Ask Experts Questions for FREE Help !
Ask
    YvonneOzanne's Avatar
    YvonneOzanne Posts: 11, Reputation: 1
    New Member
     
    #1

    Jan 31, 2013, 02:06 PM
    Please claify this, I do NOT want the answer to the problem.
    Here is the information:

    On January 2, 19X1, Bruce Greene invested $10,000 in the stock market and purchased 500 shares of Heartland Development, Inc. Heartland paid cash dividends of $2.60 per share in 19X1 and 19X2; the dividend was raised to $3.10 per share in 19X3. On December 31, 19X3, Greene sold his holdings and generated proceeds of $13,000. Greene uses the net-present- value method and desires a 16% return on investments.
    a. Prepare a chronological list of the investment's cash flows. Note: Greene is entitled to the 19X3 dividend.
    b. Compute the investment's net present value, rounding calculations to the nearest dollar.
    c. Given the results of part (b), should Greene have acquired the Heartland stock? Briefly explain

    At first I thought there were two separate problems: the 10,000 as a stand alone investment, but after reading it over and over, I have concluded that the $10,000 was used to purchase the 500 shares.
    My question is: Am I correct in assuming that the $10,000 was indeed used to purchase the 500 shares, or do I need to find the amount used to purchase the shares by using the 16% return or the $13,000 proceeds?
    Any help in understanding this problem would be great. I know the math, but am TERRIBLE at word problems!
    nrjoyner's Avatar
    nrjoyner Posts: 5, Reputation: 3
    New Member
     
    #2

    Jan 31, 2013, 04:42 PM
    Your second assumption is correct. Greene used $10,000 to purchase 500 shares.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

How to get an answer for an accounting problem [ 2 Answers ]

will a cost that says per unit or activity will it always be a variable cost

Answer my word problem [ 1 Answers ]

you invested $14,400 and started a business selling vases. Supplies cost $16 per vase and you are selling each vase for $34. Determine the number of vases, x, that must be produced and sold to break even.

Answer accounting problem [ 2 Answers ]

Purchased photo equipment at a cost of 105000 from camera works .she paid 1/3 and promised to pay the balance at the end of the month, How much is the balance?

I need the answer to this math problem. [ 5 Answers ]

Laura is in charge of lighting the Rock Palace for an upcoming concert. Each light fixture supplies exactly 1,000 watts of power to light the bulbs in the fixture. Laura can use any combination of 150-watt, 100-watt, 75-watt, or 60-watt bulbs, but the total number of watts must be 1,000. How many...

Can you help answer how this problem is solved? [ 1 Answers ]

Can you help answer how this problem is solved?Express in a + bi form... (2 - 2i) ^5 ? The answer is -128 + 128i... but how?


View more questions Search