if you could show work please Rate of return Douglas Keel, a financial analyst f

Question

if you could show work please

Rate of return Douglas Keel, a financial analyst for Orange Industries, wishes to estimate the rate of return for two similar-risk investments, X and Y. Douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. a year earlier, investment X had a market value of $14, 000; investment Y had a market value of $42, 000. During the year, investment X generated cash flow of $050 and investment Y generated cash flow of $5, 021. The current market values of investments X and Y are $14, 527 and $42, 000, respectively. Calculate the expected rate of return on investments X and Y using the most recent year's data. assuming that the two investments are equally risky, which one should Douglas recommend? Why?

Explanation / Answer

Hi, If you like my answer rate me lifesaver first...that way only I can earn points. Thanks a) Expect return on X = (14527 - 14000 +1050)/14000 = 11.26% Expect return on Y = (42000 - 42000 +5021)/42000 = 11.95% b) Douglas should invest in Y since based on current data it has higher return

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.