Nora is thinking about buying a small business for $100,000. She expects to earn profits of $10,000 per year for 5 years and then sell the business for $115,000 (also at the end of the fifth year). Calculate the IRR for the business. Round your answer to the nearest percent.
Q: Your younger sister, Brittany, will start college in five years. She has just informed your parents…
A: given, A = $30,000 r=10% n = 4 years
Q: Alicia is considering two offers-to-purchase that she has received on a residential building lot she…
A: The criteria of deciding the better payment offer will be judged on the basis of present value which…
Q: Steve Madison needs $250,000 in 10 years. How much must he invest at the end of each year, at 5%…
A: Annuity amount = Futur value of annuity amount / {[(1+r)^n-1] /r}
Q: John is considering the purchase of a lot. He can buy the lot today and expects the price to rise to…
A: Present Value: The present value is the value of the sum received at time 0 or the current period.…
Q: EBEYAYEE" Ltd. has a goal to have GH $50,000 saved by the time she turns sixty- five, which is forty…
A: Present value will be calculated after discounting the future value at present. Present value will…
Q: Ms. Cruz can buy a piece of property for ₱6,500,000 cash or ₱4,000,000 down payment and ₱4,200,000…
A: In this question, we have to analyze the two option of buying the property one is cash basis and…
Q: An engineering student decides to accumulate $500,000 by her sixt pects to start by investing a…
A: Explanation of Concept:- Annual worth concept which is been used in the present problem states that…
Q: You want to set aside money in order to present your son with a 25,000 trip upon his graduation from…
A: Present value is the current worth of the future payment. ------------------------------ Given:…
Q: Justine is thinking about purchasing an investment from RCBC Capital. If she buys the investment,…
A: Receipts = 1000 every quarter for 2 years Beginning of period payments Time Period = 2 years * 4 = 8…
Q: Question 1 What would be the better outcome, renting or buying and by how much? (Show your work and…
A: Pierre is deciding on whether he should buy a house or rent it. If rented the expense will be $1500…
Q: Stuart Daniels estimates that he will need $24,000 to set up a small business in 8 years. (a) How…
A: The formula used as follows: A=P1+rnn×t
Q: Sue decides to start saving money for a new car. She knows she can invest money into an account…
A: According to time value of money, FV=PV×1+RMM×N Where, PV = present value R = rate of interest M=…
Q: Sarah Wiggum would like to make a single investment and have $2.0 million at the time of her…
A: Let the single investment today = P Future value needed = $2 million n = 35 years r = 4%
Q: Sarah Wiggum would like to make a single investment and have $2.0 million at the time of her…
A: Future value (FV) = $2,000,000 Rate of return (r) = 0.04 Period (t) = 35 years Present value (P0) =…
Q: Suzy wants to buy a house but does not want to get a loan. The average price of her dream house is…
A: Annuity is the recurring cashflow for a fixed interval. Future value of annuity (FVA) formula:…
Q: Sarah Wiggum would like to make a single investment and have $2.0million at the time of her…
A: Amount required in 35 years or future value (FV) = $2,000,000 Period (p) = 35 years Rate of return…
Q: Nabil is considering buying a house while he is at university. The house costs $200 000 today.…
A: Given, Discounting rate=6%12 months=0.5% per month Period=5 years×12 months=60 months
Q: You are a young urban professional in your late 20’s and want to save up for your wedding and other…
A: The question is based on the concept of interest calculation on investment based on Minimum Accepted…
Q: Your friend is considering investing in a two-year MBA program. Tuition costs will be $60,000 for…
A: An investment is a type purchase of an item or thing with the goal of earning income or rising in…
Q: Nabil is considering buying a house while he is at university. The house costs $200 000 today.…
A: Cost of House = $200,000 MARR = 6% Monthly Savings = $2000 Selling Price of House after 5 years =…
Q: Mr. and Mrs. Davis needs to have $100,000 to start their own catering business in 15 years. They…
A: Future value (FV) of the savings should be $100000.Number of years ( n ) of savings/investment is 15…
Q: Your brother has asked you for a loan and has promised to pay back $7,750 at the end of three years.…
A: Present value is the worth of amount in current time that is expected to be receive in some future…
Q: A) Rick is thinking about quitting his current job, which pays a salary of $54,000 per year, to own…
A: Annual profit refers to the financial profit which is realized after deducting all expenses related…
Q: After graduation you plan to work and stay for 10 years and then start your own business. You…
A:
Q: Your cousin Vance tells you that you can invest $15,000 in his business, and he will pay you back…
A: An investment is refer as an asset purchased with intention to earn income at some time in future.…
Q: Bob has saved $ 5000 towards the purchase of a car costing $ 7000. For how many months does Bob need…
A: When the interest is computed on the principal amount along with all the previously accumulated…
Q: Adrian, a single man who wants to buy a house in five years, read an artide that recommended a down…
A: The amount borrowed will be equal to the present value of all the future payment made at the given…
Q: Melissa wants to retire with $45,000 per month.she needs $4,500,000 in principal at the time she…
A: Simple interest is computed by multiplying the daily interest rate by the principal and later by…
Q: Isabella purchased $20,000 worth of 26-week T-Bills for $19,700. What will be the rate of return on…
A: Initial investment (P) =$19,700 Maturity value(S)=$20,000 since maturity period is 26 week= 26*7=182…
Q: Every year, you receive your entire annual salary at the end of the year. This year, your…
A: Inflation rate With nominal rate and real rate, the inflation rate is calculated as show below.…
Q: You are graduating in two years and are thinking about your future. You know that you will want to…
A: FV is the future worth of cash flows that have occurred in the past or present.
Q: sty needs to have $20,000 at the end of 6 years to fulfill her goal of purchasing a small…
A: Compound interest is determined by multiplying the starting principal balance by one and then…
Q: Stuart Daniels estimates that he will need $26,000 to set up a small business in 9 years. (a) How…
A: We need to calculate present value that is required to be invested today to get desired…
Q: Zachary has purchased an investment that he expects to produce income of $3,000 at the end of the…
A: IRR is the rate at which NPV is zero
Q: Nabil is considering buying a house while he is at university. The house costs $200 000 today.…
A: Net present value is the technique used in capital budgeting to evaluate the acceptability of the…
Q: David is interested in a rental apartment that would supply him with $60,000 at the end of year 1,…
A: The amount that David should pay for this investment should be equal to the NPV of all cash flows.…
Q: Your friend is considering investing in a two-year MBA program. Tuition costs will be $60,000 for…
A: (Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the…
Q: Your client is 40 years old, and she wants to begin saving for retirement, with the first payment to…
A: Given: Yearly deposit = $5000 Interest = 11% Total time = 25 years (65 -40 =25) 1.Using…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $16,000 at the end of each of the next 3 years. The opportunity requires an initial investment of $4,000 plus an additional investment at the end of the second year of $20,000. What is the NPV of this opportunity if the interest rate is 3% per year? Should Marian take it? The NPV of this opportunity is $____ (Round to the nearest dollar.)Your cousin plans to expand his business and will require $100,000.00 in 6.5 years. The rate of return will be 0.70 percent per month for the first two years. It will go up to 1.00 percent for the rest of the period. Compute the $ amount to set aside today to reach her objective.Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $4,600 at the end of each of the next 3 years. The opportunity requires an initial investment of $1,150 plus an additional investment at the end of the second year of $5,750. What is the NPV of this opportunity if the interest rate is 1.9%per year? Should Marian take it? What is the NPV of this opportunity if the interest rate is per year?
- marian plunket owners her own business and is considering an investment. If she undertakes the investment, it will pay $32,000 at the end of each of the next 3 years. The opportunity requires an initial investment of $8,000 plus an additional investment at the end of the second year of $40,000. What is the NPV of this opportunity if the interest rate is 8% per year? Should marian take it?Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $5,280 at the end of each of the next 3 years. The opportunity requires an initial investment of $1,320 plus an additional investment at the end of the second year of $6,600. What is the NPV of this opportunity if the interest rate is 2.1% per year? Should Marian take it? What is the NPV of this opportunity if the interest rate is 2.1% per year? The NPV of this opportunity is $. (Round to the nearest cent.)Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $40,000 at the end of each of the next 3 years. The opportunity requires an initial investment of $ 10,000 plus an additional investment at the end of the second year of $50,000. What is the NPV of this opportunity if the interest rate is2% per year? Should Marian take it?
- Use the attached present and future value tables to answer the following questions: Tom pays $2,400 per year for rent on the first of January each year. He wants to deposit an amount in his 6% investment today that will allow him to draw $2,400 each year for the next 5 years. How much will he need to deposit today in order to draw $2,400 per year for 5 years? Round percentages and ratios to the nearest tenth of a percent, dollars to nearest whole dollar ________dollarsMarian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $4,440 at the end of each of the next 3 years. The opportunity requires an initial investment of $1,110 plus an additional investment at the end of the second year of $5,550. What is the NPV of this opportunity if the interest rate is 1.5% per year? What is the NPV of this opportunity if the interest rate is 1.5% per year? The NPV of this opportunity is $_______ (Round to the nearest cent)Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $5,440 at the end of each of the next 3 years. The opportunity requires an initial investment of $1,360 plus an additional investment at the end of the second year of $6,800. What is the NPV of this opportunity if the interest rate is 1.6% per year? Should Marian take it?
- If she starts now, how much does Sally need to save each month for the next 9 years to accumulate $110,000 to be able to buy her dream vacation property. Assume she will be able to get a 2.5% annual rate of return on the savings. Input your answer to the nearest dollar. Answer: Check 4Your mother wants to buy a car which will cost $15,000 five years from today. She would like save $2,450 at the end of each year (for the next five years) in an account, so as to have the amount she needs. What interest (to the closest percent) must she earn in this account to achieve this financial objective?Justine is thinking about purchasing an investment from RCBC Capital. If she buys the investment, Justine will receive P1,000 every three months for two years. The first P1,000 payment will be made as soon as she purchases the investment. If Justine's required rate of return is 16%, how much should she be willing to pay for this investment? a.P1,368.57 b.P10,764.80 c.P1,345.60 d.P7,002.05