What is the highest loan rate that would support investing

Assignment Help Business Economics
Reference no: EM13798068

Suppose you have an asset that costs $11 in time period zero and has an IRR of 18%. With a retained earning rate of 5% on your remaining $7, what is the highest loan rate that would support investing in this asset? Calculate.

Reference no: EM13798068

Questions Cloud

Best example of a government sanctioned monopoly : 1. Which of the following is the best example of a government sanctioned monopoly? a. a public utility company. b. a k-12 public education school district. c. a newly patented drug. d. Microsoft's Windows products. e. All are very good examples of su..
Consider the fictitious good derp : Consider the fictitious good Derp. The demand for Derp is Q = 1200 - 2P. Suppose the supply of Derp is given by Q = -600 +2P. What is the equilibrium price of Derp? What is the equilibrium quantity of Derp? What is the price elasticity of demand at t..
What is the incremental cost of funds on asset : Suppose you have three indivisible assets, A, B and C with internal rates of return 2%, 5% and 10% respectively and initial costs of $1, $4, $5. Suppose you have $8.0 at 1% and can borrow at 8%. What is the incremental cost of funds on asset B?
Capital budgeting problem-investment combinations : Assuming you have a capital budgeting problem with 6 investment options, what is the maximum number of investment combinations you would have to test? Calculate. Show work
What is the highest loan rate that would support investing : Suppose you have an asset that costs $11 in time period zero and has an IRR of 18%. With a retained earning rate of 5% on your remaining $7, what is the highest loan rate that would support investing in this asset? Calculate.
Calculate new long-run equilibrium values for income-prices : In the year of the shock, compute the value of GDP, price level, interest rates, and real money supply. Hint: Derive IS and LM equations to find GDP and interest rates. Calculate the new long-run equilibrium values for income, prices, interest rates,..
Draw the production possibilities frontier : An economy consists of three workers: Larry, Moe, and Curly. Each works for ten hours per day and can produce two services: Mowing lawns and washing cars. Calculate how much of each service is produced under the following circumstances. You can use a..
Coupon bond with a face value-shares of a stock : An investment advisor has shown you two investments. Which investment would you recommend and why. Submit using a spreadsheet. Bond: Coupon bond with a face value of $50,000 that can be purchased today for $48,000 that matures in 5 years. Its annual ..
Discuss technology literacy assessment : Discuss Technology Literacy Assessment (TLA). In your paper be sure to define TLA and include a discussion of why it is important. Papers should be formatted according to APA standards and should be at least 7-10 pages and at least 6 sources to be co..

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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