Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Consider the given investment projects:

Projects cash flows

n

A

B

C

D

0

($2,000)

($3,000)

($1,000)

 

1

1,000

4,000

1,400

($1,000)

2

1,000

 

-100

1,090

3

1,000

 

 

 

*i

23

33.33%

32.45%

9%

Assume that you have only 3,500 dollars available at period 0.  Neither additional budgets nor borrowing are allowed in any future budget period.  However, you can lend out any remaining funds [or available funds] at ten percent interest per period.

[A] If you want to maximize the future worth at period three, which projects would you select?  Determine the future worth (the total amount available for lending at the end of period 3)?  No partial projects are allowed.

[B] Assume in [A] that, at period 0, you are allowed to borrow $500 at an interest rate of 13 percent.  The loan has to be repaid at the end of year 1.  Which project would you select to maximize your future worth at period 3?

[C] Considering a lending rate of 10 percent & a borrowing rate of 13 percent, find the reasonable MARR for project evaluation?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M917051

Have any Question? 


Related Questions in Basic Finance

You work for a company with no international experience

You work for a company with no international experience that has an efficient production method for small engines. A Vietnamese company approaches your CEO with a proposal to form a joint venture with your company in Vie ...

Assignmentglobal stock market and exchange rate

Assignment Global Stock Market and Exchange Rate Fluctuations Financial crises have short-term and long-term effects. However, most often analysts are focused only on short-term effects. In this assignment, you will be c ...

Part a answer each of the following questions in a

Part A: Answer each of the following questions in a composition of one to two paragraphs, or perform calculations as requested. 1. Define liquidity risk, default risk and taxability risk, and explain how these risks rela ...

A project has the following incremental cash flows for

A project has the following incremental cash flows for years zero, through year 4, respectively: -$3,000, $1,900, $900, and $800. Is 9% the IRR of this project? If not, is where is the IRR compared to 9%?

1 why is cindy fratelli unprepared to play an ihr role2 how

1. Why is Cindy Fratelli unprepared to play an IHR role? 2. How can she prepare herself? 3. What areas of IHR will Cindy need to learn?

1 how do you explain why the underwriting spread on ipos

1. How do you explain why the underwriting spread on IPOs averages about 7 percent of the offering price, whereas the underwriting spread on a seasoned offering of common stock averages less than 5 percent? 2. Discuss th ...

1 discuss the effects of risk and term of a bond on the

1. Discuss the effects of risk and term of a bond on the interest rate paid. 2. What are some of the constraints on the recovery and growth of the GSE and private mortgage-backed securities market? 3. How can pre-purchas ...

In a poll 210 of 1050 randomly selected adults aged 18 or

In a poll, 210 of 1050 randomly selected adults aged 18 or older stated that they believe there is too little spending on national defense. Find a 90% confidence interval for the proportion of adults aged 18 or older who ...

1 what type of portfolio should a new college graduate

1. What type of portfolio should a new college graduate start to build? Briefly explain what types of assets may be good choices to include in a portfolio for these investors. 2. Explain why each of the following changes ...

The following is from a business report by the reuters news

The following is from a business report by the Reuters news agency: "Online retailer Overstock.com . . . posted a surprise quarterly profit and its shares jumped as much as 34 percent to their highest level in almost two ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen