You have an investment opportunity that requires an initial investment of $5000 today and will pay $6000

Question:

You have an investment opportunity that requires an initial investment of $5000 today and will pay $6000 in one year. What is the rate of return of this opportunity?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Corporate Finance

ISBN: 978-0132148238

2nd edition

Authors: Berk, DeMarzo, Harford

See More Books

Question Posted: Jan 14, 2012 02:22 AM

See More Questions

What is the rate of return on invested capital? How is it calculated?
You have an investment opportunity in Japan. It requires an investment of $1 million today and will produce a cash flow of 114 million in one year with no risk. Suppose the risk-free interest rate...
You have an investment account that started with $1000 ten years ago and which now has grown to $5000. a. What annual rate of return have you earned (you have made no additional contributions to the...
Consider a model of random interest rates R; between year i and i+1. The R, are i.i.d. random variables such that 1+ R; is LogNormal (0.03,0.0010) distributed. Suppose you deposit an amount of 4000...
Suppose the Japanese yen exchange rate is 82 5 $1, and the British pound exchange rate is 1 5 $1.47. a. What is the cross-rate in terms of yen per pound? b. Suppose the cross-rate is 124 5 1. Is...
A medical researcher classifies subjects according to male or female; smoker or nonsmoker; and underweight, average weight, or overweight. How many combined classifications are possible? (A) Solve...
Explain the ownership of and who can access a patients medical record.
The following costs result from the production and sale of 480,000 CD sets manufactured by Trace Company for the year ended December 31, 2011. The CD sets sell for $4.50 each. The company has a 25%...
Create the general journal entries, post to the T - Accounts, and record all applicable entries to the job sheets.a . Raw materials of $ 5 0 , 0 0 0 . 0 0 were purchased with cashb. Factory labor...
1. Identify the operations management problems that Dr. Barr is having at the clinic. 2. The schedule Dr. Barr set up worked well at the clinic where she was a resident. What are some of the reasons...
You are thinking about buying a savings bond. The bond costs $50 today and will mature in 10 years with a value of $100. What annual interest rate will the bond earn?
You have decided to buy a perpetual bond. The bond makes one payment at the end of every year forever and has an interest rate of 5%. If the bond initially costs $1000, what is the payment every year?
How would you expect a fall in a countrys population to alter its aggregate money demand function? Would it matter if the fall in population were due to a fall in the number of households or to a...
Explain the algorithm for quick sort and give a suitable example.
How does breadth first traversal work?
What is the difference between B Tree and B+ tree?
Explain how selection sort works with advantages?
What is the minimum number of nodes that a binary tree can have?
Rogot Instruments makes fine violins, violas, and cellos. It has $1.9 million in debt outstanding, equity valued at $2.8 million, and pays corporate income tax at a rate of 40%. Its cost of equity is...
How does Kant answer Humes bundle theory of self? Do you think he is successful?
The production of steel from iron ore is endothermic. To reduce the heat that must be supplied, engineers need to find the lowest temperature at which the desired reactions are spontaneous. Estimate...
What is commercial paper? Why does it not need SEC approval?
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. a. What is Mydecos market capitalization at the end of each year? b. What is Mydecos market-to-book ratio at the...
See Table 2.5 showing financial statement data and stock price data for Mydeco Corp. Suppose Mydeco repurchases 2 million shares each year from 2010 to 2013. What would its earnings per share be in...
1-2. Draw graphs of the following functions using transformations: 1. y = 2x-1 x-2' 2. y log2x+1|- 3.
Assume a simultaneous open market purchase of 100 million from the Bank of England and a repayment of a discount loan of 5 million from Bank A to the Bank of England. Show the overall change in their...
Let 1 f(z) = (2-1)(x-2) Find the Laurent expansion of f about z = 0 in the region {ze C: 1

You have an investment opportunity that requires an initial investment of $5000 today and will pay $6000

Question:

Step by Step Answer:

Plan Draw a timeline and determine th...View the full answer

Fundamentals of Corporate Finance

Students also viewed these Corporate Finance questions