments. Both investments cost £80000, but investment A pays £35000 a year for 4 years and investment B pays £30000 a year for five years. If your required return is 13% which should you choose? a. A because it pays back sooner b. A because its IRR exceeds 13% c. A because it has a higher IRR d. B because its IRR exceeds 13% e. B because it has a higher NPV

Q: You are considering investing in a security that will pay you $3,000 in 30 years. a. If the…

A: a): Present Value CalculationTo find the present value (PV) of $3,000 to be received in 30 years…

Q: A security that costs $89.90 will provide a return of 6.5 percent per year. If you want to keep the…

A: PV=today cost=$89.90FV=Future value=$143.80Interest rate=r=6.5%Required to find out the period…

Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300…

A: The time value of money refers to the concept in finance that takes into account the effect of…

Q: which should you

A: Net present value and internal rate of return are the capital budgeting techniques used to evaluate…

Q: An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $350…

A: The objective of this question is to calculate the present value and future value of a series of…

Q: Suppose you estimate that the effective rate of return (EAR) you can generate from your investment…

A: Present value is the sum of money that must be invested in order to achieve a specific future goal.…

Q: If you invest £100 now and expect to receive £133.1 in 2 years time, what is the Internal Rate of…

A: Note: In Option, a) 0 is being used instead of the bracket, and accordingly it is 15% and not…

Q: You currently have $8,700 to invest. You can invest the full amount now for a period of 9 years at…

A: Final Value after 9 years = $15,000Initial Value = $8,700Number of years (n) = 9

Q: Invest $12,000 today and $10,000 in four years. Receive $15,000 in six years and $20,000 in eleven…

A: The difference between the current value of cash inflows and outflow of cash over a period of time…

Q: If an investment advisor promises to double your money in 6 years, she is promising an annual rate…

A: Using the following formula we can compute annual rate of return.Future Value (FV) = Present Value…

Q: You have $13,900, you decided to invest it in an investment plan that will pay you 13% interest for…

A: Using the compounding technique, the future value of a sum has been used to know the future value of…

Q: You plan to invest $13223 into an investment that you hope will earn a return of 10.28%.  You will…

A: Future Value = P * (1+r)^nWhere P = Principal / Present ValueR = Rate of returnN = Number of Period

Q: Your investment will pay you the following cash flow stream: YEAR | CASH FLOW 1 |200 2 10 3 100 4…

A: The time value of money is a concept in finance that takes into account the effect of compounding to…

Q: You are trying to decide how much to save for retirement. Assume you plan tpo save $4.000 per year…

A: Here, To Find: Part A. No. of years required to exhaust the savings =? Part B. Rate of return need…

Q: Suppose Niles plans to invest $1,000. He can earn an effective annual rate of 6% on Security A,…

A: Investment = 1000   Security A Effective Annual Rate = 6% Security B Effective Annual Rate = 12%…

Q: $300 at the end of Year 5, and $500 at the end of Year 6. If other investments of equal risk earn…

A: The value of money at present is known as the present worth of the money while the value of money in…

Q: You have been offered a unique investment opportunity. If you invest $8,300 today, you will receive…

A: Net present value (NPV) is the difference between present value of all cash inflows and initial…

Q: t=1/2 you have $1300

A: Initial investment at t=0: $1000Additional investment at t=1/2: $5000Account balance at t=1/2:…

Q: An investment will pay $150 at the end of each of the next 3 years, $200 at the end of Year 4, $300…

A: Present value is the sum of the current value of money of future cash flows. It is also known as a…

Q: CONSIDERING THAT:   You want to make an initial investment of $100,000, and maintain a constant…

A: Owning a stock, bond, or other financial instrument is considered a portfolio investment when it…

Q: You’re trying to choose between two different investments, both of which have up-front costs of…

A: Future value = $122,000Period, n = 5 years Present value = $62,000 Using the formula of time value…

Q: You are going to choose between two investments. Both cost $50,000, but investment A pays $25,000 a…

A: To solve this problem, we need to calculate the present value of the cash flows for each investment…

Q: An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $400…

A: The Future value refers to the value of the future expected cash flow at future date. It is…

Q: You have an investment opportunity that promises to pay you $16,000 in four years. Suppose the…

A: In the context of the time value of money (TVM), interest rates play a critical role. The time value…

Q: Suppose you found an investment that earns 6.0% each year. Suppose you want to withdraw 24,000…

A: Given information: Investment earns 6% Future value is $24,000 Number of years is 4

Q: You invest 10000£ in a project today and you are expecting the following returns: Time Year 1 Year 2…

A: concept. NPV. Net present value (NPV) is a capital budgeting technique used for making investment…

Q: You are considering an investment with the following characteristics. The investment will cost you…

A: NPV is also known as Net Present Value.. It is a capital budgeting technique which helps in decision…

Q: You are considering investing in a security that will pay you $2,000 in 35 years.   a.  If the…

A: We have the cash flows associated with the security. We need to first determine the present value of…

Q: How much time will it take you to accumulate $500,000, assuming you invest $15,000 today and $150 /…

A: The time value of money concept states that the value of a certain amount of money on the future…

Q: An investment will pay $50 at the end of each of the next 3 years, $250 at the end of Year 4, $400…

A: Given: The annual cash flows for the first 3 years is $50. The cash flow for year 4, year 5, and…

Q: You are going to invest $5405 in 3 years and $7923 in 6 years.  If you expect to earn a return of…

A: Future value of investment amount is calculated as Future value = Value of investment×1+rn Where, r…

Q: K You have been offered a unique investment opportunity. If you invest $11,300 today, you will…

A: NPV is also known as Net Present Value. It is a capital budgeting technique which helps in decision…

Q: If you invest $73,300 in a project which yields an annual return of $13,500, how many years will it…

A: Given, Amount of investment is $73,300 Annual return $13,500. Rate of interest is 4.5%.

Q: You have of $1,000,000 to invest. There are two different investment options for you. First option:…

A: Solution- Simple interest for 2 years=2*1.21i                                        =2.42iCompound…

Q: Investment A requires you to pay $30,000 at t = 0 and you will receive $49, 000 after five years.…

A: Rate of return on investment (ROI) is a measure used to evaluate the efficiency of an investment or…

Q: You are considering an investment that will pay you $5,000 per month for 10 years. You want to earn…

A: Present value (PV) is the current value of a future payment or a stream of future payments,…

Q: You are considering an investment that will pay you $1,000 in one year, $2, mm in two years, and…

A: To calculate the present value of this investment, we need to discount each future cash flow back to…

Q: Your broker has offered you an investment opportunity at a cost of $ 500. The opportunity offers…

A: The time value of money is a foundational principle in finance that takes into account the effect of…

Q: ou’re trying to choose between two different investments, both of which have upfront costs of…

A: Rate of return is the profit earned on the investment and is nothing but the interest rate earned on…

Q: An investment of $1,600,000 will return $320,000 per year for 6 years. Should the investment be…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Q: If you put up GHC1,250 in a one-year investment and get back GHC1,350. What rate is this investment…

A: Investment is referred as an asset that are invested or acquired for building the wealth as well as…

Q: An investment offers the following: a series of $1000 annual payments, starting one year from now,…

A: To find the present value of the investment , we have to discount each of the 12 annual payments…

Q: You are considering in investing one of the two options: Investment A requires a $175,000 upfront…

A: Investment A:Upfront payment: $175,000Annual return: $12,000Investment B:Upfront payment:…

Q: Assume you invest $5,100 today in an investment that promises to return $6,928 in exactly 10 years.…

A: The IRR of an investment is used to measure the highest return for which the investment remains…

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.