Rate of return Bill receive on his investment.

Question

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Answer 1

Question

Chapter 7A, Problem 11P

To determine

Rate of return Bill receive on his investment.

Expert Solution & Answer

Answer to Problem 11P

27.5% rate of return Bill receives on his investment.

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

Explanation:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

Explanation of Solution

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

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Answer 2

Question

Chapter 7A, Problem 11P

To determine

Rate of return Bill receive on his investment.

Expert Solution & Answer

Answer to Problem 11P

27.5% rate of return Bill receives on his investment.

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

Explanation:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

Explanation of Solution

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

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Answer 3

Question

Chapter 7A, Problem 11P

To determine

Rate of return Bill receive on his investment.

Expert Solution & Answer

Answer to Problem 11P

27.5% rate of return Bill receives on his investment.

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

Explanation:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

Explanation of Solution

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

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Answer 4

Question

Chapter 7A, Problem 11P

To determine

Rate of return Bill receive on his investment.

Expert Solution & Answer

Answer to Problem 11P

27.5% rate of return Bill receives on his investment.

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

Explanation:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

Explanation of Solution

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

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Answer 5

Chapter 7A, Problem 11P

To determine

Rate of return Bill receive on his investment.

Expert Solution & Answer

Answer to Problem 11P

27.5% rate of return Bill receives on his investment.

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

Explanation:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

Explanation of Solution

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

Answer 6

Chapter 7A, Problem 11P

To determine

Rate of return Bill receive on his investment.

Expert Solution & Answer

Answer to Problem 11P

27.5% rate of return Bill receives on his investment.

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

Explanation:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

Explanation of Solution

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

Answer 7

Chapter 7A, Problem 11P

To determine

Rate of return Bill receive on his investment.

Answer 8

Expert Solution & Answer

Answer to Problem 11P

27.5% rate of return Bill receives on his investment.

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

Explanation:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000

Thus computation of the internal rate of return ascertained by B using the spreadsheet function is shown below:

Cash Flow: −$29000

Cash inflow: $21000

IRR = $29000−$21000$29000×100=$8000$29000×100=27.5%.

Conclusion:

27.5% rate of return Bill receives on his investment.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Given information:

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below.

In this case, B purchased a vacation lot by making a down payment of $9000 and monthly installment for a period of 40 months which accounts for $500. Since the plot was not as good as assumed by B. Thus he decided to sell the same as a result of which new owner paid $21000 to B against the vacation plot and took over the responsibility to pay for the remaining balance. Therefore, computation of the cash outflow on part of B is shown below:

Down Payment = $9000Monthly Installments= $500Total Paid by B = $9000+($500×40) =$9000+$20000 = 29000