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Alla [95]
3 years ago
6

Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, an auction

house sold a sculpture at auction for a price of $10,331,500. Unfortunately for the previous owner, he had purchased it in 2000 at a price of $12,417,500.
What was his annual rate of return on this sculpture? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Leviafan [203]3 years ago
8 0

Answer:

-5.95%

Explanation:

A = P(1+r)^n

A is the auction price at which the sculpture was sold = $10,331,500

P is the price the sculpture was purchased = $12,417,500

n is the time interval between the year of sales and year of purchase

10,331,500 = 12,417,500(1+r)^3

(1+r)^3 = 10,331,500/12,417,500

(1+r)^3 = 0.832

1+r = (0.832)^1/3

1+r = 0.9405

r = 0.9405 - 1 = -0.0595 = -5.95%

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Answer:

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5 0
3 years ago
If the inflation rate unexpectedly rises:_______.a. borrowers gain at the expense of lenders.b. lenders will gain at the expense
Alborosie

Answer:

a. borrowers gain at the expense of lenders

Explanation:

Inflation refers to the sustained increase of the price of a commodity over a period of time.

It can be caused due to increase in production cost or increased demand of a good or service.

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7 0
3 years ago
Read 2 more answers
Fama’s Llamas has a WACC of 9.7 percent. The company’s cost of equity is 12 percent, and its pretax cost of debt is 7.5 percent.
Bezzdna [24]

Answer:

0.4766

Explanation:

Given:

WACC = 9.7%

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Tax rate = 35%

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WACC

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or

0.097 = weight × 0.12 + ( 1 - weight ) × 0.075 × (1 - 0.35)

or

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or

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or

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also,

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or

\frac{\textup{1}}{\textup{weight}}  = \frac{\textup{Debt+equity}}{\textup{Equity}}

or

\frac{1}{0.6772} = \frac{\textup{Debt}}{\textup{Equity}}  + 1

or

1.4766 = \frac{\textup{Debt}}{\textup{Equity}}  + 1

or

\frac{\textup{Debt}}{\textup{Equity}}  = 0.4766

5 0
3 years ago
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tiny-mole [99]
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3 years ago
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kondaur [170]

Answer:

The sales tax

Explanation:

8 0
3 years ago
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