Question

Hurst Corp has the following investment opportunities available to accumulate $50M ten years from now.

A. Invest $ 2,849,165 at the end of each year for 10 years.

B. Invest $591,366 at the end of every quarter for 40 quarters.

C. Invest $1,957,350 at the end of every six months for 20 semi-annual periods.

D. Invest $280,000 at the end of every month for 10 years.

Determine the RoR (Rate of Return per year) for each alternative and which is the best alternative.

Answer #1

Solution:

Hurst Corp has the following investment opportunities available
to accumulate $50M ten years from now.
A. Invest $2,849,165 at the end of each year
for 10 years.
B. Invest $591,366 at the end of every quarter
for 40 quarters.
C. Invest $1,957,350 at the end of every six
months for 20 semi-annual periods.
D. Invest $280,000 at the end of every month
for 10 years.
Determine the RoR (Rate of Return per year) for
each alternative and which is the...

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