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Ten years ago a house was purchased for P5M. If it is sold today for P10M, what is the rate of appreciation of its value?
a. 8.01%
b. 71.773%
c. 7.177%
d. 9.773%
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- The stock market has an average annual return of 10% per year. We will consider the annual return to be an annual interest rate Now suppose the stock market for the next 10 years has a strong growth rate. If you invested your $1400 stimulus check in the stock market with 16% annual interest, compounded annually, how much money would you have after 10 years?A company invests $6,250 at the beginning ofa seven-year project. At the end of every year forthe first five years, the project generates $1,550. Atthe end of the sixth year, the project generates nomoney. At the end of the seventh year, the project isterminated. How much must the project generate atthe end of the seventh year to realize 14% return onthe initial investment?1.Investment Problem Cost of bldg.. =5M Gross Revenue = 9.5 M Operating expense = 4M Nominal interest rate = 12% Ongoing inflation rate = 8% a.)How much is the total profit? b.)Determine the expected rate of return (r) c.)Determine the real interest rate d.)Determine the interest cost e.)How much will be added to the firm’s profit?
- 4 QUESTION 9 A new production system for a factory is to be purchased and installed for $153,484. This system will save approximately 300,000 kWh of electric power each year for a 4year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 10% per year, and the salvage value of the system will be $8,496 at year 4 Calcutate the FW of the above investment and insert the result below.For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. An equipment has a first cost of $200,000, an annual operating cost of $50,000 and a salvage value of 25% of the first cost after 5 years; these estimates being in future dollars. Determine the present worth, assuming an interest rate of 10% and an average inflation rate of 4%.8. A businessman purchases a common stock worth P1,000 every year for a period of 10 years. At the of the 10th year just after his last purchase, he sold all his stock to a prospective buyer for P12,000. Find the rate of return he received on the investment. a. 3% b. 4% c. 5% d. 8%
- An IOU agreement was made between two persons. For a face value of P100,000, it was agreed that the borrowerwill make 8 annual payments at a 10.50% interest rate. The first payment will be due at the end of the year. It wasalso agreed that 90% of the face value will be paid for redemption. What is the bond value if it yields at a rate of12%? Please solve using economics fomula.What rent PSF would be needed to incentivize this development? Suppose new Class A Office developments cost $200 per square foot (psf), all in (i.e. land cost, construction, dev costs, reasonable dev profits) If the new building can be sold for $200 psf, development is feasible. Suppose investors are willing to pay $12.50 per dollar of (net operating) income on the buildingMr. Rahim is planning to pursue MBA studies. Initial inquiry shows that he will have to pay RM 20,000 as tuition fee, buy books for RM 2,000, and pay for transport RM 500. The MBA study programme will extend over 18 months. Mr Rahim is working now with a salary of RM 2,500 per month. Being a full time student, he will have to forego the income from his present job for the period of study. Work out the (a) Financial cost, and (b) the Economic Cost of doing MBA (Hint: Identify implicit costs and explicit costs Solve economic question
- The U.S. stock market has returned an average of about 9% per year since 1900. This return works out to a real return (i.e., adjusted for inflation) of approximately 6% per year. Solve, a. If you invest $100,000 and you earn 6% a year on it, how much real purchasing power will you have in 30 years? b. If you invest $5,000 per year for 20 years, how much real purchasing power will you have at the end of 30 years? The interest rate is 6% per year.A five-year project has an initial fixed asset investment of $613,600, an initial net working capital investment of $22,200. The project will have an annual operating cash flow (OCF) of (-$76,540). The fixed asset is fully depreciated over the life of the project and has no salvage value. The net working capital will be recovered when the project ends. The required return is 11.7 percent. What is the project's equivalent annual cost, or EAC? O-$248,052.76 O-$182,309.18 O-$147,884.01 O $242,212.22Anna has an income of $1000 this year, and she expects an income of $2500next year. She can borrow and lend money at an interest rate of 10%.Consumption goods cost $1 per unit this year and there is no inflation. What is the net present value of Anna’s endowment?