7 7. A small business purchased now for P50,000 will lose P9,600each year for the first 4 years. An additional investment of P30,000in the business will required at the end of the fourth year. After15 years the business can sold for P70,000. What should be theprofit each year from the fifth through the fifteeth year to obtain arate of return of 25%?Ans. P55,083103

Information Provided: Purchase price = 50,000 Amount lost each year for 4 years = 9600 Additional…

7. A small business purchased now for P50,000 will lose P9,600 each year for the first 4 years. An additional investment of P30,000 in the business will required at the end of the fourth year. 15 years the business can sold for P70,000. What should be the profit each year from the fifth through the fifteeth year to obtain a rate of return of 25%? Ans P55.083 103

7. A small business purchased now for P50,000 will lose P9,600 each year for the first 4 years. An additional investment of P30,000 in the business will required at the end of the fourth year. 15 years the business can sold for P70,000. What should be the profit each year from the fifth through the fifteeth year to obtain a rate of return of 25%? Ans P55.083 103

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

1. A small business purchased now for P 500,000.00 will lose P96,000.00 each year for the first four years. An additional investment P300,000.00 is required at the end of fourth year. After 15 years the business can be sold for P700,000.00 . What should be the profit each year from the 5th to 15th year to obtain a rate of return of 25%?
A small business purchased now for P50, 000 will lose P9, 600 each year for first 4 years. An additional investment of P30,000 in the business will required at the end of the fourth year. After 15 years the business can sold for P70, 000. What should be the profit each year from the fifth through the fifteenth year to obtain a rate return of 25%? Ans. P55.083
Determine the fair market value. Show your solutions. Investment in Sunrise Company is P100,000 at the end of 5 years plus P24,000 annually for 4 years afterwards. Investment in XYZ company offers P50,000 semi-annually P15,000 every 6 months after 6 years. Assume that the money is worth 9% compounded annualy, which investment is preferable?
If $8,000 is invested in a certain business at the start of the year, the investor will receive $2,400 at the end of each of the next four years. What is the present value of this business opportunity if the interest rate is 4% per year? OA. $1,138.8 OB. $355.88 OC. $711.75 OD. $854.1 C...
Decide on the following problems by determining the fair market value. Show your solutions in a sheet of paper together with your decision on the problem. 1. Investment in Sunrise Company is P 100,000 at the end of 5 years plus P 24,000 annually for 4 years afterwards. Investment in XYZ company offers P 50,000 semi-annually P 15,000 every 6 months after 6 years. Assume that the money is worth 9% compounded annually, which investment is preferable?
1. Investment in Sunrise Company is P 100,000 at the end of 5 years plus P 24,000 annually for 4 years afterwards. Investment in XYZ company offers P 50,000 semi-annually P 15,000 every 6 months after 6 years. Assume that the money is worth 9% compounded annually, which investment is preferable?
Bertholdt Corporation offers ?ℎ? 150,000 at the end of 3 years plus?ℎ? 300,000 at the end of 5 years. Reiner Group of Companies offers?ℎ? 25,000 at the end of each quarter for the next 5 years. Assume thatmoney is worth 8% compounded annually, which offer has a better marketvalue?
If $10,000 is invested in a certain business at the start of the year, the investor will receive $3,000 at the end of each of the next four years. What is the present value of this business opportunity if the interest rate is 4% per year? A. $1,068 B. $890 C. $445 D. $1424
Additional Activities Decide on the following problems by determining the fair market value. Show your solutions in a sheet of paper together with your decision on the problem. 1. Investment in Sunrise Company is P 100,000 at the end of 5 years plus P 24,000 annually for 4 years afterwards. Investment in XYZ company offers P 50,000 semi-annually P 15,000 every 6 months after 6 years. Assume that the money is worth 9% compounded annually, which investment is preferable? 2. A motorcycle is for sale P 60,500 cash or on installment terms P 3,000 per month for 2 years at 12% compounded annually. If you were the buyer, what would you prefer, cash or installment?
19. A business worth $440,000 is expected to grow at 10% per year compounded annually for the next 3 years. (a) Find the expected future value. (b) If funds from the sale of the business today would be placed in an account yielding 4% compounded semiannually, what would be the minimum acceptable price for the business at this time?
a) How much should you invest at 12% interest today if you want to receive TK. 10,000 at the cnd of 3rd year; TK. 20,000 at the end of Sth year; and TK. 25,000 at the end of 7th year if interest is compounded continuously? b) A company is thinking of acquiring fixed assets worth TK. 10 million on financial lease for five ycars at an interest rate of 12%. The lcase would be amortized over five years by equal annual installments. You are required to calculate annual installment and show how lease is amortized over five years if installment is paid at year cnd or at the beginning of the year.
1. If the interest rate is 8% per year, what decision would you make based on the decision tree diagram in Figure below. (0.6) Introduce New Product $200,000 profit per year for six years, starting at EOY 3 -$1,000,000 at ΕΟΥ 2 (0.4) $280,000 profit per year for six years, starting at ΕΟΥ Year 0 $0 profit/yr. for 8 years Do Nothing

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS