Question

In: Finance

You are trying to choose between two different investments both of which have upfront cost of 92000$.

You are trying to choose between two different investments both of which have upfront cost of 92000$.
investment G returns 157000$ in 9 years; investment H returns 277000$ in 16 years.
calculate the rate of return for each of these investments.

Solutions

Expert Solution


Related Solutions

You’re trying to choose between two different investments, both of which have up-front costs of $68,000....
You’re trying to choose between two different investments, both of which have up-front costs of $68,000. Investment G returns $128,000 in six years. Investment H returns $188,000 in 10 years. Calculate the interest rate for Investments G and H.
You’re trying to choose between two different investments, both of which have up-front costs of $104,000....
You’re trying to choose between two different investments, both of which have up-front costs of $104,000. Investment G returns $169,000 in 9 years. Investment H returns $289,000 in 16 years. Calculate the rate of return for each of these investments. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Rate of Return Investment G % Investment H %
You are a financial manager and must choose between three different investments.
You are a financial manager and must choose between three different investments. Each asset is expected to provide earnings over a three-year period as outlined in the table below. Based solely on the information below with the objective of maximizing wealth, which Asset should you select and why?Year. Asset 1. Asset 2. Asset 3.1. $21,000. $9,000. $15,0002. 17,000. 15,000. 15,0003. 7,000. 21,000. 15,00045,000. 45,000. 45,000
A company has to choose between two different investments. Investment A: This investment requires an immediate...
A company has to choose between two different investments. Investment A: This investment requires an immediate outlay of $60,000 and another investment of $50,000 in year 3. The investment will return annual profits of $45,000 from year 2 to year 8. At the end of year 8, the investment has a residual value of $20,000. Investment B: This investment requires an immediate outlay of $25,000 and additional investments of $10,000 per year from year 1 to year 3. The investment...
A farmer must choose between two possible investments that both require an initial outlay of $120,000...
A farmer must choose between two possible investments that both require an initial outlay of $120,000 and will have no salvage value at the end of their economic life (3 years). The first investment is expected to yield annual net cash flows of $55,000 over a 3-year planning horizon. The second will yield $30,000 in the first year, $40,000 in the second and $50,000 in the third. -The farmer finances 50% of the investment with an outside loan (interest rate...
You are trying to decide between two investments. The first investment has a 90% chance to...
You are trying to decide between two investments. The first investment has a 90% chance to make you $2,000, but the alternative is that you could be losing $5,000. The second investment has a 15% chance to make you $25,000, but the alternative is that you could be losing $5,000. Use expected value to help decide which investment is the mathematically smart choice. (Hint: make two separate expected values and compare).
You are trying to choose between purchasing one of two machines for a factory. Machine A...
You are trying to choose between purchasing one of two machines for a factory. Machine A costs $15,500 to purchase and has a three-year life. Machine B costs $17,400 to purchase but has a four-year life. Regardless of which machine you purchase, it will have to be replaced at the end of its operating life. Which machine should you choose? Assume a marginal tax rate of 35 percent and a discount rate of 15 percent. (Round answers to 2 decimal...
You are trying to choose between purchasing one of two machines for a factory. Machine A...
You are trying to choose between purchasing one of two machines for a factory. Machine A costs $17,299.00 to purchase and has a 3.00 year life. Machine B costs $18,503.00 to purchase but has a 4.00 year life. Regardless of which machine you purchase, it will have to be replaced at the end of its operating life. Which machine should you choose and what is the cost TODAY of running the machine for the next 27.00 years? Assume a discount...
A. X-treme Vitamin Company is considering two investments, both of which cost $20,000. The firm’s cost...
A. X-treme Vitamin Company is considering two investments, both of which cost $20,000. The firm’s cost of capital is 15 percent. The cash flows are as follows: Year Project A Project B 1 12000 10000 2 8000 6000 3 6000 16000 (a) What is the payback period for each project? Which project would you accept based on the payback period? (b) What is the discounted payback for each project? Which project would you accept based on the discounted payback criterion?...
Britney Javelin Company is considering two investments, both of which cost $22,000. The cash flows are...
Britney Javelin Company is considering two investments, both of which cost $22,000. The cash flows are as follows: Use Appendix B and Appendix D. Year Project M Project N 1 $8,000 $7,000 2 12,000 11,500 3 8,000 13,000 a. Calculate the payback period for project M and project N. (Round the final answers to 2 decimal places.)         Payback period Project M years   Project N years b-1. Calculate the NPV for project M and project N. Assume a cost...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT