1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Ratling [72]
3 years ago
7

As a financial advisor, what will you tell your client, Ryan, he should be willing to pay for an investment property that he pla

ns to buy today and hold for 5 years and then sell, given the following cash flows and the fact that he expects 9% on any investment he makes?
Inflows Outflows Net
InitialOutlay $0
Year 1 $45,000 $55,000 10,000
Year 2 55,000 20,000 35,000
Year 3 55,000 20,000 35,000
Year 4 255,000 235,00 220,000
A. $189, 910.29.
B. $194, 589.33.
C. $178, 656, 73.
D. $191, 231, 57.
Business
1 answer:
kvv77 [185]3 years ago
5 0

Answer:

The option (A) $189, 910.29 is correct

Explanation:

Solution

Given that

Years Net Cash flow Discount Factor at 11% Present Value

1        $ (10,000.00)               0.901                         $(9,009.01)

2        $ 35,000.00               0.812                         $ 28,406.79

3        $ 35,000.00               0.731                         $ 25,591.70

4        $ 220,000.00               0.65                        $ 144,920.81

Now,

The Net Present Value                                           $189,910.29

Thus

After carrying out the  financial analysis, it has been seen that if we go ahead to buy the Investment Property, then today we have Net present Value of $ 189,910.29.

So, i will inform my client to buy the Investment Property.

You might be interested in
What is the benefit of purchasing a generalized insurance policy?
Alika [10]
<span>The benefit of purchasing a generalized insurance policy is that </span><span>rules out buying extra policies in the future. This will help the consumer to have a peace of mind because the consumer will be assured that they will get something out of this in the future.</span>
4 0
3 years ago
Read 2 more answers
Question 6 of 10
kirza4 [7]

Answer:

the answer on mine was D

Explanation:

3 0
2 years ago
Read 2 more answers
The government decides to increase its spending by $6 billion. Over time the real GDP increased by $9 billion. The expenditure m
Gekata [30.6K]

Answer:

c. Equals to 1.5

Explanation:

Options are <em>"a. -lower than  b. -higher than  c. -equal to "</em>

Expenditure multiplier = Change in real GDP / Change in spending

Expenditure multiplier = 9/6

Expenditure multiplier = 1.5

Thus, the expenditure multiplier is equal to 1.5

7 0
3 years ago
When teaching new vocabulary, how many times should you encourage the student to repeat the word back to you?
hram777 [196]
Answer:  Repeat little and often. It's alarming how quickly students can forget vocabulary. Encouraging students to focus on new vocabulary daily is the best way to make it stick. It doesn't have to involve sitting down for hours; little and often will help get vocabulary into students long term memory.
3 0
3 years ago
If there are no excess reserves in the banking system and the Fed lowers the required reserve ratio, it follows that banks will
blagie [28]

Answer:

Excess reserves

Explanation:

Money supply in the economy is regulated by the central bank of Federal Reserve through various methods.

One of them is the use of reserve ratio.

Reserve ratio is the percentage of total deposit in a bank that commercial banks are required to keep aside and not use.

If there is no excess reserves and the Fed lowers required reserve ratio, it means banks will now have more money they can use to service customers.

The excess excess of the reserve can now the used to give out loans

3 0
2 years ago
Other questions:
  • Action Travel has 10 employees each working 40 hours per week and earning $20 an hour. Federal income taxes are withheld at 15%
    7·1 answer
  • Your Competitive Intelligence team is predicting that the Digby Company will invest in adding capacity to their Dug product this
    6·1 answer
  • 1. In the POW camps of WWII, what did prisoners do with the contents of their Red Cross packages
    5·1 answer
  • The minimum return that must be earned on a project in order to leave the firm's value unchanged is ________.
    14·1 answer
  • According to Malthus, a fixed quantity of land and a growing human population will eventually produce: a stationary state in whi
    7·2 answers
  • An investment with more liquidity would be ideal for someone who
    15·2 answers
  • Factors involved in importing​
    8·1 answer
  • Atlas industries combines the smaller investment proposals from each operational unit into a single project for planning purpose
    8·1 answer
  • Mike has a car accident and Maria saves his life. To show his appreciation, Mike gives Maria a life estate in one of the homes h
    14·1 answer
  • Type the correct answer In the box. Spell all words correctly.
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!