Rate of return on investment from this restaurant business

Assignment Help Financial Management
Reference no: EM131020301

Suppose that you invest $50,000 in a restaurant business. One year later, you sell half of this business to a partner for $100,000. Then a year later, the business is in the red, and you pay $40,000 to close the business. What is the rate of return on your investment from this restaurant business?

Reference no: EM131020301

Questions Cloud

What is the firms net float : On an average day, a company writes checks totaling $1,500. These checks take 7 days to clear. The company receives checks totaling $1,800. These checks take 4 days to clear. The cost of debt is 9%. What is the firm's net float? A. $-3,300 B. $-300 C..
Immediate receipt of principal plus premium produces : A bond with a put option: (1) Is attractive because the immediate receipt of principal plus premium produces a high return. (2) Is more likely to be puttable when the yields to maturity are higher than coupon rates. (3)Will usually have a higher yiel..
Concerned about bank cash and net float : A financial manager should be concerned about bank cash and net float, which is the sum of: A. collection and book cash. B. collection float and disbursement float. C. disbursement float and book cash. D. disbursement float and bank credit. E. None o..
The expected return for the account : In 4 years from today, Steph plans to invest 7,800 dollars in an account that is expected to earn 3.95 percent per year. She also expects to make an investment of X in the same account in 3 year(s) from today. What is X if Steph expects to have 27,60..
Rate of return on investment from this restaurant business : Suppose that you invest $50,000 in a restaurant business. One year later, you sell half of this business to a partner for $100,000. Then a year later, the business is in the red, and you pay $40,000 to close the business. What is the rate of return o..
How much money will dru have in his account : In 2 years from today, Dru plans to invest 6,700 dollars in an account that is expected to earn 13.81 percent per year. In 1 year(s), Dru plans to invest 7,600 dollars in the same account. In 9 years from today, how much money will Dru have in his ac..
Sensible cash management policy : A sensible cash management policy would be to: A. have enough cash on hand to meet ordinary course of business and some excess cash to invest in marketable securities as a precautionary measure. B. have nearly enough cash on hand to meet ordinary cou..
Investor with a two-year investment horizon : Suppose that an investor with a two-year investment horizon is considering purchasing a seven-year 9% coupon bond selling at par. The investor expects that he can reinvest the coupon payments at an annual interest rate of 10% and that at the end of t..
The difference between bank cash and book cash : The difference between bank cash and book cash is called: A. float. B. disbursement float. C. net float. D. collection float. E. None of these.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the value of the lump sum payment

You have just won the lottery and have the option of receiving $1,000,000 payments at the beginning of each year for the next 20 years or a lump sum payment today. If the interest rate is 5%, what is the value of the lump sum payment?

  Investment be worth in either instrument

The bid quote on a corporate bond is $212; the ask is $215. You expect this bond to return its promised 15% per annum for sure. In contrast, T-bonds offer only 6% per annum but have no spread. If you have to liquidate your position in 1 month, what w..

  What is the firms weighted average cost of capital

Barton Industries expects that its target capital structure for raising funds in the future for its capital budget will consist of 40% debt, 5% preferred stock, and 55% common equity. Note that the firm's marginal tax rate is 40%. What is the firm's ..

  Classify the critical points as relative maxima

Classify the critical points as relative maxima, relative minima, or horizontal points of inflection,

  Expected interest rate-what is the yield

The real risk-free rate is 3.35%. Inflation is expected to be 2.85% this year, 3.75% next year, and then 3.05% thereafter. The maturity risk premium is estimated to be 0.05(t - 1)%, where t = number of years to maturity. What is the yield on a 7-year..

  Why is marketing so vital to a new business

Why is marketing so vital to a new business? What challenges do new businesses have when it comes to marketing that established businesses do not? How would you recommend overcoming those challenges?

  Consider period binomial model

Consider a 1-period binomial model with R=1.02, S0=100, u=1/d=1.05. Compute the value of a European call option on the stock with strike K=102. The stock does not pay dividends. Please submit your answer rounded to two decimal places.

  Determine the increase in white oaks annual pretax earnings

Assuming that these additional funds can be invested in marketable securities that yield 7 percent per year, determine the increase in White Oak's annual (pretax) earnings.

  Average dollar of sales brings

Assume that opening up the Souvenir Shop costs Road Atlanta $800, that the average dollar of sales brings in 55 cents of margin, and that only 25% of spectators buy anything. If a spectator does buy something, let’s guess that he or she will spend ar..

  Contribute an equal amount on a yearly basis

Suppose you will need $50,000 in 4 years to start up a new business you have planned. With a 5% real interest rate, how much do you have to invest now in order to achieve this goal? but assume you can contribute an equal amount on a yearly basis. How..

  Refinancing the outstanding mortgage balance at lower rate

Consider a 15-year, $155,000 mortgage with a rate of .0595 percent. Eight years into the mortgage, rates have fallen to 5 percent. What would be the monthly saving to a homeowner from refinancing the outstanding mortgage balance at the lower rate for..

  Calculate cost of equity using dividend growth model method

Laverne Industries stock has a beta of 1.42. The company just paid a dividend of $.92, and the dividends are expected to grow at 5.2 percent. The expected return of the market is 11.7 percent, and Treasury bills are yielding 5.2 percent. Calculate th..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd