ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter 7, Problem 4P
To determine

To find the annual rate of return.

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2. If a Plastics company purchases a new building now for $1.3 million for its corporate headquarters, what must the building be worth in 10 years? The company expects all expenditures to earn a rate of return at least 18% per year.
A man buys a corporate bond from a bond brokerage house for $925. The bond has a face value of $1000 and pays 4% of its face value each year. If the bond will be paid off at the end of 10 years, what rate return will the man receive?I know the answer is 4.97% I just need help with the process.
A savvy investor paid $5,500 for a 20-year $10,000 mortgage bond that had a bond interest rate of 8% per year, payable quarterly. Three years after he purchased the bond, market interest rates went down, so the bond increased in value. If the investor sold the bond for $11,500 three years after he bought it, what rate of return did the investor make per quarter and per year (nominal)? The rate of return per quarter is%. The rate of return per year is%.

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ENGR.ECONOMIC ANALYSIS

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