You are deciding between two mutually exclusive investments, whether to renovate or rebuild your warehouse. Both require the same initial investment of $4 million. Renovating will generate $3 million per year (starting at the end of the first year) in perpetuity. Rebuild will generate $2.5 million at the end of the first year and its revenues will grow at 2% per year for every year after that. Use the incremental IRR rule to correctly choose between the investments when the cost of capital is 10%.

Oscar Porter purchased a $50,000 ten-year renewable term life insurance policy. This information indicates that Mr. Porter will have the right, within specified limits, to renew his insurance coverage at the end of the ten-year term

4.19 A 7-year project requires an initial cash injection of $10,000. Expenses of $500 are incurred at the end of every year. The project starts to generate income of $3,000 after 3 years, and the income increases at a rate of 10% every year.

(a) Calculate the yield rate of the project.

(b) Repeat (a), assuming that at the end of each year, the company has to pay 5% tax on investment income after expenses. (If the net income in the year is negative, no tax is paid.) Compare your answer with that obtained in (a).

Evil Pop Co. began the year with net fixed assets of $17,708 and had $19,121 in the account at the end of the year. During the year, the company paid $4,438 in interest and expensed $3,940 in depreciation. The company purchased $9,380 in fixed assets during the year. How much in fixed assets did the company sell during the year?

Please explain how you got it and not just the answer. I need help with the concept. Taking an online class and have no guidance at all. Thank you

In MatLab, using linprog:

3.8.Paul has 2200 per year to invest over the next five years. At the beginning of each year he can invest in one–, two–, and three–year deposits at interest rates of 8%, 17% (total) and 27% (total), respectively. If Paul reinvests his money available each year, how much should he invest in each of the three deposits each year so that his total cash at the end of the five years is a maximum?

1. Sandra acquired a passive activity three years ago. Until last year, the activity was profitable and her at-risk amount was $120,000. Last year, the activity produced a loss of $100,000 and, in the current year, the loss is $50,000. Assuming Sandra has received no passive income in the current or previous year, her suspended loss (under the passive activity loss provisions) as of the end of the current year is:

a. $150,000

b. $120,000

c. $30,000

d. $0

e. None of these

Suppose 85% of the cars this plant produces are cherries. Both cherries and lemons can have Malfunctions in the first year of ownership. Suppose the probability that any car is both cherry and malfunction is .10. If a car is a lemon, the probability is .30 that it will malfunction in the first year.

A) What is the probability that any car is both a lemon and does not malfunction in the first year?

B) What is the probability that any car Malfunctions in the first year?

C) If a car malfunctions in the first year, what is the probability it is a lemon?

1. Find the present value of the following cash flow stream with an interest rate of 7%: Year 1 = $2,000 Year 2 = $4,000 Year 3 = $1,000 Year 4 = $6,000

2. Find the present value of the following ordinary annuity: $800 per year for 10 years at 6%

3. If you invest $5,000 in an investment which has an annual return of 10% but compounds every 6 months (instead of yearly), how much will it have after 6 years

economics question

"A company is considering entering into a new marketing campaign. If it engages in this marketing campaign, it must pay $9,000 immediately and $7,000 each at the end of year 1 and year 2. The company believes its annual revenues due to the marketing campaign will be $11,000 at the end of year 1, $9,000 at the end of year 2, and $6,000 at the end of year 3. What is the annual equivalent worth of this marketing campaign over the next three years? The interest rate is 4.2% compounded annually."

In a home theater system, the probability that the video components need repair within 1 year is 0.02, the probability that the electronic components need repair within 1 year is 0.005, and the probability that the audio components need repair within 1 year is 0.004. Assuming that the events are independent, find the following probabilities. (Round your answers to four decimal places.)

(a) At least one of these components will need repair within 1 year


(b) Exactly one of these component will need repair within 1 year