Suppose you are offered 5,000 today but must make the following payments Year Cash flow () 0

Question:

Suppose you are offered £5,000 today but must make the following payments Year Cash flow (£)

0 5,000 1 2,500 2 2,000 3 1,000 4 1,000

(a) What is the IRR of this offer?

(b) f the appropriate discount rate is 10 per cent, should you accept this offer?

(c) f the appropriate discount rate is 20 per cent, should you accept this offer?

(d) What is the NPV of the offer if the appropriate discount rate is 10 per cent?

(e) What is the NPV of the offer if the appropriate discount rate is 20 per cent?

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Fundamentals Of Corporate Finance

ISBN: 9780077178239

3rd Edition

Authors: David Hillier, Iain Clacher, Stephen A. Ross

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Question Posted: Jul 09, 2024 09:00 AM

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Suppose you are offered 5,000 today but must make the following payments Year Cash flow () 0

Question:

Step by Step Answer:

Fundamentals Of Corporate Finance

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