Question

Fifteen years ago, Asher bought four different stocks at their lowest price of the day. He purchased 57 shares of McDoe’s at $78 per share; 78 shares of Younger, Inc. cost him $23 per share; 90 shares of Alfa Goods went for $86 per share; and 64 shares of Hooper, Rex, and Co. had a price of $69 per share. Today, he sold all of his shares in each company. He received $5,313 for McDoe’s, with annual dividends of $12 per year, $2,776 for Younger, Inc, $9,657 for Alfa Goods, and $6,701 for Hooper, Rex, and Co. On which investment did Asher receive the greatest rate of return?

A. McDoe's
B. Younger, Inc
C. Alfa Goods
D. Hooper, Rex, and Co.

I just need help figuring out how to do this problem.

Answer 1

To calculate the rate of return for each investment, find the profit by subtracting the initial investment from the selling price, and then divide the profit by the initial investment. Based on the calculations, Asher received the greatest rate of return from Younger, Inc.

Step-by-step explanation:

To find the rate of return for each investment, we need to calculate the profit and then divide it by the initial investment.

McDoe's:

Profit = Selling Price - Initial Investment
= $5,313 - (57 x $78)
= $5,313 - $4,446
= $867

Rate of Return = Profit / Initial Investment
= $867 / (57 x $78)
= $867 / $4,446
≈ 0.195 or 19.5%

Younger, Inc:

Profit = Selling Price - Initial Investment
= $2,776 - (78 x $23)
= $2,776 - $1,794
= $982

Rate of Return = Profit / Initial Investment
= $982 / (78 x $23)
= $982 / $1,794
≈ 0.546 or 54.6%

Alfa Goods:

Profit = Selling Price - Initial Investment
= $9,657 - (90 x $86)
= $9,657 - $7,740
= $1,917

Rate of Return = Profit / Initial Investment
= $1,917 / (90 x $86)
= $1,917 / $7,740
≈ 0.247 or 24.7%

Hooper, Rex, and Co:

Profit = Selling Price - Initial Investment
= $6,701 - (64 x $69)
= $6,701 - $4,416
= $2,285

Rate of Return = Profit / Initial Investment
= $2,285 / (64 x $69)
= $2,285 / $4,416
≈ 0.518 or 51.8%

Based on the calculations, Asher received the greatest rate of return from Younger, Inc.

Answer 2

Lemme look at it quick