Assume you have a total of $200,000 to invest in two corporate stocks identified as Z1 and Z2. The overall rate of return you require on the $200,000 is 26% per year. (a) If $40,000 is invested in Z2 with an estimated * 2Zi of 14% per year, what value must * 1Zi exceed to realize at least 26% per year? (b) If the best return expected from the Z1 stock is 27%, determine the threshold level of investment in Z2 to maintain an overall ROR of 26% per year. Solve by hand or using Goal Seek, as instructed.
What will be an ideal response?
(a) 40,000(0.14) + (200,000 – 40,000)(i* Z1 ) = 200,000(0.26)
i* Z1 = 0.29 (29% per year)
(b) Goal Seek results are shown. Thresehold investment in Z2 is $15,385. Any more than
$15,385, and the overall ROR falls below 26%.
You might also like to view...
What provides the main source of air to the furnace?
A) Damper B) Air register C) Furnace purge D) Stack
Which of the following statements is not a plausible and reasonable design constraint to impose when designing a new Rankine cycle heat engine?
A. The steam entering the turbine must have a quality of 0.95 or greater. B. The boiler should be 35 K cooler than the hot reservoir. C. The working fluid should be subcooled when it leaves the condenser. D. The condenser needs to be 25 K warmer than the cold reservoir. E. All of these are reasonable design constraints.
If a technician enters incorrect settings on the system installation or service screens
A) an incompetent technician error message will be sent to the factory B) the system will over-ride that incorrect entries C) the controller will be destroyed D) the system may not operate
What is the purpose of the venturi on a one-pipe venturi system?
A) The venturi separates air bubbles from the circulating water. B) The venturi creates a negative pressure at the main connection, drawing the necessary flow through the branch. C) The venturi mixes the supply and return water for more even temperatures. D) The venturi increases the pressure in the pipe to offset piping losses.