What serial payment should ashfaq invest at the end

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Reference no: EM131890217

1. Ashfaq wants to start his own business in 6 years. He needs to accumulate Rs 200,000 (today's Rs) in 6 years to sufficiently finance his business. He assumes inflation will average 4%, and he can earn a 9% compound annual after-tax return on investments. What serial payment should Ashfaq invest at the end of the first year to attain his goal?

2. Faiza estimates his opportunity cost on investments at 10.5% compounded annually.

Which one of the following is the best investment opportunity for Faiza?

a. To receive Rs 45,000 today

b. To receive Rs 120,000 at the end of 10 years

c. To receive Rs 5,500 at the beginning of each year for 15 years

d. To receive Rs 5,500 at the end of each year for 19 years

e. To receive Rs 5,750 at the end of each year for 17 years

Reference no: EM131890217

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