You are thinking about investing $5000 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure of the outcome, you expect your investment to be worth $5750 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 10% for the year. What should you do? The present value of the return is $ (Round to the nearest cent.)

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
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You are thinking about investing $5000 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure of the outcome, you expect your investment to be worth $5750 next year. You notice that the rate for one-year
Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 10% for the year. What should you do?
.....
The present value of the return is $
(Round to the nearest cent.)
Transcribed Image Text:You are thinking about investing $5000 in your friend's landscaping business. Even though you know the investment is risky and you can't be sure of the outcome, you expect your investment to be worth $5750 next year. You notice that the rate for one-year Treasury bills is 1%. However, you feel that other investments of equal risk to your friend's landscape business offer an expected return of 10% for the year. What should you do? ..... The present value of the return is $ (Round to the nearest cent.)
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