In the summer of 2008, at Heathrow airport in London, Bestofthebest (BB), a private company, offered...
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In the summer of 2008, at Heathrow airport in London, Bestofthebest (BB), a private company, offered a lottery to win a Ferrari or 102,000 British pounds, equivalent at the time to about $204,000. Both the Ferrari and the money, in 100 pound notes, were on display. If the U.K. interest rate was 4% per year, and the dollar interest rate was 2% per year (EARS), how much did it cost the company in dollars each month to keep the cash on display? That is, what was the opportunity cost of keeping it on display rather than in a bank account? (Ignore taxes.) Note: Make sure to round all intermediate calculations to at least five decimal places. The opportunity cost of keeping it on display rather than in a bank account is £ decimal places). per month. (Round to two In the summer of 2008, at Heathrow airport in London, Bestofthebest (BB), a private company, offered a lottery to win a Ferrari or 102,000 British pounds, equivalent at the time to about $204,000. Both the Ferrari and the money, in 100 pound notes, were on display. If the U.K. interest rate was 4% per year, and the dollar interest rate was 2% per year (EARS), how much did it cost the company in dollars each month to keep the cash on display? That is, what was the opportunity cost of keeping it on display rather than in a bank account? (Ignore taxes.) Note: Make sure to round all intermediate calculations to at least five decimal places. The opportunity cost of keeping it on display rather than in a bank account is £ decimal places). per month. (Round to two
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Related Book For
Corporate Finance The Core
ISBN: 9781292158334
4th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
Posted Date:
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