Suppose that you plan to invest $1500 at the end of each of the next 9 years, and you want to have accumulated $19,500 at the end of this period, what rate of return would you need to achieve? 10% 9% 8% 11% 12%

Suppose that you plan to invest $1500 at the end of each of the next 9 years, and you want to have accumulated $19,500 at the end of this period, what rate of return would you need to achieve? 10% 9% 8% 11% 12%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 14EA: How much must be invested now to receive $30,000 for 10 years if the first $30.000 is received one...

See similar textbooks

Related questions

Q: Subject :- Finance An waste management company is intent to make an investment of $10,100, that…

A: Initial Investment = $10,100 Annual revenue = $5310 Additional return each year = $3000 Rate of…

Q: The firm just paid an annual dividend of $0.8 per share and plans to increase that amount by 25%…

A: The dividend decision is an important decision for the company because it of healthy over all…

Q: What is the present value amounts to $14,332.50 of it is invested for 2 years at 5% compounded…

A: Future value = $14,332.50 Period = 2 years Interest rate = 5% compounded annually

Q: Suppose the current price of gold is $1,300 an ounce. Hotshot Consultants advises you that gold…

A: Present value (PV) is the value today of a future payment, or a series of future payments,…

Q: You are considering how to invest part of your retirement savings. You have decided to put $200,000…

A: Return on stocks refers to the minimum return to be earned over the investment made initially. It is…

Q: Question 10 NFLX just paid a dividend of $4 per share. Analysts expect its dividend to grow at 29%…

A: This is based on the dividend discount model. The dividend discount model says that price of a stock…

Q: Zinc Corporation is developing its cash budget for this month. Each month, the firm manufactures and…

A: Cash budget is that which consider all the cash transaction which is done during that period for…

Q: Pollo Inc.'s 5.38% bonds have a YTM of 7.79%. The estimated risk premium between the company's bonds…

A: Cost of common equity can be computed using different methods. Popular methods are CAPM (capital…

Q: Find the present value of the annuity that will pay $850 every month for 3 years from an account…

A: To calculate the present value we will use the below formula Present value = P*[1-(1+r)-n]/r Where…

Q: explain how to price a currency swap if either set of payments is at a floating rate.…

A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Q: A research analyst wants to use the discounted free cash flow model to determine the enterprise…

A: The concept of Freecash flow is an important decision making criteria because the free cash flow…

Q: Braun Industries is considering an investment project that has the following cash flows: Year 0 1 2…

Q: You find a bond with 20 years until maturity that has a coupon rate of 5.0 percent and a yield to…

A: Years to maturity = 20 years Yield to maturity = 4.9% Coupon rate = 5% Par value = $1000

Q: Suppose that put options on a stock with strike prices $30 and $35 cost $4 and $7, respectively.…

A: The bull spread would use a strike price of $35 and cost C1 $7 by writing put option and buy put…

Q: Which of the following bond has no reinvestment risk? A bond that has a higher coupon rate than the…

A: Let us first understand what reinvestment risk is. Reinvestment risk is the chance of not being able…

Q: Accusoft Systems is offering small business owners a software package that keeps track of many…

A: Pay back period is that period under which investor will received his invested amount refund. It is…

Q: Accusoft Systems is offering small business owners a software package that keeps track of many…

A: Pay back period is that period under which investor will received his invested amount refund. It is…

Q: Using illustrations where possible, discuss the components of a policy statement

A: A policy statement is a document that outlines an organization's stance on a particular issue or set…

Q: Meiji Isetan Corporation of Japan has two regional divisions with headquarters in Osaka and…

A: Margin :— It is calculated by dividing net operating income by sales. Turnover :— It is…

Q: Company A and B have been offered the following rates per annum on a £50 million, 10 - year loan.…

A: Company A and B have been offered the following rates per annum on a £50 million, 10 - year loan.…

Q: Suppose Bill purchases a car and he is going to finance $12,000 for 24 months at an APR of 5.1%…

A: compound = monthly = 12 Present Value = pv = $12,000 Time = t = 24 Interest rate = 5.1 / 12 =…

Q: Nestor Company is considering the purchase of an asset for $110,000. It is expected to produce the…

A: The payback period represents the period in which the initial outlay cost of the project will be…

Q: Consider a put option on a stock that currently sells for £100, but may rise to £120 or fall to £80…

A: In an option market if investor expects that share price will increase in near future then he will…

Q: discuss the put-call parity of options on futures, and use it to value put options on futures.…

A: Put-call parity is a principle that applies to options trading and states that the price of a call…

Q: Mega Pharma, Inc. (MPI) is considering merging with a smaller, independent company, SuperDrug, Ltd.…

A: Data given: Present value of incremental cash flow=$5,000,000 No. of outstanding shares of…

Q: Big Tech Corporation is considering replacing one of its machines with a more efficient one. The old…

A: NPV represents the value in absolute profitability generated by a project from its cash flows.

Q: Advanced Micro Devices had a total debt ratio of .48 at one time. What is the equity multiplier? O…

A: Equity multiplier is calculated using following equation Equity multiplier = 11-Debt ratio

Q: a)define interest rate swaptions, and differentiate between payer swaptions and receiver swaptions.…

A: The Swap contract is financial agreement between two parties these contract involve variety of…

Q: Listen The risk-free rate is 1.45% and the market risk premium is 5.21%. According to the Capital…

A: Capital Asset Pricing Model (CAPM) is an alternative model to find out the required rate of return…

Q: 3. Scott deposits 80 today into an account that credits a nominal interest rate of 6% compounded…

A: Data given: Scott: PV=80 Rate=6% (compounded quarterly) =6%/4=1.5% N=18 years nper=18*4=72…

Q: Dani Corporation has 5.5 million shares of common stock outstanding. The current share price is $83,…

A: The capital structure refers to the pattern in which the total assets of a firm are financed by…

Q: Which of the following bond has the highest reinvestment risk? Bond Coupon Rate 8% A B C C A B 6% 6%…

A: A bond is an instrument used to raise debt capital from investors in place of traditional financial…

Q: kirk is considering the construction of a new facility in Oklahoma. The facility will cost Newkirk…

A: The new facility in Oklahoma costs Newkirk $500 Million capital , the firm considering a target debt…

Q: )define market risk. b)define delta-hedged position and describe delta hedging.…

A: Market risk is the potential for financial loss that arises from adverse movements in market prices,…

Q: Netglobe Ltd is a well established company providing telecommunications services. An analyst has…

A: Growth rate after year 3 = 3% WACC = 10% FCF3=FCF1(1+gs)3 =$16 million×(1+0.05)3 =$18.522 million…

Q: You plan to buy a stock at a price of $190.8 today. The stock does not yet pay a dividend and you…

A: The overall return on investment from income and asset growth over a period of time is known as the…

Q: explain the structure of a pay-fixed, receive-fixed currency swap, and describe the cash flows at…

A: It seems like there may be a typo in your question. A pay-fixed, receive-fixed currency swap would…

Q: Quantitative Problem: Bellinger Industries is considering two projects for inclusion in its capital…

A: Net Present Value is also known as NPV. It is a capital budgeting techniques which help in decision…

Q: Compute the NPV and IRR for project whose initial cost is 30,000 and cash inflows are 14000, 8200,…

A: The NPV calculation determines if an investment is worthwhile by taking into account the time value…

Q: questions) Question 19: In the following diagram about XXX Ltd, there are currently four investment…

A: In the graph above, they are choosing the project's based on WACC as the minimum expected return.…

Q: Kaiser Aluminum has a beta of 0.70. If the risk-free rate (RRF) is 5.0%, and the market risk premium…

A: The Capital Asset Pricing Model implies the rate of return on any security equals the risk less rate…

Q: Consider the following annual returns of Clearwater Beer and Bed & Bath Corporation. 1 2 3 4 5 6949…

A: Risk refers to the variability or uncertainty of an investment's returns. The greater the chance of…

Q: Which of the following is a difference between stocks and bonds? Select one: a. cash flows to…

A: Stocks are the unit of ownership in the company. Companies issue stocks or shares as equity to the…

Q: Venture Finance: Given the exit equation (Series A) = C (12) - C (15) + 1/2 * C (24) - 1/6 * C (46).…

A: Venture Finance refers to financing a new startup or early-stage company with capital financing…

Q: Define each of the following terms: a. Liquid asset b. Liquidity ratios: current ratio; quick ratio…

A: “Since you have posted multiple questions with multiple sub parts, we will provide the solution only…

Q: Draw the profit diagram (profit not payoff) of a portfolio consisting of a long position in two call…

A: The payoff diagram for a portfolio consisting of various long and short positions in call options…

Q: DMV, Inc., is considering a new three-year expansion project that requires an initial fixed asset…

A: Net present is the defence between present value of all cash inflow and initial investment NPV = PV…

Q: Here are simplified financial statements for Watervan Corporation: INCOME STATEMENT (Figures in $…

A: For the calculation of return on capital we have to use: Income before tax $ 85.00 Taxes 17.85…

Question

Suppose that you plan to invest $1500 at the end of each of the next 9 years, and you want to have
accumulated $19,500 at the end of this period, what rate of return would you need to achieve?
10%
9%
8%
11%
12%

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction of rate of return

VIEW

Step 2: Calculation of rate of return

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
How much must be invested now to receive $30,000 for 10 years if the first $30.000 is received one year from now and the rate is 8%?
How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
You currently have $8,700 to invest. You can invest the full amount now for a period of 9 years at which time you want to have $15,000. Approximately what rate of return is needed to accomplish this investment goal? O 6.50% O 6.24% O 4.65% 5.59%
Suppose you are offered an investment opportunity that will pay $2,500 in five years if you invest $2,000 today. What is the implied rate of return? A) 4.56% B) 4.00% C) 5.00% D) 3.62% E)25.00%
If you invest $11,000 today, how much will you have in each of the following scenarios? (Click here to see present value and future value tables) A. 10 years at 8% B. 8 years at 12% C. 15 years at 15% D. 18 years at 5%
You hope to have $35,000 in your investment account in ten years. If you invest $25,000 today, what annual rate of return would your investment account need to generate if you make no future deposits? Group of answer choices 3.4% 3.8% 40.0% 1.7%
You are going to invest $5405 in 3 years and $7923 in 6 years. If you expect to earn a return of 8.26%, how much will you have in 10 years? Answer:
Assume you invest $5,100 today in an investment that promises to return $6,928 in exactly 10 years. a. Use the present-value technique to estimate the IRR on this investment. b. If a minimum annual return of 9% is required, would you recommend this investment? #69 Part 1 a. The IRR of the investment is enter your response here%. (Round to the nearest whole percent.) Part 2 b. If a minimum return of 9% is required, would you recommend this investment? (Select the best choice below.) A. No, because this investment yields less than the minimum required return of 9%. B. Yes, because a minimum required return of 9% does not compensate for an investment that lasts longer than one year. C. No, because a minimum required return of 9% is an arbitrary choice for an investment of this risk level. D. Yes, because this investment yields more than the minimum required return of 9%
Suppose you invest $2,000 today and receive $11,000 in five years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $2,000 upfront, but pays an equal amount at the end of each year for the next five years. If this investment has the same IRR as the first one, what is the amount you will receive each year?
Suppose you invest $3,000 today and receive $10,000 in 25 years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? a. What is the internal rate of return (IRR) of this opportunity? The IRR of this opportunity is%. (Round to two decimal places.) b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? The periodic payment that gives the same IRR is $ (Round to the nearest cent.)
You have $1725 to invest. You know that a particular investment will double your money in five years. How much will you have in 10 years if you invest in this investment, assuming that the annual rate of return is guaranteed for the time period? Cevap: