The required rate of return in valuing an asset

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1. The percent markup on a pickup truck is known to be 112% based upon cost to the seller. If the seller paid $15,800 for the truck, what would be the corresponding percent markup based upon the sale price? Please round to the nearest tenth of one percent.

2. The required rate of return in valuing an asset is based on the risk involved. Identify two types of risk that affect investments and briefly describe them.

3. Elizabeth, age 62, wanted to consider the benefits of age 62 Social Security at a reduced 75 percent payout versus full payments at age 66. She could invest the monies at 5.5 percent after tax and expects to live until age 88. She will receive $15,000 a year after tax at age 66. Which alternative should she select? Please explain.

Reference no: EM131836514

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