Would you still choose the same alternative

Assignment Help Finance Basics
Reference no: EM13282822

Your grandfather has offered you a choice of one of the three following alternatives: $5,000 now; $1,000 a year for eight years; or $12,000 at the end of eight years. Assuming you could earn 11 percent annually, which alternative should you choose? If you could earn 12 percent annually, would you still choose the same alternative?

Reference no: EM13282822

Questions Cloud

Explain the general molecular formula for cycloalkanes : The general molecular formula for alkanes is CnH2n+2. What is the general molecular formula for cycloalkanes with two rings
What single payment could be made : You need $23,956 at the end of nine years, and your only investment outlet is a 7 percent long-term certificate of deposit (compounded annually). With the certificate of deposit, you make an initial investment at the beginning of the first year.
What is the maximum strength of the waves electric field : The maximum strength of the magnetic field in an electromagnetic wave is 3.44E-6 T. What is the maximum strength of the wave's electric field
Describe what is the activation energy for the reaction : For the gas phase decomposition of C2H5Cl, a graph of ln t versus 1 / T produced a straight line with a slope of 2.98 × 104 K. What is the activation energy for this reaction
Would you still choose the same alternative : Assuming you could earn 11 percent annually, which alternative should you choose? If you could earn 12 percent annually, would you still choose the same alternative?
How much energy does the wave carry through the window : The wave passes perpendicularly through an open window, the area of which is0.244 m2. How much energy does this wave carry through the window during a 48.9 s phone call
What is the pressure at the bottom of the water : A 70.0 cm thick layer of oil floats on a 120 cm thick layer of water. What is the pressure at the bottom of the water
What is the net incremental tax cash flow : The firm's marginal tax rate is 34 percent and its required rate of return is 12%. What is the net incremental tax cash flow?
State what is the hydronium ion concentration of acetic acid : What is the hydronium ion concentration of a 0.500 M acetic acid solution with Ka = 1.8 x 10-5. The equation for the dissociation of acetic acid is: CH3CO2H(aq) + H2O(l) H3O+(aq) + CH3CO2-(aq)

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the return on stockholder''s equity?

Jerry Rice Stores has $4,000,000 in yearly sales. THe firm earns 3.5% on each dollar of sales and turns over its assets 2.5 times per year. It has $100,000 in current liabilities and $300,000 in long-term liabilities.

  Calculate the monthly payment

Pretend that you are planning purchasing a car that costs $25,699. The car gets 23 miles per gallon in the city, and thirty miles per gallon on the highway.

  Calculate the cost of internal common equity

Earnings are expected to continue to grow at the same annual rate in the future as during the past 5 years. The firms marginal tax rate is 34 percent. Calculate the cost of (a) internal common equity and (b) external common equity. Please show you..

  Calculate a fair price for the stock of united sports

If the discount rate is 9%, calculate a fair price for the stock of United Sports, Inc.

  Find the conversion premium in dollars and in percent

Xilinx, a company in the semiconductor industry, has a $1,000 convertible bond with a conversion ratio of 32.076 and a coupon of 3.125%. The bond is currently priced at $751. Xilinx stock trades at $19.25, and pays an annual dividend of $0.56.

  Determine work in process inventory

Emmy Corporation had starting raw materials inventory of $7,000. During the period, the company purchased $47,000 of raw materials on account.

  What is the fair price of this investment

An investment pays $2,500 per year for the first 6 years, $3,000 per year for the next 8 years, and $5,000 per year the following 10 years (all payments are at the end of each year). If the discount rate is 7% compounding quarterly, what is the fa..

  What is the companys current stock price

XYX Company is expected to pay a dividend of $1.60 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. If the required rate of return on the common stock is 10.33% What is the..

  Debt financing and long term expenditures

You're the controller of a firm whose CEO believes which debt must always be employed to finance long-term expenditures because interest is tax deductible and debt does not dilute ownership.

  Competitive consequences of restructuring

In order to cut expenses when the dollar was at its peak, Caterpillar shifted production of small construction equipment overseas. By contrast, Caterpillar's main competitors in that area,

  What was the taxes due

A huse was purchsed on June 5th. The sales price 179,500 and the buyer obtained a 85% loan. What was the taxes due?

  What is the estimated cost of common equity using the capm

What is the estimated cost of common equity using the CAPM? Round your answer to two decimal places.

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