Justin Lieberman must earn a minimum rate of return of 16.79% as compensation for the risk of the followinginvestmenta. Use present value techniques to estimate the IRR on this investment.b. On the basis of your finding in part a, should Justin make the proposed investment?a. The yield on this investment is %. (Round to two decimal places.)Data tableInitial InvestmentEnd of Year12345$15,119Income$3,957$4,879$5,900$3,601$2,000- XC

The internalrate of return is a discount rate that equates the NPV of an investment opportunity to…

Answered: Justin Lieberman must earn a minin um…

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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You are given the following information: Risky Asset Risky Asset Risk-free Asset Asset X Y Expected Return 9.6% 7.2% 3.5% Beta 1.63 1.09 Your Investment $5000 $3000 $2000 Alex's Investment $6000 $6000 $6000 Using the Capital Asset Pricing Model, the required return of your investment is 8.6%. Determine the alpha of Alex's investment. Possible Answers A Less than 0% B At least 0%, but less than 1% C At least 1%, but less than 2% D At least 2%, but less than 3% At least 3%
Calculate the geometric return of an investment with five year returns of 10%, (15%), 12%, 8% and (5%). Multiple Choice О 2.00% О 6.33% О 3.11% О 7.44% О 5.22%
Question 3 Given 10% discount rate, what is the profitability index of the investment project described below? 1.00 0.90 0.95 1.03 1.09 Question 4 What is the best method to use when expressing investment profitability as a percentage? Pick from the answers given below. Payback period Discounted payback period NPV AAR IRR
Help please
You're trying to choose between two different investments, both of which have up-front costs of $25,000. Investment G returns $60,000 in six years. Investment H returns $92,000 in nine years. Calculate the rate of return for each these investments. Note: Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16. Investment G Investment H % %
An investor is considering two investment projects. Project A requires an initial payment of £19,000. In return, the investor will receive a payment of £27,100 after one year. Project B requires an initial payment of £10,800. In return, the investor will receive a payment of £1,490 at the end of every month for one year. Calculate the cross-over rate of the projects 数字 Enter a percentage correct to 1 decimal place. %
Discuss the overarching idea of Asset Liability Management and its key objectives. How does the process of Gap Analysis support Asset Liability Management?
Find the IRR for an investment that has an initial outlay of 25,000 and is expected to achieve 30,000 after 7 years. O a. 1.4% Ob. 2.6% O c. 3.1% Od. 4.8% O e. None of the above Next page
Cash fllow End of year Amount Appropriate required return 1 0 2 0 3 0 4 to 15 0 4% 16 120000 a) Find the value of the bellow bond in order to assist ne with the investment decision
QUESTION 2 You expect to receive $100 in year 1, $150 in year 2, and $200 in year 3 if you invest in Project XYZ. The project requires you to make an initial investment of $150 in year 0. You also expect to incur the following expenses: $80 in year 1, $80 in year 2, $100 in year 3. Suppose the current discount rate is 10% and remain the same. Suppoe all cash flows are incurred at the end of each year. What is the dynamic payback period? (round to 2nd decimal place)
An investor is considering two investment projects. Project A requires an initial payment of £12,000. In return, the investor will receive a payment of £17,400 after one year. Project B requires an initial payment of £10,300. In return, the investor will receive a payment of £1,240 at the end of every month for one year. Calculate the cross-over rate of the projects 数字 Enter a percentage correct to 1 decimal place. % What is the payback period of each project? Project A:数字 Project B:数字 months months

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