a) Calculate the net present value for both projects. Answer to the nearest cent b) Find the internal rate of return for both projects. Answer as a percent to 2 decimals. c) Which of these projects you would choose to invest in and why?
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- Lorenz curves also can be used to provide a relative measure of the distribution of the total assets of a country. Using data in a report by the economic committee of a certain country, an economist produced the following Lorenz curves for the distribution of total assets in the country in 1963 and 1983, shown below. f(x) = x10 Lorenz curve for 1963 g(x) = x13 Lorenz curve for 1983 Find the Gini index of income concentration for each Lorenz curve and interpret the results. .... What is the Gini index for 1963? (Round to three decimal places as needed.) What is the Gini index for 1983? (Round to three decimal places as needed.) Interpret your results. O A. Total assets were more equally distributed in 1963 O B. Total assets were more equally distributed in 1983 O c. Total assets were distributed the same in 1963 as in 1983.Question 2. Based on the following cash flow diagram, calculate the value of X with the interest rate of 10%. 150$ 150$ 15o$ 150$ 150$ 150$ 150$ 75$ 10 11 X= ?Economics In 54 months time you expect a cash flow of $3 million. Calculate it’s present value (PV) given the 54-month interest rate is currently 4%, with a volatility of 120 basis points (bps). Explain, using equations with properly-defined mathematical notation, how to map this cash flow to vertices at 4 years and 5 years, in such a way that the volatility of the present value of the mapped cash flow remains at 120 bps. Suppose the 4-year rate has a volatility of 110 bps and the 5-year rate has a volatility of 150 bps, and their correlation is 0.9. How much should be mapped to each vertex. Give your answer in PV terms and round your answers to whole $ values.
- QUESTION 6 What is the net present value of receiving $250 in 5 years from now if the interest rate is 12%? 141.86 142.56 140.34 139.55You are planning to invest $4,000 in an account earning 8% per year for retirement. a. If you put the $4,000 in an account at age 23, and withdraw it 50 years later, how much will you have? b. If you wait 10 years before making the deposit, so that it stays in the account for only 40 years, how much will you have at the end? a. If you put the $4,000 in an account at age 23, and withdraw it 50 years later, how much will you have? In 50 years you would have $750424. (Round to the nearest cent.)Problem #1: Gwen just bought solar panels to power ventilation at her chicken farm. The panels cost $2000 and will reduce her electricity bills by $40 per month. How long will it take her to recoup her investment in the panels if she can warn 12% interest, compounded monthly, on her money? (Hint: You can use either the Capital Recovery Factor formula or the Series Present Worth Factor formula, or you can use linear interpolation!)
- An investor can invest money with a particular bank and earn a stated interest rate of 4.40%; however, interest will be compounded quarterly. What i are the nominal, periodic, and effective interest rates for this investment opportunity? Interest Rates Nominal rate Periodic rate Effective annual rate Rahul needs a loan and is speaking to several lending agencies about the interest rates they would charge and the terms they offer. He particularly likes his local bank because he is being offered a nominal rate of 4%. But the bank is compounding bimonthly (every two months). What is the effective interest rate that Rahul would pay for the loan? ○ 3.945% 4.152% 4.067% 04.186 % Another bank is also offering favorable terms, so Rahul decides to take a loan of $12,000 from this bank. He signs the loan contract at 5% comanded daily for 12 months. Based on a 365-day year, what is the total amount that Rahul owes the bank at the end of the loan's term? (Hint: To calculate the number of days,…John is a very cost-conscious investor. His rule of thumb is that it costs $300 per year, starting in the first year of vehicle life to maintain an automobile. This expense increases by $300 each year over the life of the car. John is now considering the purchase of a five-year old car with 40,000 miles on it for $9,000. How much money will John have to set aside now to pay for maintenance (as a lump sum) if he keeps this car for six years? John's interest rate is 4% per year. Click the icon to view the interest and annuity table for discrete compounding when i = 4% per year. John will have to set aside $ to pay for maintenance. (Round to the nearest dollar.)John is a very cost-conscious investor. His rule of thumb is that it costs $200 per year, starting in the first year of vehicle life to maintain an automobile. This expense increases by $200 each year over the life of the car. John is now considering the purchase of a five-year old car with 50,000 miles on it for $9,000. How much money will John have to set aside now to pay for maintenance (as a lump sum) if he keeps this car for seven years? John's interest rate is 6% per year. Click the icon to view the interest and annuity table for discrete compounding when i = 6% per year. John will have to set aside $ to pay for maintenance. (Round to the nearest dollar.)
- 3 100 The marginal profit from producing x widgets is given by P'(x) = 72,600e-0.12x. Suppose it were possible for this firm to make infinitely many widgets. What would its total profit be? 11) Find the accumulated present value of an investment for which there is a perpetual continuous money flow of $21,000 per year. Assume that the interest rate is 3.5% compounded continuously. 12) Find the capitalized cost with co= $375,000, k = 2.5%, and m(t) = $12,000. Round to the nearest dollar. 0 20 5. hpJohn is a very cost-conscious investor. His rule of thumb is that it costs $300 per year, starting in the first year of vehicle life to maintain an automobile. This expense increases by $300 each year over the life of the car. John is now considering the purchase of a six-year old car with 40,000 miles on it for $7,000. How much money will John have to set aside now to pay for maintenance (as a lump sum) if he keeps this car for seven years? John's interest rate is 4% per year. Click the icon to view the interest and annuity table for discrete compounding when i = 4% per year. John will have to set aside $ to pay for maintenance. (Round to the nearest dollar.)John is a very cost-conscious investor. His rule of thumb is that it costs $250 per year, starting in the first year of vehicle life to maintain an automobile. This expense increases by $250 each year over the life of the car. John is now considering the purchase of a four-year old car with 50,000 miles on it for $8,000. How much money will John have to set aside now to pay for maintenance (as a lump sum) if he keeps this car for seven years? John's interest rate is 7% per year. Click the icon to view the interest and annuity table for discrete compounding when i= 7% per year. John will have to set aside $ to pay for maintenance. (Round to the nearest dollar.)