How much should pay for the investment

Assignment Help Financial Accounting
Reference no: EM132519682

Question a. Kristi is considering an investment that will pay $7,500 a year for eight years, starting one year from today. How much should she pay for this investment if she wishes to earn a 6% rate of return? Provide complete calculations in your answer

Question b. Kristi was offered three (3) different assets, as listed below:

  • Asset 1 pays annual interest rate of 9% compounding annually.
  • Asset 2 pays annual interest rate of 8.9% compounding semi-annually.
  • Asset 3 pays interest rate 8.95 compounding monthly.

Based on effective annual interest rate calculations, which of the above assets is the best choice for Kristi. Show your calculations for all three (3) assets.

Reference no: EM132519682

Questions Cloud

Practical field trip report : Practical field trip report - The mapping must be done via a pen/pencil and a tracing paper for the stereonet graph with the data present.
Find what annual rate of return must earn on investment : Find What annual rate of return must you earn on your investment to achieve your target? Provide complete calculations in your answer.
Subsidize the salaries of business : The Hong Kong government proposed to subsidize the salaries of business. Discuss why some small business still decide to close in short run.
Cureall charge for a dose of the drug : Suppose that Cureall is sold to a charitable organisation whose mission is to maximise total surplus. How many doses of the drug would the organisation
How much should pay for the investment : How much should she pay for this investment if she wishes to earn a 6% rate of return? Provide complete calculations in your answer
Primary task response : Primary Task Response: Your first task is to post your own Key Assignment Outline to the discussion area so that other students are able to review your plan.
Subgame perfect nash equilibrium : Describe and explain the strategies of State ER and University ER in the Subgame Perfect Nash Equilibrium (SPNE) of this game respectively.
The incident command system : The Incident Command System (ICS) is tool for: ICS can be used to manage all types of incidents. Federal law requires that ICS be used for all natural disasters
What amount of income is credited to west capital account : Smith, West, If the partnership reports income of $174,000 for its first year, what amount of income is credited to West's capital account?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Sales estimates and macrs depreciation allowance percentages

The Blue Lagoon is considering a project with a five-year life. The project requires $110,000 of fixed assets that are classified as five-year property for MACRS. Variable costs equal 71 percent of sales, fixed costs are $9,600, and the tax rate is 3..

  The aicpa professional code of conduct prohibits accountants

The AICPA Professional Code of Conduct prohibits accountants from breaching the rule of client confidentiality. Specifically, under Rule 301, public accountants who are members of the institute are not allowed to disclose any confidential info..

  Contrast internal rate of return approach to net present

Why do you think the beta of a company and those of the 3 companies you found are different from each other? Provide as much information as you can

  How much will have in account nine years from today

You plan to invest $3,300 for 5 additional years at 7.8 percent compounded annually. How much will you have in your account 9 years from today?

  Revenue recognition for companies selling bundled contracts

Give an overview of how this method affects revenue recognition for companies selling bundled contracts. How does this principle help a company report how it’s truly performing financially?

  What is the depreciation expense on this asset

Carson Company purchased a depreciable asset for $280,000. The estimated salvage value is $14,000, and the estimated useful life is 10,000 hours. Carson used the asset for 1,500 hours in the current year. The activity method will be used for deprecia..

  Calculate johnsons expense deduction

Calculate Johnson's expense deduction and fill-in 2011 Form 2106 (Employee Business Expenses) based on actual automobile expenses and other employee business expenses as shown above.

  Prepare net sales portion of companys multiple-step income

A company reports the following sales related information: Sales (gross) of $101,000; Sales discounts of $3,400; Sales returns and allowances of $8,600; Sales salaries expense of $6,900. Prepare the net sales portion of the company's multiple-step ..

  The assignment of receivables

Record the borrowing, the assignment of receivables

  Consider how accountants stay ethical in their job

Consider how accountants stay ethical in their job or how respect for the profession maintains an accountant’s ethical conscience. What is a plan for making sure you remain an ethical accountant?

  Obtaining the socially optimal level of output

In the context of externalities, which method helps in obtaining the socially optimal level of output?

  Entry to adjust the balance in deferred tax assets

At the end of December 2013, Rosenfeld Co. had $10,000 of Deferred Tax Assets related to its Allowance for Doubtful Accounts. In response to low public approval ratings (and after a particularly boisterous holiday party), the US Congress passed a law..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd