Account earning an interest rate

Assignment Help Financial Management

Reference no: EM132049826

1. Your aunt places $10,000 into an account earning an interest rate of 3% per year. After 5 years the account will be valued at $11,592.74. Which of the following statements is correct? A) The present value is $10,000, the time period is 3 years, the present value is $11,592.74, and the interest rate is 5%. B) The future value is $10,000, the time period is 5 years, the principal is $11,592.74, and the interest rate is 3%. C) The principal is $10,000, the time period is 5 years, the future value is $11,592.74, and the interest rate is 3%. D) The principal is $10,000, the time period is 3 years, the future value is $11,592.74, and the interest rate is 5%. SHOW WORK

2. You can buy a piece of land for $1,000,000. You think you will be able to sell it to a developer in about five years for twice that amount. Assume the cash flows in the interim years are $0. You think an investment with this much risk requires an expected return of in the range of 12% to 14% per year. What is the NPV?

A. <$0

B. =$0

C. >$0

D. Insufficient information

Reference no: EM132049826

Questions Cloud

How is it used by forensic scientists : Once DNA has been extracted from cells, how can it be used in the medical field? How is it used by forensic scientists?

How can we control aircraft noise at the airport : How can we prevent developers from building tall structures that could obstruct the airport's approaches?

What is one way farmers are protecting the environment : What is one way farmers are protecting the environment? What is one way farmers could harm the environment?

Find present value of annuity due with same length of life : If the present value of an ordinary, 20 year annuity is $40,000 and interest rates are 5%, what is the present value of an annuity due with the same length.

Account earning an interest rate : Your aunt places $10,000 into an account earning an interest rate of 3% per year. After 5 years the account will be valued at $11,592.74.

What is the present value of a perpetual stream of cash flow : (Present value of a growing perpetuity) What is the present value of a perpetual stream of cash flows that pays ?$5,000 at the end of year one and the annual.

Is it or is it not a good scientific hypothesis : Is it or is it not a good scientific hypothesis? IF IT IS, then how might you go about confirming or falsifying the hypothesis?

Determine the amount of manufacturing overhead : Determine the amount of underapplied or overapplied manufacturing overhead for the period

Myelogenous and lymphocytic leukemia : What is the difference between myelogenous and lymphocytic leukemia?

User Account

All Pages