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Author Question: The required rate of return for an asset is equal to the risk-free rate plus a risk premium. ... (Read 59 times)

nelaaney

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on: Jul 11, 2018
The required rate of return for an asset is equal to the risk-free rate plus a risk premium.
 
  Indicate whether the statement is true or false

Question 2

You are about to purchase a new car from a dealer who has a new and unusual payment plan. You have the choice to pay 28,000 cash today or 31,000 in four years.
 
  If you have the opportunity to borrow the cash price value of the car at a rate of 2.5 and repay the loan in a lump sum in 4 years, which option should you take and why?
  A) Pay the 31,000 in the future because it it always better to delay payment for new assets.
  B) Pay the 31,000 in the future because the PV is less than 28,000 today.
  C) Pay the 28,000 cash today even if you need to borrow the money because the FV of the repayment in 4 years is only 30,906.76.
  D) Pay the 28,000 cash today because you pay a full 3,000 less than if you wait and pay the other option as presented.
Foundations of Finance ¦ Keown, Petty, Martin ¦ 9th Edition
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onowka

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Reply #1 on: Jul 11, 2018
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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nelaaney

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Reply 2 on: Jul 11, 2018
YES! Correct, THANKS for helping me on my review

xiaomengxian

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Reply 3 on: Yesterday
Wow, this really help

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