Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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3.
Thanks to social media, the happiest creature on earth, an always smiling Australian marsupial called a quokka, has
become well known. Suppose that the weights in pounds of the adorable quokka follow the Normal model N(11,2.2).
What weight would you consider to be unusually low for such an animal? Explain.
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Transcribed Image Text:Thanks to social media, the happiest creature on earth, an always smiling Australian marsupial called a quokka, has become well known. Suppose that the weights in pounds of the adorable quokka follow the Normal model N(11,2.2). What weight would you consider to be unusually low for such an animal? Explain.
Required information
A potential investment has a cost of $395,000 and a useful
life of 6 years. Annual cash sales from the investment are
expected to be $267,382 and annual cash operating
expenses are expected to be $105,332. The expected
salvage value at the end of the investment's life is $50,000.
The company has a before-tax discount rate of 17%.
Required:
Calculate the following. (Round dollar amounts to the nearest whole dollar
and IRR to one decimal place (i.e. .055 = 5.5%). Enter negative amounts with a
minus sign.)
Annual PMT of the investment
FV of the investment
NPV of the investment
IRR of the investment
$
$
tA
%
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Transcribed Image Text:Required information A potential investment has a cost of $395,000 and a useful life of 6 years. Annual cash sales from the investment are expected to be $267,382 and annual cash operating expenses are expected to be $105,332. The expected salvage value at the end of the investment's life is $50,000. The company has a before-tax discount rate of 17%. Required: Calculate the following. (Round dollar amounts to the nearest whole dollar and IRR to one decimal place (i.e. .055 = 5.5%). Enter negative amounts with a minus sign.) Annual PMT of the investment FV of the investment NPV of the investment IRR of the investment $ $ tA %
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