Answer:
10%
Explanation:
Value of investment in the beginning = $30,000
Value of investment at the end = $30,000 (1 + 0.08)
= $30,000 × 1.08
= $32,400
Interest paid = $15,000 × 6%
= $900
Rate of return:



= 10%
Rate of return is 10% if the price of Telecom stock goes up by 8% during the next year.
Answer:
Using the flow-equity method of valuation the borrowed is $67600,option B.
Explanation:
In order to determine the amount borrowed in executing the project, we make use of the below formula which shows that we are working backwards.
Amount borrowed=present value of cash inflows-levered cash flows
present value of cash inflows=net present value+initial investment
present value of cash inflows=$157000+$640000
present value of cash inflows=$797000
levered cash flows=$729400
Amount borrowed=$797000-$729400
amount borrowed =$67600
compound interest
after getting the simple interest of all the years we subracts the main amount with the simple interest which we got till now .it's called as compound interest
When in the statement of cashflows, the cash inflows and the outflows are added, the result is the <u>change </u><u>in the </u><u>cash balance. </u>
The statement of cashflows shows the movement of cash in a company and how much cash the company is left with at the end of the period.
The statement includes:
- Cash outflows which are deductions
- Cash inflows which bring in money
Cash outflows are denoted in negatives and when added to cash inflows, show the change in the cash that the company has / its balance.
In conclusion, adding the cash inflows and outflows shows the change in cash.
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