You are offered an investment that pays $400 in one year, $500 at the end of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You are offered an investment that pays $400 in one year, $500 at the end of the second year, and $200 at the end of the third year. You can earn 11% on very similar investments. What is the most you should pay for this one? [Round-off to an integer. Only the answer will be graded.] You think you will be able to deposit $4,000 at the end of each of next two years in a bank account paying 8% interest. You currently have $6,000 in the account. How much will you have in 3 years? Consider the following information for the percentage of sales approach: Sales - $3M, NI - $0.4M, Retention ratio - 0.75 Total Asset - $4M Current Liability $0.2M Long-term debt - $1M Equity - $2.8M If sales increase by 30% (and NI, assets, and CL increase at the same rate), calculate the external financing needed. You are offered an investment that pays $400 in one year, $500 at the end of the second year, and $200 at the end of the third year. You can earn 11% on very similar investments. What is the most you should pay for this one? [Round-off to an integer. Only the answer will be graded.] You think you will be able to deposit $4,000 at the end of each of next two years in a bank account paying 8% interest. You currently have $6,000 in the account. How much will you have in 3 years? Consider the following information for the percentage of sales approach: Sales - $3M, NI - $0.4M, Retention ratio - 0.75 Total Asset - $4M Current Liability $0.2M Long-term debt - $1M Equity - $2.8M If sales increase by 30% (and NI, assets, and CL increase at the same rate), calculate the external financing needed.
Expert Answer:
Answer rating: 100% (QA)
SOLUTION To determine the most you should pay for the investment that pays 400 in one year 500 at the end of the ... View the full answer
Related Book For
Statistics For Business Decision Making And Analysis
ISBN: 9780134497167
3rd Edition
Authors: Robert A. Stine, Dean Foster
Posted Date:
Students also viewed these finance questions
-
a.) Suppose you have an 8% semi-annually compounded bond with a face value of $1000 that matures in 7 years. if the yield to maturity is. 10%. what is the price of this bond? b.) The 6 percent bond...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
As a brand manager, for a product of your choice, develop a strategy for launching the product in a manner most likely to capture the attention of the product's primary target market. Write a...
-
For the given cost and demand functions, find the production level that will maximize profit. 11. C(x) = 680 + 4x + 0.01x, p(x) = 12 12. C(x) = 680 + 4x + 0.01x, p(x) = 12 - x/500 13. C(x) = 1450 +...
-
There are 42 locations throughout the northeast region with deposits totaling $3.2bil. If you were Kiamarie's vice president, how would you expect her to choose between Gagne's Nine Events of...
-
The design for a Website is to consist of four colors, three fonts, and three positions for an image. From the multiplication rule, \(4 \times 3 \times 3=36\) different designs are possible.
-
Garden Grove Corporation made a sale to a foreign customer on September 15, Year 1, for 100,000 foreign currency units (FCU). Payment was received on October 15, Year 1. The following exchange rates...
-
here are 4 common categories of customers: new, existing, exiting, and exited. Suppose you work for a large financial institution that is looking to improve its savings deposits and retirement...
-
You're the pricing product manager for Lyft's ride-scheduling feature, and you're launching a new city --Toledo. The prevailing rate that people are used to paying for rides from the airport to...
-
Use the following information for the Exercises 8 - 1 0 below. ( Algo ) Skip to question [ The following information applies to the questions displayed below. ] Hemming Company reported the following...
-
Briefly describe the process that led from a homeowner purchasing a home to an investor purchasing a collateralized debt obligation.
-
What is often called the bottom line?
-
Four of the 12 Scottish clubs have a negative value for T4. Does this mean they are insolvent? Explain. Refer to Real World Insight 29.2. Real World Insight 29.2 In 2012, European football was rocked...
-
Indicate whether each of the following statements is true or false by writing T or F in the answer c olumn. Since a copyright covers only an expression in words, works of art cannot be protected...
-
How can the model be used to estimate the predicted return on a stock?
-
Suppose that you just had a baby and wish to ensure that enough money will be available to pay for your child's college education. Currently, college tuition, books, fees, and other cost $25,500 per...
-
The time to assemble the first unit on a production line is 10 hours. The learning rate is 0.94. Approximately how long will it take for the seventh unit to be assembled? The number of hours needed...
-
If quantity sold increases with price, would the elasticity be positive, negative, or zero?
-
Describe the outcomes of these random processes as either independent or dependent. Briefly explain your choice. Tracking the number of visits to a major Web site day by day
-
Mark each statement True or False. If you believe that a statement is false, briefly explain why you think it is false. The wording of questions has been shown to have no influence on the responses...
-
The probabilities that a TV station will receive \(0,1,2,3, \ldots, 8\) or at least 9 complaints after showing a controversial program are, respectively,...
-
A rotary plug valve needs to be replaced to repair a machine, and the probabilities that the replacement will be a flange style (low pressure), flange style (high pressure), wafer style, or lug style...
-
If each point of the sample space of Figure 3.12 represents an outcome having the probability find, 32
Study smarter with the SolutionInn App