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If you require a 9 percent return on your investments which would you prefer a 5000 today b 15000 five years from today or c 1000 per year for 15 yrs?
Foula09
B. (x
Wiki User
∙ 14y ago
Assuming all options are equally risky, you would prefer option b, which is receiving $15,000 five years from today. This is because the present value of $15,000 in five years, discounted at a 9 percent rate of return, is greater than the present value of receiving $5,000 today or receiving $1,000 per year for 15 years.
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The accounting rate of return on stockholders investments is measured by?
The accounting rate of return stockholders investments is measured by?
How is the potential rate of return on investments related to the level of risk?
Higher risk investments have a higher potential return.
How do risky investments influence businesses?
Risky investments make the company more vulnerable towards the market frictions. If the company is making risky investments - shareholders and debt-holders might require higher rate of return on their capital. Basically, the riskier the investment the more costly it is for the business.
How is the accounting rate of return on stockholders investments measured?
return on equity
How is an absolute return involved with investments?
An absolute return is involved with investments by the measure of gain or loss that is expressed as a percentage in the invest of a business capitals.
Calculating Return on Your Investments?
Calculating return on your investments is a fundamental part of the investing process. Fortunately, calculating the rate is as easy as it is essential. In many investments, the rate of return is stated as the interest rate that is paid to you, rendering a calculation unnecessary. For example, if you place your money in a certificate of deposit or a bond with a 3% yield, then your return is 3%. For investments like stock, it takes a little more effort. Subtract the money you have now with the money you started with. Divide that figure by the amount you started with and that's your rate! Example: Start: $100,000 End: $110,000 110,000 - 100,000 = 10,000. 10,000/100,000 = .10 So your rate would be ten percent!
What will happen if the return on investments decreases?
If the return on investments decreases, shareholders and investors will eventually sell their shares as their investment is not utilized efficiently and it will affect the company's over all value.
An ordinary share has a current price of 82.50 and is expected to grow at a constant rate of 10 percent If you require a 14 percent rate of return what is the current dividend on this share?
4%
What were the standard IRA rates in 2010?
in 2010 the standard rate of return on an IRA was eight percent. IRA's are extremely profitable if you leave them in long enough and are tax deferred investments.
How much would you be willing to pay for a 10-year ordinary annuity if the payments are 500 per year and the rate of return is 6.25 percent annually?
I wouldn't. I make better investments than that.
What is the current dividend on this stock on share of Commons stock has a current price of 82.50 and is expected to grow at a constant rate of 10 percent If you require a 14 percent rate of return?
$3.00
What is one of the risks of being a stockholder?
Stockolders are not guaranteed a return on their investments.
