Which investment is worth more today at an annual rate 4%
interest rate: $1,000 to be...
Which investment is worth more today at an annual rate 4%
interest rate: $1,000 to be paid in 8 years or $800 to be paid in 4
years? Which investment is worth more if the interest rate is
6%?
Given a quarterly effective interest rate of 4% an investment of
X today and another of 7X at the end of 2 years will amount to $19,
470.04 four years from today. Find X. Remember to first express the
equation of value, then and X.
Question 11 pts
The interest rate at which the present worth and the equivalent
uniform annual worth are equal to 0 is called the internal rate of
return.
True
False
Question 21 pts
To determine the internal rate of return, you can calculate net
present worth at varying interests and select the interest rate
where NPW = 0.
True
False
Question 31 pts
If the internal rate of return of a project is less than your
MARR, then the project...
Using a 5% annual compound interest rate, what investment today
is needed in order to withdraw $3,000 annually
a. for 10 years? $enter a dollar amount
b. for 10 years if the first withdrawal does not occur for 3 years?
$enter a dollar amount
Round your answers to the nearest dollar. The tolerance
is ± 2.
You are offered an investment opportunity which pays an annual
interest rate of 2.6% for the next five years. Your initial deposit
is $3,000. Assumes interest is compounded quarterly. How much will
you have at the end of five years?
a.
$3,415.05
b.
$3,807.21
c.
$3,410.81
d.
$3,502.32
e.
$3,098.78
The interest rate on a one-year bond selling today is 4% and the
expected interest rate on a one-year bond selling one year from
today is 2%. If the liquidity premium is 0.5%, then according to
liquidity premium theory, the interest rate on a two-year bond
selling today is about
9. a) What must be the interest rate in order for an investment
of $1,000 to produce proceeds of $2,000 in 20 years?
b) If a cash flow of $2,000 in 20 years has a price today of
$1,000, what must be the discount rate (i.e., the “implied”
rate)?
10. An asset promises to pay $50,000 in five years and $100,000
in ten years. What is its price if the 5-year rate of discount is
10% and the 10-year rate...
4. For any given interest rate, the quantity of investment which
is optimal for a firm will be the one where ________=_________
5. We normally assume that production functions exhibit
__________________ returns to scale and _____________________
marginal product of all inputs.
6. If there is a technological advancement which makes firms
more productive, it will cause a(n) ___________________ in the
_________________ for loanable funds.