7. Consider the tape diagrams below, then answer the question that follows: 5,250 1,750 5,250-1,750 = 3,500 Which of the following problems could best be represented by the model above? You placed $4,200 in an investment account. After five years, the total amount in the account appreciated by 25%. At this point, you decided to withdraw onethird of the money a. in the account to move to a new investment. How much money was left in the account? b. You placed $5,250 in an investment account. After five years, the total amount in the account depreciated by 20%. It then depreciated by one-third. How much money was left in the account? A furniture dealer buys a sofa from his distributor for $4,200. However, he marks this price up by 20% when he sells it to you. You eventually sell the sofa for a third of what you paid for it. How much did you sell the sofa for? d. A furniture dealer sold you a sofa for 20% off of $5,250. If you eventually sell the sofa for one-third less than what you paid for it, for how much money did you sell the sofa? С.

7. Consider the tape diagrams below, then answer the question that follows: 5,250 1,750 5,250-1,750 = 3,500 Which of the following problems could best be represented by the model above? You placed $4,200 in an investment account. After five years, the total amount in the account appreciated by 25%. At this point, you decided to withdraw onethird of the money a. in the account to move to a new investment. How much money was left in the account? b. You placed $5,250 in an investment account. After five years, the total amount in the account depreciated by 20%. It then depreciated by one-third. How much money was left in the account? A furniture dealer buys a sofa from his distributor for $4,200. However, he marks this price up by 20% when he sells it to you. You eventually sell the sofa for a third of what you paid for it. How much did you sell the sofa for? d. A furniture dealer sold you a sofa for 20% off of $5,250. If you eventually sell the sofa for one-third less than what you paid for it, for how much money did you sell the sofa? С.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Below are four cases that you will have to solve using Excel spreadsheets. 2nd case The COMPETIDORA SA company has the possibility of investing in three different projects . The projections show us the following information on which a decision must be made: PROJECT X Y Initial Z$310,000 It is requested: investment $180,000 $250,000 Year 1 cash flows $50,000 $80,000 $150,000 1. Determine the internal rate of return. 2. Determine the present value. Year 2 cash flows 3. Determine the recovery period. 4. Define which is the most viable project. $70,000 $80,000 $120,000 The discount rate for the project will be 9% and the investors propose a MARR of 22%. Year 3 cash flows $80,000 $80,000 $100,000 Year 4 cash flows $100,000 $80,000
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You solve present value problems on a financial calculator just like you do future value problems. For the example we just examined (the present value of $1,000 to be received in three years at 15 percent), you would do the following: Enter 3. 15 1,000 I/Y PMT PV FV Solve for -657.52 Notice that the answer has a negative sign; as we discussed earlier, that's because it represents an out- flow today in exchange for the $1,000 inflow later.
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James heard about a good investment opportunity from his financial advisor, Bob. The interest rate for the investment is astonishingly 12% monthly. However, James lost all the information needed including the amount of deposit he should make, the investment perod, and future value. Fortunately, he still remembers part of the computation process that In(FV) was 375 and In(PV) was 352. What is the investment period? Start from solving the PV equation for t.

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