Suppose you are considering whether to purchase a house off of Lake Erie for $400,000.  You expect the total costs of maintaining the property (utilities, repairs, etc.) to equal $15,000/year, and that you would be able to generate $35,000/year in revenue if you were to put the house on the short term rental market.  Suppose you are deciding between purchasing the home or whether to invest $400,000 in an interest-bearing account.  If your objective is to maximize your own net income, what would the interest rate have to equal for you to invest in the interest-bearing account?     Can you help me just figure out how to set this up? I get that we need the investment to equal 20k but not sure on how to figure

Question 6 Suppose you are interested in buying a one-year 1,000 dirham bond. You have two options available in the bond market: Option 1 - Emirates Airline bond that pays a coupon rate of 4.75% per year paid annually. Option 2 - Emaar bond that pays a coupon rate of 6.0% per year paid annually. If you decide to buy the Emirates Airline bond, which of the prices below will give you a return approximately equal to the Emaar bond? O a. 956.9 dirhams Ob.973.2 dirhams O. 995.2 dirhams Od. 988.2 dirhams

A firm that owns and manages rental properties is considering buying a building that would cost $800,000 this year, but would yield an annual revenue stream of $50,000 per year for the foreseeable future. For what range of interest rates would this purchase increase the present value of the firm?

Tim lives in Vancouver and runs a business that sells pianos. In an average year, he receives $733,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $433,000; he also pays wages and utility bills totalling $257,000. He owns his show room; if he chooses to rent it out, he will receive $13,000 in rent per year. Assume that the value of this show room does not depreciate over the year. Also, if Tim does not operate this piano business, he can work as a paralegal, receive an annual salary of $23,000 with no additional monetary costs, and rent out his show room at the $13,000 per year rate. No other costs are incurred in running this piano business.

Suppose you have a monthly income of $1000, $850 in monthly expenses, and you can put money in a savings account that yields a monthly interest rate of 4%. Now suppose you have an opportunity to invest your money at a 12% return. Further suppose you are able to borrow at 3%. Assuming you invest all of your money and then borrow against your future payout, show your trade-off between present and future consumption. If you still need to consume $850 in the present, how much will you have to spend in the future?

Kenji lives in Mississauga and runs a business that sells pianos. In an average year, he receives $723,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $423,000; he also pays wages and utility bills totalling $267,000. He owns his show room; if he chooses to rent it out, he will receive $2,000 in rent per year. Assume that the value of this show room does not depreciate over the year. Also, if Kenji does not operate this piano business, he can work as a financial advisor, receive an annual salary of $20,000 with no additional monetary costs, and rent out his show room at the $2,000 per year rate. No other costs are incurred in running this piano business. Identify each of Kenji's costs in the following table as either an implicit cost or an explicit cost of selling pianos. Implicit Cost The wages and utility bills that Kenji pays The salary Kenji could earn if he worked as a financial advisor The rental income Kenji could receive if he…

Suppose that your business has an opportunity to buy a machine that produces widgets. The machine can produce 13,500 widgets per year that you can sell for a profit of $1.60 per widget. With proper maintenance, the machine can run indefinitely. You decide that your minimum annual rate of return for any investment is 12 percent. What is the maximum price you would be willing to pay for the machine? Instructions: Round your answer to the nearest dollar. Maximum price =

Ben Hunt operated a farm under the name of S.B.H. Farms.  Hunt went to Mollary Bank and Trust and requested a loan to build hog houses, buy livestock, and expand farming operations.  The bank agreed to loan S.B.H. Farms $175,000, for which short-term promissory notes were signed by Hunt.  At the same time, oral discussions were held with the loan officer regarding long-term financing for the farm operations.  No dollar amount, interest rate, or repayment terms were discussed.  When Hunt defaulted on the short-term notes, the bank foreclosed on the farm.  Hunt counterclaimed for $750,000 damages, alleging that the bank had breached a contract for long-term financing.  Was there a valid offer for long-term financing offered by the bank?

Ben is a retired budget auditor who is currently looking for a new investment opportunity. He is considering two investments: Calzone Zone, a small restaurant specialising in calzone, and Icetown, a skating and curling rink. The projected cash flows of the two investments are shown below. Ben can only choose one projects, so he asks for your help and advice in reaching a decision on which investment to accept. He tells you he requires a 5% rate of return on his investment. Calzone Icetown Zone Cash flows £000 £000 Initial investment (885) 150 (300) 215 Cash flows year 1 Cash flows year 2 Cash flows year 3 Cash flows year 4 Cash flows year 5 195 215 200 230 265 215 215 (585) Assume the initial investment arises at the start of the first year of the project and all the subsequent cash flows occur at the end of the year. Question A. What are the economic factors reflected in the required rate of return? Discuss the likely effects of the economic shock brought by the COVID-19 pandemic on…

Hua Xing runs a lawn care service. Buying an additional riding lawn mower will cost $3,000 but would allow her firm to earn $1,000 of additional revenue each year for the next four years. She expects marginal efficiency of capital to be at least 10%. Which statement is an accurate description of this investment opportunity? a) Hua Xing should make the investment because turning $3,000 into $4,000 provides a rate of return of 33%. b) Hua Xing should not make the investment because it has a negative net present value. c) Hua Xing should not make the investment because it provides only a 5.16% return on investment. Od) Hua Xing should make the investment because the internal rate of return exceeds 10%.