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year from now $150.000 12. A compy is considering an opportunity that requires an investment of $1.500.000 today and will pro
3. There are altogether 20 questions each with 5 points. D Question 18 5 pts 18. You are looking for a new truck and see the
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Answer #1
Year Cashflow PVF @ 15% PV
0 -1,500,000.00       1.0000 -1,500,000.00
1        350,000.00       0.8696        304,347.83
2        450,000.00       0.7561        340,264.65
3        630,000.00       0.6575        414,235.23
NPV      -441,152.30

Therefore option D is correct.

Question 18:

Monthly payment to buy the truck = $878

No of monthly payments to be made (N) = 60

Payment to be made if Truck if bought from dealer, that is present value of truck (PV) = (-$35,620)

Therefore monthly interest rate of monthly payment scheme = ?

Using financial calculator or RATE function in excel,

Monthly interest rate of monthly payment scheme = 1.385% p.m equivalent to 16.6% p.a.

Therefore option D is correct.

Thumbs up please if satisfied. Thanks :)

Comment if further doubts in aboe

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