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mixer [17]
3 years ago
10

An investment project provides cash inflows of $615 per year for eight years. a. What is the project payback period if the initi

al cost is $1,750
Business
1 answer:
aksik [14]3 years ago
8 0

Answer:

It will take 3 years and 66 days to pay for the initial investment.

Explanation:

Giving the following information:

Cash flows= $615 for 8 years

Initial investment= $1,750

<u>The payback period is the time required to cover for the initial investment.</u>

<u></u>

Year 1= 615 - 1,750= -1,135

Year 2= 615 - 1,135= -520

Year 3= 615 - 520= 95

Exactly:

(95/520)= 0.18*365= 66

It will take 3 years and 66 days to pay for the initial investment.

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A seller has accepted an offer from John. John wants to remodel and add an outdoor pool when he has enough equity built up to co
nika2105 [10]

Answer:

make a 40% down payment upfront

Explanation:

The best arrangement that would help him accomplish this would be to make a 40% down payment upfront. The best way to build equity as fast as possible is to put down the biggest down payment that you can. The bigger the down payment, the higher the boost in equity that you will receive. That is why it is the best option. Anything above 20% down payment is the ideal scenario, while 40% would be perfection.

4 0
2 years ago
Suppose the real risk-free rate is 3.50%,the average future inflation rate is 2.50%, a maturity premium of 0.20% per year to mat
drek231 [11]

Answer:

the 5 year A-rated corporate bond yields 0.3% more than the 10-year Treasury bond

Explanation:

the yield of a 10 year treasury bond = real risk free rate + average future inflation rate + (maturity premium x number of years) = 3.5% + 2.5% + (20% x 10 years) = 8%

the yield of a 5 year A-rated corporate bond = real risk free rate + average future inflation rate + liquidity premium + default risk premium + (maturity premium x number of years) = 3.5% + 2.5% + 0.5% + 0.8% + (20% x 5 years) = 8.3%

difference in yields = 8.3% - 8% = 0.3%

7 0
3 years ago
Dudley Savings Bank wishes to take a position in Treasury bond futures contracts, which currently have a quote of 110 − 100. Dud
djverab [1.8K]

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

6 0
3 years ago
You purchased 100 shares of ABC common stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance ma
Zina [86]

A margin call would be issued if the stock price fell below $42.86.

Given initial margin 50% and maintenance margin 30%.

To find the stock price level to get a margin call.

When the value of assets in a brokerage account falls below a specific amount, known as the maintenance margin, the account holder is required to deposit extra cash or securities to fulfil the margin obligations. A margin call is a demand from a brokerage firm to boost the account's equity.

The formula to compute the margin call price is given below:

Margin call = \frac{1-Initial Margin}{1-Manitenance margin} * Purchase price

= \frac{1-0.50}{1-0.30} *60\\

=\frac{0.50}{0.70} *60\\=42.86

Therefore, the answer is $42.86.

To know more about margin call click here:

brainly.com/question/14640214

#SPJ4

6 0
2 years ago
Arizona Desert Homes (ADH) constructed a new subdivision during 2017 and 2018 under contract with Cactus Development Co. Relevan
Katarina [22]

Answer:

Contract amount = liablity :unearned revenue = $3405000

contract cost are setoff against contract billings and determine difference to be asset or liability

contract billings = ( $1702500-$1290000) = 412500 = liability

Explanation:

4 0
3 years ago
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