Cash flow projections are central component to the analysis

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1. Cash flow projections are a central component to the analysis of new investment ideas. In most firms, the person responsible for making these projections is not the same person who generated the investment idea in the first place. Why?

2. Edward and Janice want to buy a boat for their family to water ski on Utah Lake. If they invest $600 at the end of each month in a money market account that averages an annual return of 6.20% (compounded monthly), approximately how long will it take them to save $30,000?

3. You want to borrow $12,850 for one year. The interest rate is 10%. You and the lender agree that the interest on the loan will be paid after one year. What is the effective rate of interest on the loan?

A) 10.000%

B) 8.9911%

C) 9.6364%

D) 9.912%

E) 9.975%

Reference no: EM131972609

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