Chaffee Company is considering an investment that will return a lump sum of $750,000 six years from now. What amount should Chaffee Company pay for this investment to earn an 8% return?
Answer to relevant QuestionsSealy Company has beginning raw materials inventory $12,000, ending raw materials inventory $15,000, and raw materials purchases $170,000. What is the cost of direct materials used?(a) Scott Winter asks your help in understanding the term “activity index.” Explain the meaning and importance of this term for Scott.(b) State the two ways that variable costs may be defined.Lloyd Company earns 6% on an investment that will return $450,000 eight years from now. What is the amount Lloyd should invest now to earn this rate of return?Tomas Taco Company receives a $65,000, 6-year note bearing interest of 4% (paid annually) from a customer at a time when the discount rate is 6%. What is the present value of the note received by Tomas?Joanne Quick made an investment of $10,271.38. From this investment, she will receive $1,200 annually for the next 15 years starting one year from now. What rate of interest will Joanne’s investment be earning for her?
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