Determine whether or not investment earned


Problem:

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.

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Finance Basics: Determine whether or not investment earned
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