Define quarterly rate of return and an effective annual rate

Reference no: EM131806486

Question: A student organization, at the beginning of the fall quarter, bought and operated a soft-drink vending machine as a means of helping finance its activities. The vending machine cost $75 and was installed at a gasoline station near the university. The student organization pays $75 every 3 months to the station owner for the right to keep the vending machine at the station. During the year the student organization owned the machine, they received the following quarterly income from it, before making the $75 quarterly payment to the station owner:

Quarter Income

Fall $150

Winter 25

Spring 125

Summer 150

At the end of one year, the student group resold the machine for $50. Determine the quarterly cash flow. Then determine a quarterly rate of return, a nominal annual rate, and an effective annual rate.

Reference no: EM131806486

Questions Cloud

Calculate synergy from acquisition : Calculate synergy from acquisition: Based on the below proposed breakdowns on benefits and costs, what will be the synergy for the acquisition?

What rate of return did the businessmen obtain : A group of businessmen formed a partnership to buy and race an Indianapolis-type racing car. They agreed to pay an individual $50,000 for the car.

What is the constant beginning-of-month payment : One option is to pay off the debt in constant amounts at the beginning of each month over the next 10 years at a nominal annual interest rate of 10%.

What are your memories of math in elementary school : What are your memories of math in elementary school, middle school, high school, college? How do you view the use of math in daily existence?

Define quarterly rate of return and an effective annual rate : A student organization, at the beginning of the fall quarter, bought and operated a soft-drink vending machine as a means of helping finance its activities.

Calculate economic profits: : Calculate Economic Profits: Should X continue working as a consultant, or should he teach economics instead?

Compute the variable overhead spending variances : During the current quarter, the company operated at 70% of capacity and produced 40,600 units of product; Compute the variable overhead spending variances

List one activity you could utilize for each math practice : What is the importance of the mathematical practice as it pertains to student learning. List one activity you could utilize for each math practice.

Calculate value creation from acquisition : Calculate value creation from acquisition. What is the value creation to Apple from this acquisition deal?

User Account

All Pages