Question

You are to invest $15,000 now and to receive the following amounts in the next five years: year Cash Flow 3,000 5,000 4,000 3,000 2,000 If the required rate of return is 5%, should you make the investment?

Answer #1

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U2 – 20 / Suppose you invest $4,000 today and receive $9,750 in
five years.
a. What is the internal rate of return? (IRR)
of this? opportunity? The IRR of this opportunity is ____% (Round
to two decimal? places.)
b. Suppose another investment opportunity also
requires $4,000 upfront, but pays an equal amount at the end of
each year for the next five years. If this investment has the same
IRR as the first? one, what is the amount you...

Susanne invests $8,000 now and again towards the end of year 3.
She gets a following return for 6 years.
Year
0
1
2
3
4
5
6
Cash Flow
0
1,000
2,000
4,000
4,000
5,000
5,000
Assume Discount rate is 8%, answer the following:
What is the Net Present Value of these cash flows? Should
Susanne make invest in this opportunity?
What is the future value of Net Cash Flow (end of year 6)?
If Susanne had another opportunity...

Betty Kay has a contract under which she will receive the
following payment for the next 5 years: $1,000, $2,000, $3,000,
$4,000 and $5,000. She will then receive an annuity of $8,500 a
year for the end of the 6th through the end of the 15th year. She
is offered $30,000 to cancel the contract. If the payments are
discounted at 14 percent should she cancel the contract? Show all
workings

you are negotiating the cash flow of a potential investment
that will contractuallly last the next five years. you are asked to
invest $19,004 today and you will receive fixed payments of $362 at
the end of each of the next four years. you will then receive one
large, final payment at the end of the fifth year. if you require a
return of 14 percent per year on such an investment, what must the
large, final cash flow be...

Suppose that you have an opportunity to invest in your cousin’s
burgeoning ecommerce business. If you were to invest $5,000 now,
your cousin guarantees that you will receive the following cash
flows: $3,000 at the end of 2 years, $2,000 at the end of 4 years,
and $1,000 at the end of 6 years. In order to finance this
investment, you would withdraw cash from your TFSA which is
generating returns at a rate of 5% compounded annually. Determine
(a)...

You want to invest $15,000 in government securities for the next
two years. You can either invest in a security that pays an
interest rate of 7.5% per year for the next two years, or invest in
a security that matures in one year but pays 5.5%. If you decide to
invest in the security that matures in one year, you would then
reinvest your savings for another one year. What should be the one
year interest rate next year...

Betty Kay has a contract in which she will receive the following
payment for the next 5 year: $1,000, $2,000, $3,000, $4,000 and
$5,000. She will then receive an annuity of $8,500 a year for the
end of the 6th through the end of the 15th year. She is offered
$30,000 to cancel the contract. If the payments are discounted at
14 percent should she cancel the contract? Show all workings.
Please work using the Financial Calculator

Consider an investment that will pay you $3,000 per month for
each of the next 3 years, and then $5,000 per month in the
following 5 years.
If your required rate of return on this investment is 18 percent
per year, what is the most you would be willing to pay for it?
NOTE: Your cash flow worksheet does
NOT incorporate the P/Y setting.Thus, you must use
periodic interest rates when calculating the NPV with
irregular cash flows.
Suppose you...

Consider two investment options, A and B. For option A you must
invest $5,000 now and an additional $1,000 three years from now.
For option B you must invest $3,500 now, $1,500 next year, and
$1000 three years from now. In both cases you will receive four
annual payments of $2,000, the first of these payments one year
from now. Which option would you prefer using
a) simple payback method
b) discounted payback method, assuming a MARR of 10%
c)...

A five - year project has a projected net cash flow of $15,000,
$25,000, $30,000, $35,000, and $20,000 in the next five years. It
will cost $80,000 to implement the project. If the required rate of
return is 20%, conduct a discounted cash flow calculation to
determine the NPV and indicate if you would recommend this
project.

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