To determine the net asset value (NAV) at which Rochelle should sell her shares to achieve her desired profit of \[tex]$6,250, we can take the following steps:
1. Identify the initial NAV and the number of shares Rochelle has:
- The initial NAV (Net Asset Value) is \$[/tex]18.94.
- Rochelle has invested in 500 shares.
2. Calculate the total initial investment:
- The total initial investment = Initial NAV × Number of shares.
- Total initial investment = \[tex]$18.94 × 500 = \$[/tex]9,470.
3. Determine the desired sale value to achieve the targeted profit:
- Desired profit = \[tex]$6,250.
- Therefore, the total sale value should be the initial investment plus the desired profit.
- Total sale value = Initial investment + Desired profit.
- Total sale value = \$[/tex]9,470 + \[tex]$6,250 = \$[/tex]15,720.
4. Calculate the required NAV for Rochelle to reach the total sale value:
- Since Rochelle wants to sell all 500 shares, the required NAV can be found by dividing the total sale value by the number of shares.
- Required NAV = Total sale value / Number of shares.
- Required NAV = \[tex]$15,720 / 500 = \$[/tex]31.44.
Therefore, the net asset value must be \[tex]$31.44 in order for Rochelle to sell her shares and achieve her targeted profit of \$[/tex]6,250. The correct answer is:
b. \$31.44
