Determine the effective interest rate of this treasury bill

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Reference no: EM132300780

1. Let us suppose that a treasury bill that is being sold for $1000, will buy it back from you for $1080 in two years. Determine the effective interest rate of this treasury bill.

2. Let us suppose that your company sales a subscription fee for a large printing 3-D device to a local hospital. The lease contract is for 5 years, and each year they will pay $5,500. Determine the annuity present value. Assume a 2.5% interest rate.

3. Let us suppose Foogle Inc. is entering the communication equipment domain. They wish to invest 10% above industry standard into R&D. Currently, "communication equipment" companies R&D about 11% of their sales. Let us suppose that the average sales of these companies are $300,000,000 per year. How much should Foogle invest?

Reference no: EM132300780

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