Economics question, show steps and be clear solve in 30 minutes for thumbs up rating

Question

Question

Economics question, show steps and be clear solve in 30 minutes for thumbs up rating

Economics question, show steps and be clear

solve in 30 minutes for thumbs up rating

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

ANSWER:

Nominal rate = real rate + inflation

nominal rate 1st 5 years = 10% + 1.5% = 11.5%

nominal rate next 3 years = 10% + 5% = 15%

nominal rate following 5 years = 10% + 3.5% = 13.5%

fv = $30,000

pv 5 years before the fv = fv(p/f,i,n) = 30,000(p/f,13.5%,5) = 30,000 * 0.5309 = 15,927.29

pv 3 years before 5 years = pv 5 years before the fv(p/f,i,n) = 15,927.29(p/f,15%,3) = 15,927.29 * 0.6575 = 10,472.45

pv at the start = pv 3 years before 5 years(p/f,i,n) = 10,472.45(p/f,11.5%,5) = 10,472.45 * 0.5802 = $6,076.79

so one should invest $6,076.79 to a 10% real rate of return.

Add a comment

Answer 2

Similar Homework Help Questions

Economics question, show steps and be clear solve in 30 minutes for thumbs up rating Assume...

Economics question, show steps and be clear solve in 30 minutes for thumbs up rating Assume drilling a well costs $500,000. There are three probable outcomes: a) 60% probability that the drilled well is a dry hole b) 40% probability that the drilled well is a producer well with such rate that can be sold immediately at $2,500,000 c) the drilled well is a producer well with such rate that can be sold immediately at 2,500,000 Calculate the project's expected...
Economics question, show steps and be clear solve in 30 minutes for thumbs up rating The...

Economics question, show steps and be clear solve in 30 minutes for thumbs up rating The University has just invested $ 7,945 in a new desktop publishing system. From past experience, annual cash returns are estimated as A(t) = $8000 - $4000(1+0.15)-1 s(t) = $6000(1 -0.7 ) where A(t) stands for the net cash flow in period t and S(t) stands for the salvage value at the end of year t, and t > 1 If the MARR is 12%,...
Economics question, show steps and be clear solve in 30 minutes for thumbs up rating A...

Economics question, show steps and be clear solve in 30 minutes for thumbs up rating A new oil pump costs $8,500 and has no salvage value once installed. The manufacturer's warranty will pay the 1st year maintenance and repair costs. In the 2nd year, costs will be $900, and they will increase on a $900 arithmetic gradient in subsequent years. Also operating expenses for the pump will be $500 the first year and will increase on a $200 arithmetic gradient...

economics q. solve in 30 mins for thumbs up rating. be clear and show steps. A...

economics q. solve in 30 mins for thumbs up rating. be clear and show steps. A vehicle costs $18,000 when new and has a trade-in value of $7,800 at the end of four years. Its operating expense is $3,150 per year with an additional $1,000 for tires, tune up and battery at the end of the second year. All values are given in today's dollars. What is the equivalent annual cost of owning this vehicle for four years assuming a...
Economics question, solve in 30 minutes for thumbs up rating One of the following i not...

Economics question, solve in 30 minutes for thumbs up rating One of the following i not a remedy for market failures. Which one? Litigation Government provision of a public service O Regulation by the government Monetary policy Taxation of negative externalities
heat transfer question, show equations, assumptions, calculations and steps clearly. will give thumbs up rating if...

heat transfer question, show equations, assumptions, calculations and steps clearly. will give thumbs up rating if solved correctly in 10 minutes choose the correct option for green rating Place the following materials in order of thermal conductivity, from highest (1) to lowest (6). water steel air plastic helium aluminium answer correctly in 10 minutes for guaranteed thumbs up

heat transfer question, show equations, assumptions, calculations and steps clearly. will give thumbs up rating if...

heat transfer question, show equations, assumptions, calculations and steps clearly. will give thumbs up rating if solved correctly in 50 minutes choose the correct option for green rating Which of the following plots illustrates the change in pipe surface temperature as a function of pipe length x for a pipe subjected to a uniform positive heat flux? A)TS B)TS X X C) T1 D)T, 1 х х E) Tsh F) T. Х Х
heat transfer question, show equations, assumptions, calculations and steps clearly. will give thumbs up rating if...

heat transfer question, show equations, assumptions, calculations and steps clearly. will give thumbs up rating if solved correctly in 10 minutes choose the correct option for green rating Consider the following statements about fin effectiveness. Which are true? Select all that apply. Fin effectiveness increases with increasing convection coefficient. Fin effectiveness compares the heat transfer rate through the fin to that of the bare surface without the fin. Fin effectiveness is given as Rconv/Rfin Fin effectiveness tells you if a...
java question have a clear and detailed explanation for a thumbs-up rating what is default constructor?

java question have a clear and detailed explanation for a thumbs-up rating what is default constructor?

Please answer the following and add all details/steps! Will give a thumbs up rating to correct...

Please answer the following and add all details/steps! Will give a thumbs up rating to correct answer! Solve the following recurrences using the master method, or the substitution method. (a) T(n) = T(n/2) + O(n), with T(1) = 1 (b) T(n) = 3T(n/2) + 0(1), with T(1) = 1 (c) T(n) = T(4n/5) + O(1), with T(1) = 1.

Economics question, show steps and be clear solve in 30 minutes for thumbs up rating

Homework Answers

Add Answer to:
Economics question, show steps and be clear solve in 30 minutes for thumbs up rating

Post as a guest

Earn Coins