(Ignore income taxes in this problem.) If an investment of $14,760 now will yield $18,000 at the end of one year, then the internal rate of return for this investment to the nearest whole percentage is: Select one: a. 14% b. 18% c. 22% d. 28%
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- Assume that at the beginning of the year, you purchase an investment for $7,200 that pays $100 annual income. Also assume the investment's value has decreased to $6,800 by the end of the year. (a) What is the rate of return for this investment? (Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.) Rate of return % (b) Is the rate of return a positive or negative number? Positive O NegativeFind the internal rate of return for the following investment (yes I want the actual rate). Is it a good idea if MARR=10%? Year 2$ -160,400 75,000 -32,000 55,000 32,500 69,500 1 3 4Q1 (A). An investment of $100 produces rate of return as follows In year 1: a gain of 10 percent In year 2: a loss of percent In year 3: a loss of 8 percent In year 4: a gain of 3 percent. Calculate the value of the investment at the end of the fourth year and calculate the mean annual rate of return.
- Assume that at the beginning of the year, you purchase an investment for $6,300 that pays $130 annual income. Also assume the investment's value has increased to $6,900 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places. Rate of return % b. Is the rate of return a positive or a negative number? Positive NegativeTrestle Corporation wants to purchase a new finishing machine. They currently have an old machine, which is operable for five more years and is expected to have a zero-disposal value at the end of five years. If the company buys the new machine, the old machine will be sold now for $95,000 (book value is $75,000). The new machine will cost $635,000 and will be depreciated for tax purposes on a straight-line basis over its useful life of 5 years. The new machine will not have a salvage value and will not be sold after its useful life. An additional cash investment in working capital of $25,000 will be required if the new machine is purchased. The investment is expected to net $80,000 in before tax cash inflows during the first year of operation and $235,000 each additional year of use. These cash flows do not include depreciation and are recognized at the end of each year. The working capital investment will not be recovered at the end of the asset's life. The company's tax rate is 32%.Suppose you makes a $1,000 initial investment today, a $4,000 additional investment at the end of year one, and another $500 investment at the end of year two. You had returns of 10% in year one, 2% in year two, and -5% in year three. What is the dollar-weighted average return on your investments? Select one: a. -2.59% b. 10.00% c. 0.51% d. -0.73% e. 3.00%
- 7. Find the IRR of an investment of 50,000 ETB, whose receipts in the next four years are ETB 15,000, ETB 15,000, ETB 20,000 and ETB 20,000 respectively. Is the investment viable if the minimum attractive rate of return (MARR) is 10% per annual?a. Calculate the following Periodic Total Returns on a 5-year investment. To your calculations, assume that you have selling costs of 5% Year NCF (€) Market Value (€) Total Return 95,000 95,000 1. 10,000 98,000 5,000 100,000 8,000 101,000 4 12,000 103,000 135,000 117,000 b. If the quarterly Income Return is 2.2% and the Quarterly Capital Return is 0.4%, calculate the Annual Total Return of the investment 2. 3.Assume you invest $5,100 today in an investment that promises to return $6,928 in exactly 10 years. a. Use the present-value technique to estimate the IRR on this investment. b. If a minimum annual return of 9% is required, would you recommend this investment? #69 Part 1 a. The IRR of the investment is enter your response here%. (Round to the nearest whole percent.) Part 2 b. If a minimum return of 9% is required, would you recommend this investment? (Select the best choice below.) A. No, because this investment yields less than the minimum required return of 9%. B. Yes, because a minimum required return of 9% does not compensate for an investment that lasts longer than one year. C. No, because a minimum required return of 9% is an arbitrary choice for an investment of this risk level. D. Yes, because this investment yields more than the minimum required return of 9%
- The present worth of income from an investment that follows an arithmetic gradient was projected to be P 475,000. Ifthe income in year one is expected to be P 25,000, how much would the gradient have to be in each year through year 8 if the interest rate is 10% per year?An investment of $74,000 yields a net annual income of $22,000 for 6 years. What is the internal rate of return (IRR) for this investment? O a. 19.54% O b. 24.43% O c. 13.03% O d. 29.31% O e. 15.63%2. Consider an investment that makes 20% one year and loses 20% the next year. Compute the following returns for this investment: a. The arithmetic average yearly return 000.12 b. The geometric average yearly return (to two decimal places in percentage terms, e.g., 5.13%) c. The total compound return over the 2-year period