Answer:
3.14 years
Explanation:
Year Cash flow Accumulated cash flows
0 -$4,900 -$4,900
1 $1,150 -$3,750
2 $1,350 -$2,400
3 $2,230 -$170
4 $1,250 $1,080
3 years + $170/$1,250 = 3.14
The payback period is 3.14 years, or 3 years, 1 month and 19 days.
Answer:
C $1,104
Explanation:
TIPS are the form of bonds which are specially designed for the purpose to protect the investors against the inflation.
The principal value of the bond in case of TIPS is adjusted for yearly inflation.
Based on the above discussion the value of TIPS bond can be calculated using the below formula:
Value of bond at maturity=Principal amount (1+inflation rate)^5
=1,000(1+2%)^5
=1,104
So the answer is C $1,104
Answer:
D
Explanation:
A statement of the basic purpose that makes the organization different from others.