Answer:
If you are keeping aside a large amount of money to purchase a house over a period of five years
Explanation:
Savings BOND would be the best investment to earn interest in a situation where a person or an individual decide to keep aside a large
amount of money or huge sum of money to purchase a house over a period of five years in order to earn interest which mean that the maturing date for keeping the money will be in the next five years in which the person who issued out the bond which is known as the issuer will have to pay back the investor the interest amount generated for saving the large amount of money.
Answer: A. the summed value of each possible rate of return weighted by its probability
Explanation:
The Expected Return of a project is indeed the summed value of each possible rate of return weighted by its probability.
When going into a project, a financial analyst has to account for the possible outcomes that could happen such as interest rates rising or falling.
They then take the various likelihoods and assign rates of returns to them that are either known or anticipated. They will then give each likelihood a probability of it occuring and then give a Weighted Average of these probabilities along with the rates of returns for those likelihoods.
The summed figured that they get is what is known as the Expected return and it includes the various likelihoods that could happen to the project.
Answer: 25%
Explanation:
The annual rate of return is calculated by simply dividing the Annual income by the average investment.
Annual Income
Annual revenues of $133,500
Annual expenses of $76,000
Annual Income = Revenues - Expenses
Annual Income = $57,500
Average Investment
Calculated by dividing the Addition of the beginning and ending (salvage value) Investment figure by 2.
= (449,000+11,000)/2
= $230,000
Annual Rate of return is therefore,
= 57,500/230,000
= 0.25
= 25%
Answer:
The NPV of the machine is closest to -$34.48
Explanation:
The net present value (NPV) of the project is the present value of the future net cash flows expected from the project less the initial cost of the project. The cash inflows from this project are the cost savings that are in a form of annuity and an amount for salvage value receivable at end of year 6. Thus, the NPV of the project is,
NPV = 4000 * [ (1 - (1+0.12)^-6) / 0.12 ] + 3000 / (1+0.12)^6 - 18000
NPV = - $34.48
Answer: A
Explanation:
The one that is clearly out of place would be A
