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nikitadnepr [17]
3 years ago
10

Kathy has $50,000 to invest today and would like to determine whether it is realistic for her to achieve her goal of buying a ho

me for $150,000 in 10 years with this investment. What return must she achieve in order to buy her home in 10 years?
Business
1 answer:
Tresset [83]3 years ago
4 0

Answer:

So she must achieve about 11.61 %

Explanation:

Amount invest by Kathy = $50000

She wanted to buy a home for $150000

Time of investment = 10 years

We have to find the return which she received

Let she receives x return

So according to question 50000\times (1+x)^{10}=150000

(1+x)^{10}=3

(1+x)=3^{0.1}

(1+x)=1.1161

x=0.1161=11.61%

So she must achieve about 11.61 %

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Calculate the opportunity cost of capital for a firm with the following capital structure: 30% preferred stock, 50% common stock
expeople1 [14]

Answer:

11.21%

Explanation:

the opportunity cost of capital can be determined by calculating the weighted average cost of capital

WACC = [weight of equity x cost of equity[ + [weight of debt x cost of debt x (1 - tax rate)] + [weight of preferred stock x cost of preferred stock]

0.3 x 10.76 + (0.5 x 13.91) + (0.2 x 0.65 x 7,87)

3.228 + 6.955 + 1.231

11.21%

5 0
3 years ago
The management of urbine corporation is considering the purchase of a machine that would cost $340,000 would last for 4 years, a
attashe74 [19]

The net present value of the proposed project is closest to -$80,822.

Since the project saves $80,000 in costs each year, we treat these savings income for the next 4 years. We then calculate the Present value Interest Factor of an annuity using the formula :

PVIF of an annuity = { [ 1 - [ (1+r)⁻ⁿ ] } ÷ r

PVIF of an annuity = { [ 1 - [ (1.09)⁻⁴ ] } ÷ 0.09

PVIF of an annuity = 3.240 (rounded to three decimals)

PV of the cost savings = (3.240*80000) = $2,59,178 (rounded to nearest $)

NPV = PV of cost savings - Value of investment

NPV = 2,59,178 - 3,40,000

3 0
3 years ago
Item 4Item 4 You’ve collected the following information from your favorite financial website. 52-Week Price Stock (Div) Div Yld
Leona [35]

Answer:

P₀ = $106.96

Explanation:

the current dividend paid by IBM was $6.30 per stock

Div₀ = $6.30

Div₁ = $6.615

Div₂ = $6.94575

Div₃ = $7.2930375

Div₄ = $7.657689375

Div₅ = $8.040573844

Div₆ = $8.321993928

we must first determine the terminal value at year 5 = Div₆ / (rrr - g) = $8.321993928 / (10% - 3.5%) = $128.0306758

now we must discount the future values using the 10% discount rate:

P₀ = $6.615/1.1 + $6.94575/1.1² + $7.2930375/1.1³ + $7.657689375/1.1⁴ + $8.040573844/1.1⁵ + $128.0306758/1.1⁵ = $6.013 + $5.740 + $5.479 + $5.230 + $4.993 + $79.50 = $106.96

7 0
3 years ago
I................................
asambeis [7]

Answer:

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6 0
2 years ago
Want is a trial balance​
Scrat [10]

Answer: A trial balance is a bookkeeping worksheet in which the stability of all ledgers are compiled into debit and savings account column totals that are equal. The typical purpose of producing a trial stability is to ensure the entries in a company's bookkeeping device are mathematically correct.

Explanation:

4 0
3 years ago
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