Which assertion is true? Person Amount invested Time that funds are invested Ann
ID: 2813827 • Letter: W
Question
Which assertion is true?
Person
Amount invested
Time that funds are invested
Annual return on investment
Olga
16,294 dollars
In 3 year(s) from today
11.1 percent
Jabari
29,784 dollars
In 6 year(s) from today
5.96 percent
Eli
33,268 dollars
In 9 year(s) from today
7.97 percent
Jabari will have more money in 12 years than Olga will have in 12 years and Eli will have more money in 12 years than Olga will have in 12 years
Olga will have more money in 12 years than Jabari will have in 12 years and Olga will have more money in 12 years than Eli will have in 12 years
Jabari will have more money in 12 years than Olga will have in 12 years and Olga will have more money in 12 years than Eli will have in 12 years
Olga will have more money in 12 years than Jabari will have in 12 years and Eli will have more money in 12 years than Olga will have in 12 years
2. What is X if X equals the value of investment A plus the value of investment B? Investment A is expected to pay 16,200 dollars in 5 year(s) from today and has an expected return of 11 percent per year. Investment B is expected to pay 19,500 dollars in 8 year(s) from today and has an expected return of 17.01 percent per year.
3.
Blue Eagle Media just bought supplies from Yellow Sand Banking. Blue Eagle Media has been offered the 3 possible payment options described in the table. If the discount rate is 15.25 percent, which of the assertions is true?
Option
Terms of payment (amount and timing)
from Blue Eagle Media to Yellow Sand Banking
A
22,493 dollars in 1 year(s)
B
52,927 dollars in 7 years
C
70,347 dollars in 9 years
Blue Eagle Media should prefer option B more than option A, and Blue Eagle Media should prefer option C more than option A
Blue Eagle Media should prefer option B more than option A, and Blue Eagle Media should prefer option A more than option C
Blue Eagle Media should prefer option A more than option B, and Blue Eagle Media should prefer option C more than option A
Blue Eagle Media should prefer option A more than option B, and Blue Eagle Media should prefer option A more than option C
4.
Orange Valley Recycling just bought supplies from Red Royal Consulting. Orange Valley Recycling has been offered the 3 possible payment options described in the table. If the discount rate is 13.98 percent, which of the assertions is true?
Option
Terms of payment (amount and timing)
from Orange Valley Recycling to Red Royal Consulting
A
16,468 dollars in 3 year(s)
B
27,614 dollars in 7 years
C
46,682 dollars in 11 years
Red Royal Consulting should prefer option A more than option B, and Red Royal Consulting should prefer option C more than option A
Red Royal Consulting should prefer option B more than option A, and Red Royal Consulting should prefer option A more than option C
Red Royal Consulting should prefer option B more than option A, and Red Royal Consulting should prefer option C more than option A
Red Royal Consulting should prefer option A more than option B, and Red Royal Consulting should prefer option A more than option C
5.Sasha owns two investments, A and B, that have a combined total value of 55,100 dollars. Investment A is expected to pay 24,300 dollars in 5 year(s) from today and has an expected return of 12.01 percent per year. Investment B is expected to pay X in 4 years from today and has an expected return of 17.58 percent per year. What is X, the cash flow expected from investment B in 4 years from today?
6.
Fairfax Paint is planning to sell its McLean, Springfield, and Falls Church stores in T years from today. The firm expects to sell its McLean store for a cash flow of H dollars, its Springfield store for a cash flow of H dollars, and its Falls Church store for a cash flow of M dollars. The cost of capital for the Falls Church store is Q percent, the cost of capital for the Springfield store is W percent, the cost of capital for the McLean store is Q percent, H > M > 0, Q > W > 0; and T > 0. The cash flows from the sales are the only cash flows associated with the various stores. Based on the information in the preceding paragraph, which one of the following assertions is true?
Two of the three stores have equal value and those two stores are more valuable than the third store or all three stores have the same value
The McLean store is the most valuable of the 3 stores
None of the other assertions is true
The Falls Church store is the most valuable of the 3 stores
The Springfield store is the most valuable of the 3 stores
Person
Amount invested
Time that funds are invested
Annual return on investment
Olga
16,294 dollars
In 3 year(s) from today
11.1 percent
Jabari
29,784 dollars
In 6 year(s) from today
5.96 percent
Eli
33,268 dollars
In 9 year(s) from today
7.97 percent
Explanation / Answer
Question:
Here we will calculate the future value of each investment
FV = PV*(1+r)^n where PV is the present value, r is the interest rate and n is the number of years of investment
Olga: Since investement is 3 years from today: n = 12-3 =9 The future value is calculated as FV = 16,294*(1+0.111)^9 =42,019.83
Jabari: Since investement is 6 years from today: n = 12-6 =6 The future value is calculated as FV = 29,784*(1+0.0596)^6 = 42,153.60
Eli: Since investement is 9 years from today: n = 12-9 =3 The future value is calculated as FV = 33,268*(1+0.0797)^3 = 41,873.19
So Jabari has the highest followed by Olga followed by Eli.
So the correct answer option is: Jabari will have more money in 12 years than Olga will have in 12 years and Olga will have more money in 12 years than Eli will have in 12 years (Option C)
Note: We have answered one Multiple choice question. Please post each question seperately for experts to answer
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.