Question

Suppose that you are planning to take a year vacation to bike across the United States...

Suppose that you are planning to take a year vacation to bike across the United States someone is willing to sell you a new bicycle for $500 at the end of the year you expect to resell the bicycle for $ 350 .the benefit to you of using the bicycle is the equivalent of $170.( A) what is the internal rate of return (b) if the discount rate is 5 percent ,should you buy the bicycle
0 0
Add a comment Improve this question Transcribed image text
Request Professional Answer

Request Answer!

We need at least 10 more requests to produce the answer.

0 / 10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)


All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
Suppose that you are planning to take a year vacation to bike across the United States...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Similar Homework Help Questions
  • 5) United States reserves of Gold are about 8000 metric tons. The United States currently consumes about 170 metric tons per year If the consumption were to increase exponentially at a constant r...

    5) United States reserves of Gold are about 8000 metric tons. The United States currently consumes about 170 metric tons per year If the consumption were to increase exponentially at a constant rate of 1.5 percent per year, how long would it take to use up current Gold reserves? Suppose the total resource is four times current reserves (32000 metric tons) and the use rate continues to grow at 1.5 percent, how long would it take to use up the...

  • Two countries, Great Britain and the United States, produce just one good: beef. Suppose the price...

    Two countries, Great Britain and the United States, produce just one good: beef. Suppose the price of beef in the United States is $2.80 per pound and in Britain it is £3.70 per pound. According to PPP theory, what should the dollar/pound spot exchange rate be? Suppose the price of beef is expected to rise to $3.10 in the United States and to £4.65 in Britain. What should the one-year forward dollar/pound exchange rate be? Given your answers to parts...

  • 11. The interest rate on one-year risk-free bonds is 4.25 percent in the United States and...

    11. The interest rate on one-year risk-free bonds is 4.25 percent in the United States and 3.75 percent in Switzerland. The current exchange rate is $0.65 per Swiss frand. Suppose that you are a U.S, investor and you expect the Swiss franc to appreciate 2.75 percent over the next year. a. Calculate the foreign currency risk premium. b. Calculate the domestic currency return on the foreign bond, assuming that your cur- rency appreciation expectations are met

  • On a bike trail, you come across a 19 year female sitting next to her tipped...

    On a bike trail, you come across a 19 year female sitting next to her tipped over bicycle. She says, “My left arm and leg hurt like crazy.” You check her and find that she is unable to move her leg, which is beginning to swell; you feel a raised bump area below her knee. Her left arm looks deformed at the shoulder and is beginning to look bruised. The woman also has a scrape on her right hand and...

  • Ten years from now, you plan on taking a year's unpaid biking across the US from d vacation an Phifadefphra to San Diego

    Ten years from now, you plan on taking a year's unpaid biking across the US from d vacation an Phifadefphra to San Diego. You estimate that expenses, e.g. hotels, bike repairs, food, tolls, etc, Will be $5,000 per month over the 12-month journey. The interest rate is 8.4%, compounded monthly. Hint: draw a timeline! a) what is the appropriate annuity discount factor in this problem during the 12-month journey? b) How much money will you need in the bank at the start...

  • You observe that the inflation rate in the United States is 1.9 percent per year and...

    You observe that the inflation rate in the United States is 1.9 percent per year and that T-bills currently yield 2.4 percent annually. Use the approximate international Fisher effect to answer the following questions. a. What do you estimate the inflation rate to be in Australia, if short-term Australian government securities yield 4 percent per year? (Enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b. What do you estimate the inflation rate to be in...

  • You observe that the inflation rate in the United States is 3.3 percent per year and...

    You observe that the inflation rate in the United States is 3.3 percent per year and that T-bills currently yield 3.8 percent annually.    Required: (a) What do you estimate the inflation rate to be in Australia, if short-term Australian government securities yield 5.5 percent per year? (Click to select)  4.8%  5%  5.2%  -1.6%  1.61%    (b) What do you estimate the inflation rate to be in Canada, if short-term Canadian government securities yield 7.5 percent per year? (Click to select)  6.72%  0.4%  7.28%  7%  -0.4%    (c) What do...

  • You observe that the inflation rate in the United States is 2.0 percent per year and...

    You observe that the inflation rate in the United States is 2.0 percent per year and that T-bills currently yield 2.5 percent annually.    a. What do you estimate the inflation rate to be in Australia, if short-term Australian government securities yield 5 percent per year? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.)      Inflation rate %    b. What do you estimate the inflation rate to be...

  • You observe that the inflation rate in the United States is 1.6 percent per year and...

    You observe that the inflation rate in the United States is 1.6 percent per year and that T-bills currently yield 2.1 percent annually.    a. What do you estimate the inflation rate to be in Australia, if short-term Australian government securities yield 5 percent per year? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.)      Inflation rate %    b. What do you estimate the inflation rate to be...

  • Consider two bonds, one issued in euros () in Germany, and one issued in dollars (S) in the United States. Assume that both government securities are one-year bonds-paying the face value of the bond...

    Consider two bonds, one issued in euros () in Germany, and one issued in dollars (S) in the United States. Assume that both government securities are one-year bonds-paying the face value of the bond one year from now The face values and prices on the two bonds are given by Face Value $10,000 10,000 Price $9,615.38 €3,345 79 United States Germany Compute the nominal interest rate on each of the bonds. bond-||% Nominal interest rate on the US (Enter your...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT