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- Suppose you purchase a new house for $200 000, making a down payment of 5% and takingout a mortgage on the balance. What is the return on your investment in your house if one yearlater the price of your house increased by 10%? (show your work).A) 100%B) 150%C) 200%D) 220%Calculate change in stock if gross domestic capital formation is $500 million, gross fixed capital formation is $420 millionCalculate the net present value (NPV) before tax of investment A: a factory. Base your calculation on the following information: The investment cost is paid in full in quarter 0, and the cost of the factory is 100000. The factory has a lifetime of 20 quarters (5 years) and the value of the factory at the end of quarter 20 is 0 Only Basic jetpacks should be manufactured at the factory throughout its lifetime. There is no investment in research to streamline production or material consumption. Suppose the quarterly demand in the market is constant and given at P = 228 - 0.007 * Q, where P is price and Q is the number of jetpacks in demand. There are 5 competitors in the market (including you), and all sell the same number of jetpacks each quarter at the price of 193 each. You produce as much as you sell. The costs associated with the quarterly production at the factory are given at K = 158 * Q + 20000, where 158 * Q is direct labor cost and materials, and 20000 is quarterly maintenance…
- An investor has an account with stock from two different companies. Last year, his stock in Company A was worth $2500 and his stock in Company B was worth $6360. The stock in Company A has decreased 23% since last year and the stock in Company B has decreased 5%. What was the total percentage decrease in the investor's stock account? Round your answer to the nearest tenth (if necessary).Use the following information to answer the question which immediately follows 200-80r, L= 0.5Y Y 2,000 GT= 200, Cd 400+0.9(Y What is the value of investment 2. T)-600r. Id Select one: a 150 4 b. 160 360.5 d. 200 500, M-5000, P=7.35,=0.02 27INR Ltd’s earnings per share next year is expected to be $2.10 and this is expected to grow at5% p.a. for the foreseeable future. Its required rate of return on equity has been estimated at 9%p.a. INR Ltd has a policy of reinvesting 40% of its earnings. The present value of INR Ltd’sgrowth opportunities is closest to: A. $7.78.B. $8.17.C. $11.11.D. $12.11
- Calculate the value of gross fixed capital formation if gross domestic capital formation is $800 million and the Change in stock is $50An economy is currently at it's steady state. Their depreciation rate is 10.5% and their capital stock is 1,237. What will be their level of investment? Do not round until your final answer, when you may round to two decimal places.Assume that a firm has the following data for the year ended 12/31/2019: Sales: $300 Depreciation expense: $20 Interest expense: $40 Tax expense: $40 Net worth: $150 In addition, the company's net worth in 2018 was $150. Assume that in 2020, sales, cost of goods sold, and S, G, & A expenses remain the same, depreciation expense increases, interest expense increases, and tax expense decreases. Which of the following statements is true? 1. Gross margin will decrease. II. Operating margin will decrease. III. Net income will increase. IV. Return on beginning equity will increase. I only I and II only I, II and III only I, II, III, and IV
- Task 2 a) Calculate the market price in equilibrium for an investment that in the period before had a dividend of SEK 10 with an expected growth rate of 3% per period indefinitely. The share has a risk-adjusted discount rate of 7%.Which of the following illustrates a capital gain? An investor earns a 20 return from a savings deposit An investor earns a 20 resturn from abond held until maturity An investor purchase a stock for 30 and then later sell it for 25 an investor purchases a stock for 25 and then later sells it for 30Matollows and 250 shillings in the following year. After that, dividends are expected to grow at constant 5% per year. If the required rate of return is 10%, what price should investors pay for such shares today? 4. Suppose a firm is considering a project that would require an initial cash outlay of 15 million shillings and expected to generate shs 4.5 million each year for the next 4 years. The firm assumes that the prices and costs increases at the same rate and that the required rate of return expressed in nominal terms is 14%. The firm also practices a policy whereby cash flows are stated at the prices of period zero. The inflation rate is expected to be 5%. (a)Outline two ways in which the effects that inflation has on the acceptability of investment projects could be considered. (b)Using the NPV technique, is the project worth taking? What have you learned from your analysis as far as treating inflation in investment analysis is concerned? 30/2021 4:39:41 PM Page 1 of 2