Which investment opportunity should sam opt for

Assignment Help Business Economics
Reference no: EM131094577

Sam has three investment opportunities. The first one will require an initial cost of $100,000 and will return $150,000 one year from now. The second investment requires an outlay of $200,000 and will return $300,000 after one year. The third one requires an upfront cost $250,000 and will return $355,000 one year from now. The problem is that only one investment opportunity can be availed. Alternatively Sam can put his money into a savings bond that pays 20%. Which investment opportunity should Sam opt for? 

Reference no: EM131094577

Questions Cloud

Competitive firm uses capital and labor to produce output : A perfectly competitive firm uses capital and labor to produce output, in the short run, according to the following production function: Q=K1/2L1/2 1. Find the amount of capital and labor that will maximize profits 2.Show second order conditions for ..
Calculate the total cost of pollution abatement for industry : Suppose there are 13 firms in an industry; in the absence of regulation, each of them emits 4 tons of pollution (so aggregate industry emissions are 52 tons). What would be the equilibrium price of a permit? Calculate the total cost of pollution abat..
Consider the basic rothschild-stiglitz model : Consider the basic Rothschild-Stiglitz model with asymmetric information and two types on consumers. A policymaker who has taken this class suggests that is might be beneficial to impose a flat tax on healthy people and distribute the tax revenue to ..
Decided to open an online store : Andrew has decided to open an online store that sells home and garden products. After searching around, he chooses the software company Snitch to provide the software for his website since their product required the least amount of specialized invest..
Which investment opportunity should sam opt for : Sam has three investment opportunities. The first one will require an initial cost of $100,000 and will return $150,000 one year from now. The second investment requires an outlay of $200,000 and will return $300,000 after one year. Which investment ..
Opportunity cost of producing a bottle of wine : Terms of trade Suppose that France and Germany both produce oil and wine. France's opportunity cost of producing a bottle of wine is 5 barrels of oil while Germany's opportunity cost of producing a bottle of wine is 10 barrels of oil.
Expected inflation rate are unchanged : Suppose the real interest rate is 4% and the expected inflation rate is 3%. If the money supply increases by 10% and output, the real interest rate, and the expected inflation rate are unchanged, then the price level increases by
What are heuristics : What are heuristics? How do they help the brain function? List and describe three common heuristics and how they work. Explain your answers.
Calculate the equilibrium level of income : Assume consumption is represented by the following: C = 400 + .5Y. Also assume that planned investment (I) equals 100. Given the information, calculate the equilibrium level of income. Given the information, calculate the level of consumption and sav..

Reviews

Write a Review

Business Economics Questions & Answers

  Q1 what is meant by average propensity to consume suppose

q1. what is meant by average propensity to consume? suppose that 1000 out of 10000 disposable income is saved. what is

  Higher level of output per worker in the steady state

Suppose that two countries are exactly alike in every respect except that population grows at a faster rate in country A than in country B. Which country will have the higher level of output per worker in the steady state? Illustrate graphically. Whi..

  What determines what role a state might play

What are the four roles that states can play in negotiated global environmental regimes? What determines what role a state might play? Why do states sometimes shift roles?

  What is consumer surplus

What is consumer surplus?

  What might cause prices to change in the marketplace

Have you ever noticed that prices changes from time to time for seemingly no reason? Well, believe it or not, there is most definitely a reason. Businesses try to extract as much money as possible from consumers for their products. What are some of t..

  unemployment rate affect your chances of finding a job

Explain how does a rise in the unemployment rate affect your chances of finding a job which would match your qualifications as a college graduate.

  What is the uniform annual equivalent value of labor cost

An electronic device is available that will reduce this year's labor cost by $10,000. The equipment is expected to last for 8 years. If labor costs increase at an average rate of 7% per year and the interest rate is 12% per year: What is the maximum ..

  Evaluate the role of different entry strategies

Analyse and evaluate the role of different entry strategies when operating in culturally distant markets. Make reference to factors external and internal affecting the choice of foreign market entry modes.

  Considerably less than one quality adjusted life

One year of life is then worth a little less than $67,000. Actually, if you are talking of Quality adjusted life year, your last calendar year might be worth considerably less than one quality adjusted life year ignoring that. They can’t spend more t..

  Qa social scientist claims that the average adult watches

q.a social scientist claims that the average adult watches less than 26 hours of television per week. he collects data

  Illustrate what is the graph among utility and income

Illustrate what is the graph among utility and income,when marginal utility of income increases or deminishes.

  Efficient as the private sector in delivering services

Is the government as efficient as the private sector in delivering services? Why? Why not? The new health program (Obamacare) has a number of problems. Will the new health care program be affected adversely?

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