9) Suppose that t years from now, one investment will be generating profit at the rate...

9) Suppose that t years from now, one investment will be generating profit at the rate of P 1 ′ = 40 + t 2 hundred dollars per year, while a second investment will be generating profit at the rate of P 2 ′ ( t ) = 100 + 4 t hundred dollars per year. For how many years does the rate of profitability of the second investment exceed that of the first? Compute the total net excess profit for the time period.

Expert Solution

milcah answered 2 years ago

An investment is scheduled to pay $1,000 one year from now; $2,000 two years from now;...

An investment is scheduled to pay $1,000 one year from now; $2,000 two years from now; $3,000 three years from now, and this pattern is expected to remain the same in perpetuity (i.e., $1,000 on t=4; $2,000 on t=5; $3,000 on t=6; etc.). If the discount rate on the project is 8% (effective annual rate), what is the present value of the investment. A. $79,080 B. $75,050 C. $28,306 D. $24,360

An investment will pay $381 two years from now, $620 four years from now, and $1,842...

An investment will pay $381 two years from now, $620 four years from now, and $1,842 five years from now. You are going to reinvest these cash flows at a rate of 11.19 percent per year. What is the future value of this investment at the end of year five?

Suppose your uncle invested $121,000 in an investment 4 years ago. The investment is worth now...

Suppose your uncle invested $121,000 in an investment 4 years ago. The investment is worth now $237,500. The annual interest rate (rate of return) on the investment during this period must be ______% per year. (Do not include the percent signs (%). Round your answers to 2 decimal places. (e.g., 32.16))

Suppose that the current one-year rate and expected one-year T-bill rates over the following three years...

Suppose that the current one-year rate and expected one-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows: 1R1 = 1.88%, E(2r1) =2.99%, E(3r1) = 4.56%, E(4r1) = 5.65% Using the unbiased expectations theory, calculate the current rate for three-year-maturity Treasury securities (Write your answer in percentage not decimal for example 5.78%) current rate for three-year-maturity =

9- Suppose that a company has 2 buildings, one for investment (A) and one for administrative...

9- Suppose that a company has 2 buildings, one for investment (A) and one for administrative (B) purposes. Both properties have an initial cost of 1.000.000 TL. The company does not use the cost model and both properties have 10 years of useful lives. A is revalued one year later and the revalued amount is 900.000 TL. B is also revalued one year later and the revalued amount is 1.200.000 TL. After the revaluation the company immediately sells A at...

(a) Suppose that Y is a random variable with moment generating function H(t). Suppose further that...

(a) Suppose that Y is a random variable with moment generating function H(t). Suppose further that X is a random variable with moment generating function M(t) given by M(t) = 1/3 (2e ^(3t) + 1)H(t). Given that the mean of Y is 10 and the variance of Y is 12, then determine the mean and variance of X (Use H(0) = 1). (b) Suppose that the Moment generating function for X is M(t) = e^t/( 3 − 2e^t) . Find...

(a) Suppose that Y is a random variable with moment generating function H(t). Suppose further that...

(a) Suppose that Y is a random variable with moment generating function H(t). Suppose further that X is a random variable with moment generating function M(t) given by M(t) = 1 3 (2e 3t + 1)H(t). Given that the mean of Y is 10 and the variance of Y is 12, then determine the mean and variance of X (Use H(0) = 1). (b) Suppose that the Moment generating function for X is M(t) = e t 3 − 2e...

At an interest rate of 9 percent, an investment of $1 would double in 8.04 years....

At an interest rate of 9 percent, an investment of $1 would double in 8.04 years. How long to the nearest year would it take an investment of $1 to grow four fold (4 times) if the interest rate was only 4 percent? a. 12 years b. 24 years c. 36 years d. 48 years e. 96 years

If you expect to receive $100 in one year from now, $200 two years from now,...

If you expect to receive $100 in one year from now, $200 two years from now, and $150 three years from now, How much this cash flow is worth today if the interest rate is 10%

a. The future value of $410 four years from now at 9 percent. (Round your...

a. The future value of $410 four years from now at 9 percent. (Round your answer to 2 decimal places.) b. The future value of $250 saved each year for 9 years at 6 percent. (Round your answer to 2 decimal places.) c. The amount a person would have to deposit today (present value) at an interest rate of 7 percent to have $3,000 five years from now. (Round your answer to 2 decimal places.) d. The amount a...

Question

9) Suppose that t years from now, one investment will be generating profit at the rate...

Solutions

Expert Solution

Related Solutions

An investment is scheduled to pay $1,000 one year from now; $2,000 two years from now;...

An investment will pay $381 two years from now, $620 four years from now, and $1,842...

Suppose your uncle invested $121,000 in an investment 4 years ago. The investment is worth now...

Suppose that the current one-year rate and expected one-year T-bill rates over the following three years...

9- Suppose that a company has 2 buildings, one for investment (A) and one for administrative...

(a) Suppose that Y is a random variable with moment generating function H(t). Suppose further that...

(a) Suppose that Y is a random variable with moment generating function H(t). Suppose further that...

At an interest rate of 9 percent, an investment of $1 would double in 8.04 years....

If you expect to receive $100 in one year from now, $200 two years from now,...

a. The future value of $410 four years from now at 9 percent. (Round your...