Feedback — Assignment 3
Thank you. Your submission for this quiz was received.
You submitted this Assignment on Sun 7 Jul 2013 10:22 AM PDT (UTC -0700). You got a score of 90.00 out of 100.00.
Please read all questions and instructions carefully. Note that you only need to enter answers in terms of numbers and without any symbols (including $, %, commas, etc.). Enter all dollars without decimals and all interest rates in percentage with up to two decimals. Read the syllabus for examples.The points for each question are listed in parentheses at the start of the question, and the total points for the entire assignment adds up to 100.
(5 points) Sachin has asked his flat mate Jason for a $500 loan to cover a portion of his rent and utility costs. Sachin proposes repaying the loan with $300 from each of his next two financial aid disbursements, the first 4 months from now and the second 12 months from now. Jason's alternative is to earn 5% annually in his money market account. Assume there is no risk of default, and that compounding is monthly. What is the NPV of the loan? (Enter just the number without the $ sign or a comma; round off decimals.) You entered: 80
Your Answer 80 Total
Score 5.00 5.00 / 5.00
Explanation Correct. You know compounding and figuring out NPV.
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Quiz Feedback | Introduction to Finance
Question Explanation This is a simple NPV problem, where the loan is positive NPV only because Sachin cannot borrow at market rates,
(5 points) Juanita has an opportunity to invest in her friend's clothing store. The initial investment is $10,000 and her expected cashflows are as follows: Year 1: $300 Year 2: $500 Year 3: $1200 Year 4: $2000 Year 5: $2000 Year 6: $5000 Year 7: $5000 What is Juanita's IRR on this investment?(No more than two decimals in the percentage