Number Cells Insert Clipboard Font Alignment Cell Styles ea Sl A1 X V fx A B C D E F G H UNDERSTANDING HEALTHCARE FINANCIAL MANAGEMENT UI A ONE Chapter 4 -- Time Value Analysis PROBLEM 10 6 Assume that $10,000 was invested in the stock of General Medical Corporation with the intention 7 of selling after one year. The stock pays no dividends, so the entire return will be based on the 8 price of the stock when sold. The opportunity cost of capital on the stock is 10 percent. 9 a. To begin, assume that the stock sale nets $11,500. What is the dollar return on the stock V 10 investment? What is the rate of return? 11 b. Assume that the stock price falls and the net is only $9,500 when the stock is sold. What is the 12 dollar return and rate of return? 13 c. Assume that the stock is held for two years. Now, what is the dollar return and rate of return? 14 15