Boomerang Bungee Corp Year
A)$5,527

question 11

Multiple Choice

Boomerang Bungee Corp.is considering the following project.Determine the equal annual annuity for the project if the cost of capital is 14%.
Initial Investment: $75,000
$$\begin{array} { | c | c | } \hline \text { Year } & \text { Cash Inflows } \\\hline 1 & \$ 30,000 \\\hline 2 & \$ 35,000 \\\hline 3 & \$ 40,000 \\\hline\end{array}$$
Year

• A)$5,527.89
• B)$4,355.25
• C)$7,768.67
• D)$2,259.62

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Definitions:

Excess Return

The return achieved by an asset that exceeds the risk-free rate of return.

Excess Returns

Excess returns refer to the returns achieved above a benchmark or a risk-free rate of return.

Market Index

A statistical measure that reflects the overall movement of the market or a specific sector of the market.

Global Minimum Variance Portfolio

An investment portfolio that aims to achieve the lowest possible level of risk (variance) for a given rate of expected return, comprising assets from around the world.