Author Question: You have the opportunity to buy a perpetuity which pays 1,000 annually. Your required rate of return ... (Read 83 times)

appyboo

  • Hero Member
  • *****
  • Posts: 527
You have the opportunity to buy a perpetuity which pays 1,000 annually. Your required rate of return on this investment is 15 percent. You should be essentially indifferent to buying or not buying the investment if it were offered at a price of:
 
  A) 5,000.00
  B) 6,000.00
  C) 6,666.67
  D) 7,500.00
  E) 8,728.50

Question 2

The financial manager selecting one of two projects of differing risk should
 
  A) choose the project with less risk even though that project has less return.
  B) select the project with the larger risk-adjusted net present value.
  C) choose the project with greater return even if that project has greater risk.
  D) choose the project with the least relative risk.


Kimmy

  • Sr. Member
  • ****
  • Posts: 342
Answer to Question 1

C

Answer to Question 2

B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Did you know?

The first oral chemotherapy drug for colon cancer was approved by FDA in 2001.

Did you know?

The cure for trichomoniasis is easy as long as the patient does not drink alcoholic beverages for 24 hours. Just a single dose of medication is needed to rid the body of the disease. However, without proper precautions, an individual may contract the disease repeatedly. In fact, most people develop trichomoniasis again within three months of their last treatment.

Did you know?

Eating carrots will improve your eyesight. Carrots are high in vitamin A (retinol), which is essential for good vision. It can also be found in milk, cheese, egg yolks, and liver.

Did you know?

The average adult has about 21 square feet of skin.

For a complete list of videos, visit our video library