Given the following cash flow Year 0 Years 1-2 Years 3-10 Years 11-15 -$8,000 -$3,000/year $6,500...
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Given the following cash flow Year 0 Years 1-2 Years 3-10 Years 11-15 -$8,000 -$3,000/year $6,500 in year 3 and increases annually by 8%thereafter -$12,000/year Examine if it is using a discount rate of 10%, compute the following items: a) (4 pts) Present worth b) (4 pts) Future worth c) (4pts) Equivalent annual worth d) (8 pts) Internal rate of return (show all if there are multiple) e) (4 pts) Modified internal rate of return at a 8% borrowing and 12% reinvestment rate f) (8 pts) RIC at a 10% reinvestment rate g) (4 pts) Payback period (non-discounted) h) (4 pts) Payback period (discounted at discount rate) Given the following cash flow Year 0 Years 1-2 Years 3-10 Years 11-15 -$8,000 -$3,000/year $6,500 in year 3 and increases annually by 8%thereafter -$12,000/year Examine if it is using a discount rate of 10%, compute the following items: a) (4 pts) Present worth b) (4 pts) Future worth c) (4pts) Equivalent annual worth d) (8 pts) Internal rate of return (show all if there are multiple) e) (4 pts) Modified internal rate of return at a 8% borrowing and 12% reinvestment rate f) (8 pts) RIC at a 10% reinvestment rate g) (4 pts) Payback period (non-discounted) h) (4 pts) Payback period (discounted at discount rate)
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Answer rating: 100% (QA)
SOLUTION a Present worth The present worth of the cash flows is the amount of money that would be required today to generate the same amount of cash in the future taking into account the time value of ... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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