Homework Answers
6% interest means the additional amount that you would have received over and above the principal amount that you would have received after the end of period. It means, along with principal you also receive interest component which is 6% of principal.
This can become opportunity cost because if you do not invest in this saving account. You will not receive any extra amount at end of period if amount is not invested anywhere. So it is a lost opportunity. Hence it is called opportunity cost.
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answer the following question using engineering economy
Rate of Return Analysis - One Project! Rate of...
You have accumulated $4,100 and are looking for the best rate of return that can be...
You have accumulated $4,100 and are looking for the best rate of return that can be earned over the next year. A bank savings account will pay 6%. A one-year bank certificate of deposit will pay 8%, but the minimum investment is $7,100. a. Calculate the amount of return you would earn if the $4,100 were invested for one year at 6%. b. Calculate the net amount of return you would earn if $3,000 were borrowed at a cost of...
If I could get some help with this question in excel that would be awesome 4....
If I could get some help with this question in excel that would
be awesome
4. Optimizing Cash Flows (20 points) It is now January 1 of 2021 and the following five projects (see below) are competing for a company's investment dollars Cash Flow Per Dollar Invested Proiect beg of year 2021 2022 2023 2024 upper limit 1.00 +0.30 +1.00 1.00 +1.10 1.00 1.00 +0.30 +1.00 $500,000 1.00 +1.40 $750,000 +1.75 None $500,000 None The cash received from any of...
The following graph shows the money market in a hypothetical economy. The central bank in this...
The following graph shows the money market in a hypothetical economy. The central bank in this economy is called the Fed. ASsume that the Fed fixes the quantity of money supplied. Suppose the price level increases from 90 to 105. Shift the appropriate curve on the graph to show the impact of an increase in the overall price level on the market for money. After the increase in the price level, the quantity of money demanded at the initial interest rate of 9%...
Problem 12-17 Net Present Value Analysis; Internal Rate of Return; Simple Rate of Return (L012-2, LO12...
Problem 12-17 Net Present Value Analysis; Internal Rate of Return; Simple Rate of Return (L012-2, LO12 3, L012-6) Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 23% each of the last three years. Casey is considering a capital budgeting project that would require a $5,620,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company's...
QUESTION 15 Table: Investment Projects Project Rate of return Cost A 16 % $1,000 13 $2,000...
QUESTION 15 Table: Investment Projects Project Rate of return Cost A 16 % $1,000 13 $2,000 C $500 D 5 $500 2 $10,000 Suppose the table shows all of the potential investment projects currently available in an economy. If the market interest rate were equal to 6%, the amount of investment spending would equal $ (Do not use a dollar sign)
please answer the following question 6) Suppose an economy is in its long-run equilibrium and the...
please answer the following question
6) Suppose an economy is in its long-run equilibrium and the real money demand function for the economy is (MiP)-0.2Y. Now suppose suddenly money demand becomes (MiP)-0.4Y Draw a graph and show the initial long-run equilibrium and then show the short-run equilibrium that would results from this change in money demand [Hint: You are drawing the graph from Chapter 10 but think about how this money demand change affects velocity from Chapter 5.] a) b)...
14) In a before-tax analysis of a project, which of the following would not affect NPV?...
14) In a before-tax analysis of a project, which of the following would not affect NPV? an increase a change in the estimated scrap value of an asset used solely in the project a change in the expected life of the project a change in the discount rate for the project money already spent on designs for the project in the working capital requirements for the project. a. b. c. d. e. 15) Which of the following ratios gives the...
1. Which of the following will lead to a lower interest rate on a loan? A)...
1. Which of the following will lead to a lower interest rate on a loan? A) lower inflation B) higher opportunity cost C) increased perceived risk of default D) reduced likelihood of borrower paying the loan 2. If you deposit $10,000 in a savings account at an annual interest rate of 7%, how much will you have in the account at the end of three years? A) $8,396 B) $11,800 C) $11,910 D) $12,250.43 3. At an interest rate of...
I need help with answer number 6. The question is answered but I need to show...
I need help with answer number 6. The question is answered but I
need to show the formula and I can't seem to get it correct.
Could you please help?
Question 4 41% 41% 4 points Off-The-Books Investment Firm, LLC, has offered you an investment it says will return to you $20,000 in 2 years. To get in, you'll need to make a $10,000 deposit to their receivables account and promise not to tell anyone about it. What is the...
Suppose you put $100 in the bank on January 1, 2017. If the annual nominal interest rate is 5 per...
Suppose you put $100 in the bank on January 1, 2017. If the annual nominal interest rate is 5 percent and the inflation rate is 5 percent, you will be able to buy ________ worth of inflation-adjusted goods on January 1, 2018. a. $110 b. $95 c. $100 d. $105 e. $90 Practically, in the long run the real interest rate is equal to: a. a savings account. b. the marginal product of capital. c. the rate of return to...
If I could get some help with this question in excel that would
be awesome
4. Optimizing Cash Flows (20 points) It is now January 1 of 2021 and the following five projects (see below) are competing for a company's investment dollars Cash Flow Per Dollar Invested Proiect beg of year 2021 2022 2023 2024 upper limit 1.00 +0.30 +1.00 1.00 +1.10 1.00 1.00 +0.30 +1.00 $500,000 1.00 +1.40 $750,000 +1.75 None $500,000 None The cash received from any of...
Problem 12-17 Net Present Value Analysis; Internal Rate of Return; Simple Rate of Return (L012-2, LO12 3, L012-6) Casey Nelson is a divisional manager for Pigeon Company. His annual pay raises are largely determined by his division's return on investment (ROI), which has been above 23% each of the last three years. Casey is considering a capital budgeting project that would require a $5,620,000 investment in equipment with a useful life of five years and no salvage value. Pigeon Company's...
QUESTION 15 Table: Investment Projects Project Rate of return Cost A 16 % $1,000 13 $2,000 C $500 D 5 $500 2 $10,000 Suppose the table shows all of the potential investment projects currently available in an economy. If the market interest rate were equal to 6%, the amount of investment spending would equal $ (Do not use a dollar sign)
please answer the following question
6) Suppose an economy is in its long-run equilibrium and the real money demand function for the economy is (MiP)-0.2Y. Now suppose suddenly money demand becomes (MiP)-0.4Y Draw a graph and show the initial long-run equilibrium and then show the short-run equilibrium that would results from this change in money demand [Hint: You are drawing the graph from Chapter 10 but think about how this money demand change affects velocity from Chapter 5.] a) b)...
14) In a before-tax analysis of a project, which of the following would not affect NPV? an increase a change in the estimated scrap value of an asset used solely in the project a change in the expected life of the project a change in the discount rate for the project money already spent on designs for the project in the working capital requirements for the project. a. b. c. d. e. 15) Which of the following ratios gives the...
1. Which of the following will lead to a lower interest rate on a loan? A) lower inflation B) higher opportunity cost C) increased perceived risk of default D) reduced likelihood of borrower paying the loan 2. If you deposit $10,000 in a savings account at an annual interest rate of 7%, how much will you have in the account at the end of three years? A) $8,396 B) $11,800 C) $11,910 D) $12,250.43 3. At an interest rate of...
I need help with answer number 6. The question is answered but I
need to show the formula and I can't seem to get it correct.
Could you please help?
Question 4 41% 41% 4 points Off-The-Books Investment Firm, LLC, has offered you an investment it says will return to you $20,000 in 2 years. To get in, you'll need to make a $10,000 deposit to their receivables account and promise not to tell anyone about it. What is the...
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