Calculate the annualized rate of return on a 200-day commercial paper. This loan does not pay periodic interest; it is a discount security. The face value of the paper is $1 million and the current market value is $980,000.

Answer 1

Duncombe village golf course is considering the purchase of new equipment that will cost $1,200,000 if purchase today and will generate the following cash disbursements and receipts. should Duncombe pursue the investment if the cost of capital is 8 percent? Why? Please label your calculations. Thanks, Ann.