An investment will pay $205,000 in one year's time for an investment of $183,000 today. If the market interest rate is 8% over the same period, should this investment be made?
A) Yes, because the investment will yield $7360 more than putting the money in a bank.
B) Yes, because the investment will yield $4280 more than putting the money in a bank.
C) No, because the investment will yield $6240 less than putting the money in a bank.
D) Yes, because the investment will yield $2360 more than putting the money in a bank.
Correct Answer:
Verified
Q35: What is one of the main obstacles
Q68: A wholesale food retailer is offered $14
Q71: Owen expects to receive $20,000 at the
Q73: In order to distinguish between inflows and
Q77: A backhoe can dig 150 feet of
Q78: What is one of the prerequisite conditions
Q95: To calculate a cash flow's present value
Q100: Is there a need to distinguish between
Q105: If an analyst adds cash flows occurring
Q112: Why should interest rates be generally positive?
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents