Find what minimum rate of interest investor should shop for

Reference no: EM131900224

Problem

An investor is being asked to invest in a project with an initial investment of $3,000 with first year income of $400 increasing by $100 every year for five years. His MARR is 5%. If he phones you with this problem when you have no access to anything other than paper and pen, what would be your recommendation to him? Should he accept this proposal or not? Explain your answer. 10- An investor is offered the opportunity of investing $100,000 in a six year project that will have a net income of $25,000 per year.

a. If inflation is a constant 4% per year and his after inflation MARR is 10%, should he invest in this project?

b. If he is looking to invest his $100,000 where he can get an inflation adjusted (i.e., net, after inflation is taken into account) of 12%, what minimum rate of interest he should shop for?

Reference no: EM131900224

Questions Cloud

Compute the planned production of finished goods : Compute the planned production of finished goods (in units). Compute the cost of finished goods manufactured. Compute the cost of goods sold.

Review problem of whistle-blowing : R.U. Kidding, the comptroller for Rocket Man Enterprises, a government defense contractor, has a delicate ethical issue on his hands.

What is the capitalized cost of the equipment : Purchase Price $45,000 Shipping Costs $250 Install/Setup Costs $1,000 Salvage Value $3,950 Useful Life 6 Years What is the capitalized cost of the equipment

Temple of philae at aswan and the temple of horus at edfu : Temple of Philae at Aswan and the Temple of Horus at Edfu. These were built in a period of Roman domination of Egypt.

Find what minimum rate of interest investor should shop for : If he is looking to invest his $100,000 where he can get an inflation adjusted of 12%, what minimum rate of interest investor should shop for?

What the animal represented in ancient egyptian art : Describe what the animal (Scorpion) represented in ancient Egyptian art. , where they would be depicted in art scenes, what deity it was associated

How long will it take the farmers torecoup the costs : The wheat harvesting season in the AmericanMidwest is short, and most farmers deliver theirtruckloads of wheat to a giant central storage bin within atwo-week.

Which of the buses if any should the company buy : If the transportation company has MARR of 15%, which of the buses if any should the company buy? Use the ROR method.

Ancient and modern book keeping : You wrote an essay for me on Ancient and modern book keeping. I need a small abstract paragraph on it. would you be able to do it?

User Account

All Pages