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
kupik [55]
3 years ago
12

You invest all the money you earned during your summer sales job (a total of $45,000) into the stock of a company that produces

fat and carb-free Cheetos. The company stock is expected to earn a 14% annual return; however, 5 years later it is only worth $20,000. Turns out there wasn't as much demand for fat and carb-free Cheetos as you had hoped. What is the annual rate of return on your investment?
Business
1 answer:
erica [24]3 years ago
8 0

Answer:

The annual rate of return of the invesment will be -14,97%

Explanation:

The initial investment is 45.000 and after 5 years the value of the investment is only 20.000. Here we can see a destruction of value (20.000 < 45.000). In finance, the time takes an essential part in calculation, so through the interest rate we calculated how bad was the investment in annual terms. The formula is as follows: Final investment value=(Initial investment*(1+interest rate)^(total years)) in our case would be: 20.000=(45.000*(1+interest rate)^(5)) From this formula we got -14,97%

You might be interested in
BoundStar and ClipKlik are two of the biggest companies in the smartphone industry. When BoundStar launched a new ultra-slim sma
LekaFEV [45]

Answer:

The corret answer is :  A) a response strategy

Explanation:

It refers to a type of marketing strategy that takes immediate action and opts into the advertiser's offer. It also compels a high-quality prospect to do it.  This one targets a niche audience and uses compelling messaging to get an immediate response in possible clients

7 0
3 years ago
Read 2 more answers
firm has 2,000,000 shares of common stock outstanding with a market price of $2 per share. It has 2,000 bonds outstanding, each
Yuki888 [10]

Answer:

A Firm

The firm's WACC is:

= 12.16%

Explanation:

a) Data and Calculations:

                                              Common               Bonds

                                                  Stock

Outstanding shares/bonds  2,000,000              2,000

Market price per unit                $2                     $1,200

Total market value             $4,000,000   $2,400,000

Total value of debt and equity = $6,400,000

Weight                                      62.5%                37.5% ($2,400/$6,400*100)

Cost of bonds (coupon rate) = 10%

Tax rate = 34%

Firm's beta = 1.5

Risk-free rate = 5%

Market risk premium = 7%

After-tax cost of bonds = 6.6% (1 - 0.34) * 10%

Cost of common stock =

Risk Free Rate + Beta x (Market Return - Risk Free Rate)

= 5% + 1.5 x (7%)

= 5% + 10.5%

= 15.5%

WACC = 15.5% * 62.5% + 6.6% * 37.5%

= 0.096875 + 0.02475

= 0.1216

= 12.16%

7 0
2 years ago
Morris owns a bicycle store. he often leaves daniel in charge of the store. one saturday evening, after daniel leaves the store,
White raven [17]
If Daniel took the cash, he could be found guilty of the crime of embezzlement. Embezzlement is a specific type of theft. It is when someone was entrusted with someone else's property (like an employer) and they steal some/all for their personal benefit.

Hope this helps! :)
3 0
3 years ago
Read 2 more answers
The company's wacc is 10. 5%. what is the irr of the better project? (hint: the better project may or may not be the one with th
Simora [160]

The better Project is Project S having a NPV of $17.968 and IRR of 12.10 %

IRR:

  • An approach to capital budgeting that is used to assess the profitability of a project is the discounted payback time. Internal rate of return is one of these capital planning strategies (IRR).
  • This rate of return corresponds to the point at which a project's net present value equals zero. Since it does not account for any outside forces, such as inflation, they call it internal.

The calculator's capabilities will be utilized to determine the IRR,

Project S

  • CF0 = (1,000)
  • CF1 = 882.62 & F01 = 1
  • CF2 = 250 & F02 = 1
  • CF3 = 15 & F03 = 1
  • CF4 = 5 & F04 = 1
  • I = 10.5%
  • [NPV] [CPT]
  • The NPV is $17.968
  • [IRR] [CPT]
  • The IRR will come as 12.10%
  • Project L
  • CF0 = (1,000)
  • CF1 = 0 & F01 = 1
  • CF2 = 260 & F02 = 1
  • CF3 = 420 & F03 = 1
  • CF4 = 732.87 & F04 = 1
  • I = 10.5%
  • [NPV] [CPT]
  • The NPV is $15.78
  • [IRR] [CPT]
  • The IRR will come as 11.03%
  • The better Project is Project S having a NPV of $17.968 and IRR of 12.10%

Learn more about IRR here brainly.com/question/7920964

#SPJ4

7 0
2 years ago
All 50 states have licensing laws that regulate persons and companies that engage in the brokerage business. Interpreting and en
BartSMP [9]

Answer:

B. Texas real estate commission

Explanation:

The Texas real estate commission is a government agency based in Texas. They are responsible for overseeing the licensing of real estate brokers and agents. They are responsible for governing the practices of real estate in Texas. They regulate organizations and individuals that in brokerage businesses. They interprete and enforce the licensing laws of real estate in Texas. They safeguard consumers/costumers in matters of real estate transactions.

3 0
3 years ago
Read 2 more answers
Other questions:
  • Anemployer may choose to match money employees invest in a
    5·1 answer
  • Makes it illegal for u.s. companies and citizens to bribe foreign officials to influence a governmental decision?
    9·1 answer
  • Which of the following occurs when a party unjustifiably fails to substantially perform his or her obligations under the contrac
    9·1 answer
  • Risks of having a checking account
    7·1 answer
  • In each of the following separate cases, indicate whether the company has entered into a finance lease or an operating lease. 1.
    10·1 answer
  • Suppose you want to invest $10,000. You have two options: Option #1: Invest in municipal bonds with an expected return of 8.00%,
    10·1 answer
  • A friend wants to borrow money from you. He states that he will pay you $2,700 every 6 months for 9 years with the first payment
    7·1 answer
  • In coffee, cherry picking, the process of ________picking is the practice of harvesting only the ripe coffee cherries.
    6·1 answer
  • The company has 7 million shares of common stock outstanding. The current share price is $68, and the book value per share is $8
    9·1 answer
  • Adams, Inc. has sales of $100,000 with a contribution margin of $60,000 and net income of $20,000. Baron, Inc. has sales of $110
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!