Homework Answers
Annual Receipt=D=$5
Market rate of interest=i=10%
Present value of receipts=PV1=D/i=5/10%=$50
Present value of costs=Initial Cost=PV2=-$100
Net present value=PV2+PV1=-100+50=-$50
We can see that NPV of investment is negative. It is not worth to make this investment.
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3. (1 pts) Suppose a mutual fund offers you an investment opportunity. For each $100 investment...
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Poforlio and fund management
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28 - 33
Questions 28-34 are based on the following information Personal finance. Suppose you are an engineer and your spouse is a sales person. Neither of you knows finance, economics or financial statement analysis. Both you and your spouse are salary carners. Both are paid each month 28. After allocating sufficient money to your monthly living expense, mortgage education, other necessary expenses and emergency fund, you would like to use the remaining salary to do which of the following...
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Poforlio and fund management
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28 - 33
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