Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The initial investment for each project is $50,000. Project A will generate cash inflows equal to $15,625 at the end of each of the next five years; Project B will generate only one cash inflow in the amount of $99,500 at the end of the fifth year (i.e., no cash flows are generated in the first four years). The required rate of return of Ace Inc. is 10 percent.
To determine which project to choose we need to use the following formula:
NPV= -Io + ∑[Cf/(1+i)^n]
Cf= cash flow
Project A:
Io= -50,000
Year 1to 5= 15,625
NPV= $9,231.04
Project B:
Io= 50,000
Year 5= 99,500
NPV= -50,000 + 99,500/1.10^5= 11,781.67
The highest NPV is the best option. Therefore, project B is the best.
Answer:
Answer is given below.
Explanation:
Preferred stock yield = dividend/ stock price
a) dividend =$1.81 , stock price =$30
Preferred stock yield = $1.81/$30= 6.033%
b) dividend =$1.81 , stock price =$25
Preferred stock yield = $1.81/$25=7.24 %
a. Nominal interest rates Increase and Aggregate demand Decrease
b. New Fed policy Buy bonds
Explanation:
When contemplating unemployment, the nominal interest rate applies to the rate of interest. Net may, without taking into consideration any commissions or compounded interest, be related to the advertised or reported interest rate of a loan.
The aggregate demand (AD) for finished commodities and facilities in the market at a certain time is aggregated. Strong demand is often named, but this term is often used in many ways. This is the market for a country's gross national product.
When the Fed sells debt in the international market, the world economy money supply is expanded by exchanging debt for cash from the general public. Instead, when the Fed sell bonds, the supply of money is reduced by cash being pulled out of the market in return for bonds. The Fed also sells bonds.
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Answer:
B) The money they saved in the past is worth less in the future
Explanation:
