Your firm has the opportunity to buy a perpetual motion machine to use in your business. The machine costs $1,000,000 and will increase your profits by $75,000 per year. What is the internal rate of return?
Answer to relevant QuestionsHow does inflation affect nominal interest rates? a. Plot the three-month U.S. Treasury bill rate (FRED code: TB3MS) from 1960 to the present. What long-run pattern do you observe? What may have caused this pattern? b. Plot ...You are the founder of IGRO, an Internet firm that delivers groceries.a. Give an example of an idiosyncratic risk and a systematic risk your company faces.b. As founder of the company, you own a significant portion of the ...Which of the following investments in the following table would be most attractive to a risk-averse investor? How would your answer differ if the investor were described as risk-neutral?You are considering three investments, each with the same expected value and each with two possible payoffs. The investments are sold only in increments of $500. You have $1,000 to invest and so you have the option of ...Consider a coupon bond with a $1,000 face value and a coupon payment equal to 5 percent of the face value per year.a. If there is one year to maturity, find the yield to maturity if the price of the bond is $990.b. Explain ...
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