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Net Present Value for investment analyst's investment.

An Investment analyst wants to know if the investments during the past four years have earned at least a 12% return.
Four years ago she had the following investments

A) She purchased a small building for $50,000 and rented space in it.
She received rental income of $8,000 for each of the four years.
The building was sold this year for $55,000

B) She purchased a small refreshment stand near the city park for $25,000
Annual income from the stand was $5,000 for each of the four years
She sold the stand for $20,000 this year.

C) She purchased an antique car for $5,000 four years ago
She sold it this year to a collector for $7,000

REQUIRED
1) Using the net present value method, determine whether or not each investment earned at lest 12%
2) Did the investments as a whole earn as least 12% Explain

Solution Preview

Unifying Concepts: Net Present Value and Internal Rate of Return Methods
An Investment analyst wants to know if the investments during the past four years have earned at least a 12% return. Four years ago she had the following investments
a. She purchased a small building for $50,000 and rented space in it. She received rental income
of $8,000 for each of the four years and then sold the building this year for $55,000.

b. She purchased a small refreshment stand near the city park for $25,000. Annual income
from the stand was $5,000 for each of the four years. She sold the stand for $20,000 this
year.

c. She purchased an ...

Solution Summary

This solution is comprised of a detailed calculation to find the net present value of investment analyst's investment.

$2.19