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Rudiy27
2 years ago
11

You lend a friend ​$​, which your friend will repay in equal annual​ end-of-year payments of ​$​, with the first payment to be r

eceived 1 year from now. What rate of return does your loan​ receive?
Business
1 answer:
Vadim26 [7]2 years ago
6 0

Answer: 18%

Explanation:

The payments that your friend will make are an annuity as they are constant. This means that the loan amount of $15,000 is the present value of the annuity.

To find the rate of return, use the factor tables.

Present value of annuity = Annuity * Present value interest factor of annuity, 14 years, ?%

15,000 = 3,000 * Present value interest factor of annuity, 14 years, ?%

Present value interest factor of annuity, 14 years, ?% = 15,000 / 3,000

Present value interest factor of annuity, 14 years, ?% = 5.0

Go to the present value of annuity factor table and find out what interest rate intersects with 14 periods such that the factor is 5.0.

That rate is 18%.

Rate of return is therefore 18%.

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When buyers use ___________________ to draw inferences about the quality of products, then markets may have trouble reaching ___
bagirrra123 [75]

Answer:

Market price; Equilibrium price

Explanation:

The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the point at which the demand and supply curves in the market intersect. It become hard to reach equilibrium price and quantity when customers infer the quality of a product by its price cos that will inform their purchasing decision.

7 0
3 years ago
cash transactions involving the purchase and sale of long-term assets and current investments are classified on the statement of
ivanzaharov [21]

Answer: Investing Activities

Explanation: The investing activities lists all of the purchases and sales of long-term fixed assets, such as equipment, building, land, and the purchase of shares.

Hope this helps.

7 0
2 years ago
Why would the US government sell government securities to private individuals and organizations?
shusha [124]
D to increase the money supply and lower the inflation rate
4 0
3 years ago
Brandtly Industries invests a large sum of money in R&D; as a result, it retains and reinvests all of its earnings. In other
Rama09 [41]

Answer:

a. What is the present value of the free cash flows projected during the next 4 years?

the NPV of the firm's cash flows = $3/1.09 + $6/1.09² + $8/1.09³ + $16/1.09⁴ = $2,752,294 + $5,050,080 + $6,177,468 + $11,334,803 = $25,314,645

b. What is the firm’s horizon, or continuing, value?

to calculate terminal or horizon value at year 4, we must use the Gordon growth model formula:

terminal value = [$16,000,000 (1 + 3%)] / (9% - 3%) = $16,480,000 / 6% = $274,666,667

c. What is the firm’s total value today?

firm's total present value = $25,314,645 + ($274,666,667/1.09⁴) = $219,895,463

d. What is an estimate of Brandtly’s price per share?

Brandtly's share price = (firm's present value - total debt) / outstanding stocks = ($219,895,463 - $75,000,000) / 7,500,000 million stocks = $19.32 per stock

7 0
3 years ago
What is one TRUE statement about the stock exchange?
Travka [436]

Answer:

Explanation:

  1. For every seller, there has to be a buyer. For every buyer, there has to be a seller.
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  3. There are many parameters used to determine if a stock should be bought or sold.
3 0
3 years ago
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