Putting the money into a short-term investment account

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Reference no: EM131321432

1. Donna plans to save for a vacation to Costa Rica in 18 months. She will be putting the money into a short-term investment account earning 4% annually. How much will Donna have to put away at the beginning of each month if the total package cost for the trip is $3,500?

a. $170.34.

b. $188.37.

c. $212.69.

d. $246.73.

2. Liam bought a piece of equipment for $10,000. He paid $3,000 for upgrades during year 1 and the equipment generates $2,000 in cash flow for year 1. In year 2 the equipment generated $3,000 and in year 3 it generated $4,000, but Liam sells it for $6,000 and pays a $500 commission. What is his IRR?

a. 3.4%.

b. 3.9%.

c. 4.4%.

d. 4.9%

Reference no: EM131321432

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