Question
In: Finance
1a) You have an opportunity to invest $25000 today and receive $35000 in 4 years. What...
1a) You have an opportunity to invest $25000 today and receive $35000 in 4 years. What is the expected annual return in percentage terms (or yield)?
b) Regarding your answer in (a), please explain if your answer
has comprehended the effect of the investment’s value compounding
in value or whether you have used a methodology that ignores
compounding. In other words is your answer in (a) above a compound
return or not?
c) You invested $25000 in the ordinary shares of a company 4 years’
ago and received $3000 in dividends over those 4 years. The shares
today are worth $32000. What is the historical return (also called
holding period return) in percentage terms?
Solutions
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jeff jeffy answered 2 years agoRelated Solutions
You have been offered a unique investment opportunity. If you invest $20,000 today, you will receive...
You have been offered a unique investment opportunity. If you
invest $20,000 today, you will receive $1,000 one year from now,
$3,000 two years from now, and $20,000 ten years from now.
(a) The NPV of the opportunity if the interest rate is 10% per
year is $Answer
. (Round to the nearest dollar.)
Should you take the opportunity
Reject it because the NPV is less than 0.
Take it because the NPV is equal or greater than 0.
(b)...
You have been offered a unique investment opportunity. If you invest $15,000 ?today, you will receive...
You have been offered a unique investment opportunity. If you
invest $15,000 ?today, you will receive $750 one year from? now,
2,250 two years from? now, and $ 15 comma $15,000 ten years from
now. a. What is the NPV of the investment opportunity if the
interest rate is 8% per? year? Should you take the? opportunity? b.
What is the NPV of the investment opportunity if the interest rate
is 4% per? year? Should you take the? opportunity?
You have been offered a unique investment opportunity. If you invest $9,800 today, you will receive...
You have been offered a unique investment opportunity. If you
invest $9,800 today, you will receive $490 one year from now,
$1470 two years from now, and $9,800 ten years from now.
a. What is the NPV of the opportunity if the cost of capital is
5.9% per year? Should you take the opportunity?
b. What is the NPV of the opportunity if the cost of capital is
1.9% per year? Should you take it now?
You have been offered a unique investment opportunity. If you invest $11,700 today, you will receive...
You have been offered a unique investment opportunity. If you
invest $11,700
today, you will receive $585 one year from now, $1,755 two
years from now, and $11,700 ten years from now
.a. What is the NPV of the opportunity if the cost of capital is
6.5% per year? Should you take the opportunity?b. What is the NPV
of the opportunity if the cost of capital is 2.5% per year? Should
you take it now?
a. What is the NPV...
You are offered the following investment opportunity: • Invest $425 today • Receive $100 at the...
You are offered the following investment opportunity: • Invest
$425 today • Receive $100 at the end of Year 1; receive $200 at the
end of year 3, and receive $350 at the end of Year 6 • You want to
earn a required return of 13% Required: a) Should you invest in
this opportunity b) Why or Why not?
You are offered the following investment opportunity: • Invest $425 today • Receive $100 at the...
You are offered the following investment opportunity: • Invest
$425 today • Receive $100 at the end of Year 1; receive $200 at the
end of year 3, and receive $350 at the end of Year 6 • You want to
earn a required return of 13% Required: a) Should you invest in
this opportunity b) Why or Why not?
How much would you have to invest today to receive: a. $100,000 in 6 years at...
How
much would you have to invest today to receive:
a. $100,000 in 6 years at 12 percent?
b.$100,000 in 15 years at 12 percent?
c.$10,000 at the end of each year for 25 years at 12
percent
d.$75,000 at the end of each year for 25 years at 12
percent?
How much would you have to invest today to receive a. $15,000 in 8 years at...
How much would you have to invest today to receive a. $15,000 in
8 years at 6 percent? b. $20,000 in 12 years at 8 percent? c.
$6,000 each year for 5 years at 10 percent? d. $50,000 each year
for 20 years at 12 percent?
Mitchell Investments has offered you an investment opportunity. If you invest $30,000 today you will receive...
Mitchell Investments has offered you an investment
opportunity. If you invest $30,000 today you will receive the
following cash-flows:
*$6,000 each year from years 1 through 5
*$3,000 each year from years 6 through 10
*$2,000 each year from years 11 through 20
If you required a 9% return on your investments, would this be
a good investment opportunity? Show your work and justify your
answer.
Mitchell Investments has offered you an investment opportunity. If you invest $30,000 today you will receive...
Mitchell Investments has offered you an investment
opportunity. If you invest $30,000 today you will receive the
following cash-flows:
*$6,000 each year from years 1 through 5
*$3,000 each year from years 6 through 10
*$2,000 each year from years 11 through 20
If you required a 9% return on your investments, would this be
a good investment opportunity? Show your work and justify your
answer.
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