QUESTION 10Beatrice owns two investments, A and B, that have a combined total value of $28,100.00. Investment A is expected to pay $25,180.00 in 4 years from today andhas an expected return of 12.77 percent per year. Investment B is expected to pay $21,594.06 in 5 years from today and has an expected return of R per year.What is R, the expected annual return for investment B?O 11.50% (plus or minus 10bps)O 14.58% (plus or minus 10bps)O 10.73% (plus or minus 10bps)O 9.50% (plus or minus 10bps)O none of the answers are within 10bps of the correct answer

Future value is the amount that existing assets are worth at a specific future date after they have…

Answered: QUESTION 10 Beatrice owns two…

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter10: Valuing Early-stage Ventures

Section: Chapter Questions

Problem 1EP

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QUESTION 5 You own two investments, A and B, that have a combined total value of $17,400.00. Investment A is expected to make its next payment in 1 month. A's next payment is expected to be $93.00 and subsequent payments are expected to grow by 0.56 percent per month forever. The expected return for investment A is 0.90 percent per month. Investment B is expected to pay $142.00 each quarter forever and the next payment is expected in 3 months. What is the quarterly expected return for investment B? O-1.43% (plus or minus 2 bps) O 0.82% (plus or minus 2 bps) O 0.53% (plus or minus 2 bps) O 0.34% (plus or minus 2 bps) O none of the answers are within 2 bps of the correct answer
Question 14 The Milken Company is offering you an investment that promises you $10,000 at the end of 8 years if you invest $ 7,521 today. What is the annual return on this investment? Compute your answer as a percent rounded to 2 decimal places. Record without a percent sign. For example, record .0848765 = 8.48765% as 8.49. Your Answer:
Chapter 10 Discussion Q1 A property is sold for $200,000. Typical financing terms are an 85 percent loan with a 10 percent interest rate over 15 years. If the gross income per year is $30,000, what is the overall capitalization rate?
QUESTION 7 If you have $100K, and want to invest in assets A, B and C. Asset A has historical AVG return of 15%, asset B 20%, and asset C 10%, in what proportions of $100K would you allocate into assets A, B and C? i.e. Which scenario is most rational? A > B > C A > C > B B > A > C C >A > B
QUESTION 15 An investment pays $X in one year, $300 in two years, and $500 in three years. The total present value of all the cash flows (including X) is equal to $1.400. If the discount rate is 6 percent, what is X? O 750.99 O 779.71 O 708.48 O 713.19 O 755.98
QUESTION 19 You buy the property at the price of $7,000,000, and it is expected to generate $468015 net operating income in the following year. What is your 'going in' Cap Rate at purchase? Write your answer in percent, but do not include the % sign (e.g. if you get 5.63898%, write 5.64).
Question 16 You currently have $26,000 available for investment for a 20-year period. At what interest rate APR compounded monthly must you nvest this amount in order for it to be worth $100,000 at maturity? a) 0.56% b) 5.67% c) 6.75% d) 10.12% Answer. Question 17 You are consSidering investing in a startup project at a cost of S400,000. You expect the project to return S1,000,000 to you in 10 years. Given the risk of this project, your cost of capital is 14,5%. The NPV for this project is closest to: a) S88,681 b) S99,800 c) S109,388 d) S141,807
A Question 1 Suppose you are offered an investment that will allow you to triple your money in 8 years. What is the implied rate of interest? Retake question O 14.72 percent O 9.26 percent Not enough information 11.61 percent 8.50 percent
What is the rate of return (the interest rate) on an investment today of $30,626.24 if the company expects to receive $45,000 in 5 years? а. 9% O b. 8% С. 6% d. 7%
Jullo Company is considering the purchase of a new bubble packaging machine. If the machine will provide $20,000 annual savings for 10 years and can be sold for $50,000 at the end of the period, what is the present value of the machine investment at a 9% interest rate with savings realized at year end?
QUESTION 42 Compute the missing variable for each of the following alternatives of investments to accumulate $1,000,000. for 30 years @ 6% annual interest rate: Following are appropriate factors from tables: Table % / n Present Value of annuity due $1 Present Value of ordinary annuity of $1 Present value of $1 Future Value of ordinary annuity of $1 6%/30 12.15812 13.76483 .17411 79.05819 $????????? invested annually at the end of the year. Required Computations: $12,648.91 $72,648.92 $33,3333.33 $11,927.43
Question 1- A $12,000 investment will return annual benefit for six yearswith no salvage value at the end of six years. Assumestraight line depreciation and a 46% tax rate and the inflationrate is 5%. What is the inflation free after tax rate ofreturn on the investment if the annual benefits are $2,918 intoday’s dollars? a. 10.18% b. 4.94% c. 5% d. 8.20%

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