Evaluate amount should they pay for this investment

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Reference no: EM1312198

Investment making using the information.

1. The Company is considering an investment that will return a lump sum of $700,000, 10 years from now. What amount should they pay for this investment in order to earn an 6% return?

2. The Company borrows on a mortgage. It is a 15 year mortgage, interest is 9%. There are annual, year end installment payments of $14,000. What amount did The Company borrow?

3. The Company issues 10%, 10 year, $400,000 par value bonds that pay interest semi-annually on 12/31 and 6/30. The bonds are issued on 6/30. The discount rate for similar bonds is 8%. What were the cash proceeds that The Company received?

Reference no: EM1312198

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