Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
9th Edition
ISBN: 9781259277214
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Bradford D Jordan Professor
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4, Problem 14QP
Summary Introduction
To calculate: The rate of return.
Introduction:
Rate of return refers to the gain or loss on the investment. It also refers to the increase or decrease in the capital value of an investment.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In March 1963, Ironman was introduced in issue 39 of the comic book Tales of
Suspense.
The original price for that issue was
$0.11.
By March 2015 , 52 years later, the value of this comic book, given the condition it's in, had risen to $9,900.
What annual rate of interest would you have earned if you had bought the comic book in 1963 and sold it in
2015 ?
The annual rate of interest you would have earned if you had bought the comic book in 1963 and sold it in
2015 is enter your response here %.
(Round to two decimal places.)
(Solving for i) In March 1963, Ironman was introduced in issue 39 of the comic book Tales of Suspense. The
original price for that issue was $0.15. By March 2016, 53 years later, the value of this comic book, given the
condition it's in, had risen to $10,200. What annual rate of interest would you have earned if you had bought the
comic book in 1963 and sold it in 2016?
The annual rate of interest you would have earned if you had bought the comic book in 1963 and sold it in 2016 is
%. (Round to two decimal places.)
You bought an artwork 28 years ago, the current estimated price is $17,601, which reflects an annual
return of 8 percent. For this to be true, what was the original price of the artwork? Answer: $_ (Do not
round intermediate calculations and round your answer to 2 decimal places)
Chapter 4 Solutions
Essentials of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 4.1 - Prob. 4.1ACQCh. 4.1 - Prob. 4.1BCQCh. 4.1 - In general, what is the future value of 1 invested...Ch. 4.2 - What do we mean by the present value of an...Ch. 4.2 - Prob. 4.2BCQCh. 4.2 - Prob. 4.2CCQCh. 4.2 - Prob. 4.2DCQCh. 4.3 - What is the basic present value equation?Ch. 4.3 - Prob. 4.3BCQCh. 4 - If you invest 500 for one year at a rate of 8...
Ch. 4 - Prob. 4.2CCh. 4 - Suppose you invest 100 now and receive 259.37 in...Ch. 4 - Prob. 1CTCRCh. 4 - Prob. 2CTCRCh. 4 - Prob. 3CTCRCh. 4 - Prob. 4CTCRCh. 4 - Prob. 5CTCRCh. 4 - Prob. 6CTCRCh. 4 - Prob. 7CTCRCh. 4 - Prob. 8CTCRCh. 4 - Prob. 9CTCRCh. 4 - Prob. 10CTCRCh. 4 - Prob. 1QPCh. 4 - Prob. 2QPCh. 4 - Prob. 3QPCh. 4 - Prob. 4QPCh. 4 - Prob. 5QPCh. 4 - Calculating Rates of Return. Assume the total cost...Ch. 4 - Calculating the Number of Periods. At 4.7 percent...Ch. 4 - Calculating Rates of Return. In 2014, an 1874 20...Ch. 4 - Prob. 9QPCh. 4 - Prob. 10QPCh. 4 - Calculating Present Values. You have just received...Ch. 4 - Prob. 12QPCh. 4 - Prob. 13QPCh. 4 - Prob. 14QPCh. 4 - Calculating Rates of Return. Although appealing to...Ch. 4 - Prob. 16QPCh. 4 - Prob. 17QPCh. 4 - Calculating Future Values. You have just made your...Ch. 4 - Calculating Future Values. You are scheduled to...Ch. 4 - Calculating the Number of Periods. You expect to...Ch. 4 - Calculating Future Values. You have 6,150 to...Ch. 4 - Prob. 22QPCh. 4 - Calculating the Number of Periods. You can earn...Ch. 4 - LO2 24. Calculating Present Values. You need...Ch. 4 - Prob. 25QPCh. 4 - Calculating Future Values. You have 20,000 you...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- An art collector purchased a painting 30yrs ago for $587,000. Today this painting is estimated to be $11.74 million. Based on this estimate, what is the annual compound rate of appreciation for the painting since the art collector's initial purchase?arrow_forward1. Compute the requested value(s) for each scenario. Show all component numbers that factor into determination of the final answer(s) a. On January 1, 1963, a kid from Sioux Falls purchased a limited edition Superman comic at the original market price of 12 cents. On January 1, 1997 (34 years later), the comic was sold at auction for $2,500. What annual rate of return did this kid earn on the comic? Give typing answer with explanation and conclusionarrow_forwardA particular famous painting was purchased for $720,000 in the year 2021. The value has been increasing at the continuous rate of 10% per year. Write an equation for y, the value at time t, that represents the situation where t = 0 represents the year 2021. y = Incorrect dollars Find the value of the famous painting in the year 2028.arrow_forward
- In 1904, the first Green Jacket Golf Championship was held. The winner's prize money was $300. In 2015, the winner's check was $1,660,000. What was the annual percentage increase in the winner's check over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Annual percentage If the winner's prize increases at the same rate, what will it be in 2053? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Prize money $arrow_forwardIn 1895, the first Putting Green Championship was held. The winner’s prize money was $250. In 2010, the winner’s check was $1,450,000. What was the percentage increase per year in the winner’s check over this period? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Interest rate % If the winner’s prize increases at the same rate, what will it be in 2030? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))arrow_forwardIn 1895, the first Putting Green Championship was held. The winner's prize money was $150. In 2016, the winner's check was $1,410,000. a. What was the percentage increase per year in the winner's check over this period? b. If the winner's prize increases at the same rate, what will it be in 2048? (Do not (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Increase per year b. Winners prize in 2048 7.85%arrow_forward
- This problem is based on historical information that is at least partly true: In 1626 Dutch settlers purchased Manhattan Island from Native Americans for the equivalent of $24. It is estimated the land value of Manhattan Island was $1.4 trillion in 2018. Use the Compound Interest Formula to help answer the following questions. You may assume annual compounding. What is the average annual percentage rate of increase in the land value of Manhattan Island from 1626-2018? Using your answer to 1), what was the land value of Manhattan Island in 1950? Using your answer to 1), what will the land value of Manhattan Island be in 2050?arrow_forwardIn 1904, the first Putting Green Championship was held. The winner's prize money was $160. In 2016, the winner's check was $1,177,000. (Do not round intermediate calculations.) a. What was the percentage increase per year in the winner's check over this period? b. If the winner's prize increases at the same rate, what will it be in 2049?arrow_forwardа) Trump Art collection is one of the best in the world and most importantly has huge profits. In December 2020, Trump sold a rear brass sculpture – Island of La Trinity at an auction for a price of $20,500,200. He bought this artwork in December 2017 at a price of $24,750,500. What was his annual rate of return on this rear brass sculpture? Show all workings.arrow_forward
- In 1982, a set of rare baseball cards was sold for $7,125. In 2000, the set was sold for $350,000 to another collector. In 2021 the set was sold for $4.2 million. Assuming annual compounding, what rate did this investment return from 1982 to 2000, from 2000 to 2021, and from 1982 to 2021, respectively?arrow_forwardIn 1895, the first Putting Green Championship was held. The winner’s prize money was $180. In 2016, the winner’s check was $1,380,000. a. What was the percentage increase per year in the winner’s check over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. If the winner’s prize increases at the same rate, what will it be in 2037? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forwardIn 1904, the first Dalmore Championship was held. The winner's prize money was $100. In 2016, the winner's check was $1,171,000. (Do not round intermediate calculations.) a. What was the percentage increase per year in the winner's check over this period? Interest rate b. If the winner's prize increases at the same rate, what will it be in 2049? Future valuearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College