Exercise 4 (Basic Net Present Value Analysis) On January 2, Pebbles Cruz paid P18,000 for 900 ordinary shares of Rainbow Company. Ms. Cruz received an P0.80 per share dividend on the shares at the end of each year for four years. At the end of four years, she sold the share for P22,500. Ms. Cruz has a goal of earning a minimum return of 12% on all of her investments. Required: (Ignore income taxes.) Did Ms. Cruz earn a 12% return on the share? Use the net present value method and the general format. Round all computations to the nearest whole peso.

Exercise 4 (Basic Net Present Value Analysis) On January 2, Pebbles Cruz paid P18,000 for 900 ordinary shares of Rainbow Company. Ms. Cruz received an P0.80 per share dividend on the shares at the end of each year for four years. At the end of four years, she sold the share for P22,500. Ms. Cruz has a goal of earning a minimum return of 12% on all of her investments. Required: (Ignore income taxes.) Did Ms. Cruz earn a 12% return on the share? Use the net present value method and the general format. Round all computations to the nearest whole peso.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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