Your friend Amber has approached you seeking advice concerning two investment opportunities that she is presently considering. Her classmate Simone has asked her for a loan of $500 to help establish a small business; her neighbor Riley would like to borrow $515 as a personal loan. One year from now, Amber's original investment will be returned in either case, along with $45 of income from Simone or $48 of income from Riley. Amber can make only one investment. Required: a. 1. Compute the ROI of Simone and Riley. 2. Which investment would you advise Amber to make? b. What other factors should you advise Amber to consider before making either investment?
Your friend Amber has approached you seeking advice concerning two investment opportunities that she is presently considering. Her classmate Simone has asked her for a loan of $500 to help establish a small business; her neighbor Riley would like to borrow $515 as a personal loan. One year from now, Amber's original investment will be returned in either case, along with $45 of income from Simone or $48 of income from Riley. Amber can make only one investment. Required: a. 1. Compute the ROI of Simone and Riley. 2. Which investment would you advise Amber to make? b. What other factors should you advise Amber to consider before making either investment?
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
Related questions
Question
Transcribed Image Text:ok
t
nces
Your friend Amber has approached you seeking advice concerning two investment opportunities that she is presently
considering. Her classmate Simone has asked her for a loan of $500 to help establish a small business; her neighbor Riley would
like to borrow $515 as a personal loan. One year from now, Amber's original investment will be returned in either case, along with
$45 of income from Simone or $48 of income from Riley. Amber can make only one investment.
Required:
a. 1. Compute the ROI of Simone and Riley.
2. Which investment would you advise Amber to make?
b. What other factors should you advise Amber to consider before making either investment?
Complete this question by entering your answers in the tabs below.
Req A1
Req A2 and B
Compute the ROI of Simone and Riley.
Note: Round your answers to 2 decimal places.
Simone
Riley
ROI
%
%
< Req A1
Reg A2 and B >
Show less A
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 5 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education