Answer:
Explanation:
There is a correlation between inflation and house prices. ... When interest rates are low, buying homes can be more affordable and increase the demand for homes. If the supply of homes remains constant and the demand increases, then the prices of homes will increase.
They are using the Dual income and no kids method
Answer:
USING 0% DISCOUNT RATE
PROJECT E
Year Cashflow [email protected]% PV
$ $
0 (23,000) 1 (23,000)
1 5,000 1 5,000
2 6000 1 6,000
3 7000 1 7,000
4 10,000 1 10,000
NPV 5,000
PROJECT H
Year Cashflow [email protected]% PV
$ $
0 (25,000) 1 (23,000)
1 16,000 1 16,000
2 5,000 1 5,000
3 4,000 1 4,000
NPV 2,000
Project A should be accepted
USING 9% DISCOUNT RATE
Year Cashflow [email protected]% PV
$ $
0 (23,000) 1 (23,000)
1 5,000 0.9174 4,587
2 6000 0.8462 5,077
3 7000 0.7722 5,405
4 10,000 0.7084 7,084
NPV (847)
PROJECT H
Year Cashflow [email protected]% PV
$ $
0 (25,000) 1 (23,000)
1 16,000 0.9714 15,542
2 5,000 0.8462 4,231
3 4,000 0.7722 3,089
NPV (138)
None of the projects should be accepted because they have negative NPV
Explanation:
The question requires the computation of NPV using 0% and 9%.
The cashflows of the two projects will be discounted at 0% and 9%.
The discount factors for each project can be calculated using the formula (1+r)-n. The cashflows of the projects will be multiplied by the discount factors to obtain the present values. NPV is the difference between present values of cash inflows and initial outlay.
I think the answer is B: a person with a credit score of 760 with a small amount of debt who has had steady employment for many years.
